OPINIONS 

RENDERED  TO  THE 

ILLINOIS  MANUFACTURERS' 
ASSOCIATION 

FROM 

JANUARY  1,  1899,  TO  JANUARY  1,  1907 


BY 


L,EVY 

ITS  GENERAL  COUNSEL 


CHICAGO,  ILLINOIS 
1913 


PREFACE. 


This  book  is  published  exclusively  for  the  benefit  of  the  Illinois 
Manufacturers'  Association,  and  at  the  request  of  its  Board  of  Direc- 
tors, who  have  been  asked  by  many  of  its  members  to  have  the  contents 
preserved  in  permanent  form.  The  opinions  here  collected  were  ren- 
dered from  January  1,  1899,  to  January  1,  1907.  Each  opinion  is  based 
upon  a  statement  of  facts  which  was  first  submitted  by  or  for  a  mem- 
ber. I  have  deemed  it  desirable  and  useful  to  give  the  reasons  and  the 
authorities  upon  which  my  conclusions  rest.  The  formation  of  the 
opinions  required  much  time,  and  careful  consideration  and  investiga- 
tion of  the  law,  not  only  of  Illinois,  but  of  other  states  and  counties. 
The  method  pursued  enables  the  members  to  follow  the  reasoning  upon 
which  the  conclusions  rest,  and  also  furnishes  an  index  of  the  author- 
ities to  the  attorneys  who  may  be  concerned  with  the  particular  or 
similar  propositions.  The  range  of  subjects  covered  is  extensive,  and 
embraces  questions  which  arise  in  the  conduct  of  nearly  every  large 
mercantile  or  manufacturing  business. 

The  opinions  have  been  compiled  and  indexed  by  Francis  E. 
Matthews  and  Hal  C.  Bangs,  who  for  years  have  been  in  my  office. 
They  have  also,  in  other  matters  connected  with  the  work  in  hand,  ren- 
dered valuable  assistance,  and  I  take  this  occasion  to  express  my  ap- 
preciation of  their  faithful  and  efficient  aid. 

LEVY  MAYER. 

CHICAGO,  March  20,  1908. 


OPINIONS 

RENDERED    TO    THE 

ILLINOIS  MANUFACTURERS'  ASSOCIATION 

From  January   1,   1899,   to  January  1,   1907 


VALIDITY   OF   THE   ILLINOIS   FLAG  LAW. 

(Illinois    Manufacturers'    Association,    October    20 

1899.) 

Dear  Sir :— Replying  to  your  letter  of  September 
23rd,  requesting  an  opinion  on  the  validity  of  the  Illi- 
nois Flag  Law,  entitled  "An  Act  to  prohibit  the  use  of 
the  National  Flag  or  Emblem  for  any  commercial  pur- 
poses, or  as  an  advertising  medium,"  we  would  say 
that  such  Act  does  not  fall  within  the  usual  lines  of 
legislative  action. 

The  power  of  the  State  Legislature  to  enact  laws  is 
not  in  terms  limited  by  the  State  Constitution,  but  it 
does  not  follow  that  the  Legislature  can,  therefore,  ex- 
ercise absolutely  uncontrollable  authority  in  enacting 
laws  without  reference  to  reason,  and  the  pertinency 
to  the  public  welfare  of  its  enactments.  The  only  do- 
main of  legislation,  to  which  this  Act  can  be  referred, 
is  the  exercise  by  the  Legislature  of  what  is  known  as 
the  "Police  Power,"  but  we  are  unable  to  find  that 
the  Act  in  question  can  be  ascribed  to  any  one  of  the 
various  heads  under  which  the  "Police  Power"  may  fee 
exercised.  It  moreover  appears  to  have  no  reference 
to  the  public  welfare  or  convenience,  or  to  the  public 
safety,  or  to  in  any  manner  affect  the  general  welfare 
or  the  common  protection  of  the  people  in  their  rights, 
liberties  or  property.  It  appears  to  be  purely  senti- 
mental, and  to  be  wholly  without  the  purpose  "and  in- 
tent of  protecting  any  material  interest  whatever. 

The  Supreme  Court  of  this  State  has  said  in  T.,  W. 
&  W.  R.  Co.  v.  Jacksonville,  67  111.,  37 : 

"It  is  not  within  the  power  of  the  General  As- 
sembly, under  the  pretence  of  exercising  the  police 


power  of  the  State,  to  enact  laws  not  necessary  to 
the  preservation  of  the  health  and  safety  of  the 
community  that  will  be  oppressive  and  burden- 
some upon  the  citizens.    //  it  should  prohibit  that 
which  is  harmless  in  itself,  or  command  that  to  be 
done  which  does  not  tend  to  promote  the  health, 
safety  or  welfare  of  society,  it  would  be  an  unau- 
thorized exer,cise  of  power,  and  it  would  be  the 
duty  of  the  courts  to  declare  such  legislation  void." 
While  it  is  difficult  to  foresee  with  absolute  certainty 
what  position  the  final  courts  of  review  will  take  with 
reference  to  such  legislation,  we  are  strongly  of  the 
opinion  that  it  ought  not  to  be  sustained  when  brought 
to  the  test  of  judicial  reason.    We  are  advised  that  a 
test  case  is  now  on  the  way  to  the  Supreme  Court  of 
this  State. 

Where  persons  or  firms  had  in  use,  at  the  time  of  the 
passage  of  this  Act,  any  drawing,  printed  picture,  en- 
graving or  photograph  in  the  likeness  of  the  national 
flag  as  an  advertisement  or  upon  boxes  or  wrappings 
for  goods,  used  in  such  manner  that  the  drawing  or  pic- 
ture used  gave  a  distinctive  appearance  to  the  partic- 
ular goods,  so  as  to  be,  when  taken  alone  or  in  connec- 
tion with  other  symbols  or  emblems,  in  the  nature  of 
a  trade-mark  or  distinctive  mark  identifying  the  goods 
from  other  goods  of  the  same  general  character,  the 
law  cannot,  in  our  opinion,  operate  to  prevent  the  con- 
tinued use  of  such  drawing,  engraving  or  picture,  for  in 
that  respect,  if  the  law  were  to  so  operate,  it  would 
deprive  persons  of  valuable  property  interests  'ac- 
quired and  vested  before  there  was  any  attempted  inhi- 
bition of  the  use  of  the  flag  as  an  emblem  or  advertis- 
ing medium.  Private  property  cannot  be  divested  by 
an  Act  of  the  Legislature.  To  the  extent  that  the  law 
in  question  attempts  to  interfere  with  vested  rights, 
it  is,  in  our  opinion,  unconstitutional. 

NOTE: — The  law  in  question  was  declared  unconstitutional  in  Bull- 
strat  v.  People,  185  111.,  133.  The  same  conclusion  was  reached  in  Peo- 
ple v.  Kruse,  1  111.  C.  C.,  536.  The  United  States  Supreme  Court  in 
Halter  v.  State,  205  U.  S.,  34,  has  reached  a  contrary  decision  in  passing 
upon  a  similar  law  in  Nebraska.  A  new  flag  law  was  enacted  in  Illi- 
nois in  1907.  (Laws  of  111.  1907,  p.  351.)— Ed. 


VALADITY  OF  A  ST.  LOUIS  ORDINANCE  AUTHORIZING  THE  TAX 
COMMISSIONER  TO  COLLECT  A  LICENSE  FEE  OF  $50.00 
FROM  NON-RESIDENT  SALES-AGENTS. 

(Norton  Bros.,  Nov.  10, 1899.) 

You  request  our  opinion  as  to  whether  or  not  two 
agents  for  Norton  Bros,  (members  of  your  association) 
are  compelled  to  take  out  licenses  under  the  ordinances 
of  the  city  of  St.  Louis,  and  pay  a  fee  therefor  of  $50 
annually,  for  each  license. 

From  the  statement  of  facts  presented  in  Norton 
Bros.'  letter  to  you,  under  date  of  November  6,  1899, 
and  a  copy  of  which  letter  is  enclosed  in  your  letter  to 
us  of  November  7,  1899,  we  understand  that  Norton 
Bros,  do  not  keep  any  merchandise  in  the  City  of  St. 
Louis,  but  merely  maintain  a  room,  as  headquarters 
for  their  salesmen  who  travel  and  solicit  orders  in 
St.  Louis,  and  the  territory  adjoining  that  city,  and 
that  all  of  their  orders  are  filled  direct  from  Chicago. 
Upon  this  state  of  facts,  we  are  of  the  opinion  that 
neither  Norton  Bros,  nor  their  agents  can  be  com- 
pelled to  take  out  such  licenses  under  Sections  1453, 
1454  and  1455  of  the  ordinances  set  forth  in  the  letter 
of  Norton  Bros. 

Among  the  authorities  upon  which  we  base  this  opin- 
ion, are  the  following : 

In  re  Rozelle,  57  Fed.  Rep.,  155,  in  which  the  facts 
were  as  follows :  The  City  of  Little  Rock,  in  the  State 
of  Arkansas,  passed  the  following  ordinance: 

"Section  1.  That  it  shall  be  unlawful  for  any 
person  to  engage  in,  exercise  or  pursue  any  of  the 
following  vocations  or  business,  without  having 
first  obtained  a  license  therefor,  from  the  proper 
city  authorities,  the  amount  of  which  license  is 
hereby  fixed  as  follows,  to-wit:  (1)  Every  mer- 
chandise broker  who  maintains  a  storeroom  or 
warehouse  or  office  within  the  city  limits,  $50  per 
annum. ' ' 

J.  S'.  Rozelle  was  a  merchandise  broker,  who,  upon 
exhibition  of  samples,  solicited  and  obtained  orders 


for  goods  manufactured  outside  of  the  State  of  Ar- 
kansas, and  which  orders  were  filled  direct  from  the 
place  of  manufacture.  Having  been  arrested  for  fail- 
ure to  take  out  license  under  the  above  ordinance,  he 
petitioned  for  a  writ  of  habeas  corpus  and  was  dis- 
charged. Williams,  the  District  Judge,  before  whom 
the  case  was  heard,  concluded  his  opinion  with  the  fol- 
lowing language : 

' '  From  all  the  authorities  on  this  question,  I  am 
clearly  of  the  opinion  that  the  ordinance  in  ques- 
tion, so  far  as  the  same  refers  to  the  petitioner 
or  his  occupation,  is  unconstitutional,  and  is  in 
conflict  with  the  provisions  of  the  constitution  reg- 
ulating inter-state  commerce,  and  that,  therefore, 
the  petitioner  should  be  discharged. ' ' 
Bobbins  v.  Shelby  .Taxing  District,  120  U.  S.,  489, 
is  a  case  closely  in  point.    Robbins  was  engaged  in  so- 
liciting in  the  City  of  Memphis,  Tenn.,  the  sale  of 
goods  for  a  Cincinnati  firm,  exhibiting  samples  for 
the  purpose  of  effecting  such  sales,  his  employment  be- 
ing that  which  is  usually  denominated  that  of  a  drum- 
mer.   This  business  was  declared  by  a  statute  of  Ten- 
nessee to  be  a  privilege  for  which  a  license  tax  was  re- 
quired.   Bobbins  was  convicted  of  a  violation  of  that 
statute.    The  statute  made  no  discrimination  between 
those  who  represented  business  houses  out  of  the  state 
and  those  representing  like  houses  within  the  state. 
There  was,  therefore,  no  element  of  discrimination  in 
the  case,  but,  nevertheless,  the  conviction  was  set  aside 
by  the  court  on  the  ground  that  whatever  the  state 
might  see  fit  to  enact  with  reference  to  a  license  tax 
upon  those  who  acted  as  drummers  for  houses  within 
the  state,  it  could  not  impose  upon  those  who  acted  as 
drummers  for  business  houses  outside  of  the  state  (and 
who  were,  therefore,  engaged  in  interstate  commerce) 
any  burden  by  way  of  a  license  tax.    The  opinion  of 
Mr.  Justice  Bradley  is  elaborate  and  enters  fully  into 
the  discussion  of  the  question,  citing  many  authorities. 
It   affirms   in   the   strongest   language,   the   exclusive 
power  of  Congress  over  interstate  commerce ;  that  its 
failure  to  make  express  regulations,  indicates  its  will 


that  the  subject  shall  be  left  free  from  any  restrictions 
or  impositions,  and  that  whatever  may  be  the  extent  to 
which  the  police  power  of  the  state  can  go,  it  cannot  go 
so  far  as  to  uphold  any  regulations  directly  affecting 
interstate  commerce. 
To  the  same  effect  are: 

Brennan  v.  TitusvUle,  153  U.  S.,  289. 

Davis  &  Rankin  Bldg.  and  Mfg.  Co.  v.  Dix,  64 
Fed.  Eep.,  406. 

Brown  v.  Maryland,  12  Wheat.,  419. 

Asher  v.  Texas,  128  U.  S.,  129. 

Lynq  v.  Michigan,  135  U.  S.,  161. 

In  re  Schecter,  63  Fed.  Rep.,  695. 

State  of  Louisiana  et  al.  v.  La  Garde  et  al., 
60  Fed.  Eep.,  186. 

In  re  Mitchell  et  al.,  62  Fed.  Rep.,  576. 
Applying  the  decisions  above  cited,  and  upon  the 
consideration  of  many  others  to  the  same  effect,  we  ad- 
vise that  none  of  the  provisions  of  the  ordinance  sub- 
mitted to  us  can  be  enforced  against  Norton  Bros,  or 
their  agents. 

THE  PAYMENT  OF  TAXES  ON  PERSONAL  PROPERTY. 

(Illinois    Manufacturers'    Association,    February    1, 

1900.) 

You  have  stated  that  many  members  of  the  associa- 
tion have  asked  what  course  they  should  pursue  with 
reference  to  the  payment  of  taxes  on  their  personal 
property  now  being  demanded  of  them  by  the  different 
town  collectors.  This  reply  has  reference  to  personal 
property  only.  As  to  the  real  estate,  other  questions  of 
law  apply,  and  there  is  no  necessity  for  action  with  ref- 
erence to  real  estate  at  the  present  time,  because  taxes 
on  real  estate  need  not  be  paid  until  the  first  of  May, 
after  which  date  the  penalty  of  one  per  cent  a  month 
accrues. 

1.  It  is  impossible  in  a  general  opinion  to  furnish 
advice  which  will  apply  to  each  individual  case.  The 
circumstances  in  each  case  are  probably  as  different 


6 

as  you  have  members  in  your  association;  therefore, 
each  case  must  be  determined  with  reference  to  the  par- 
ticular facts  in  that  case. 

2.  If  the  appraisement  made  by  the  assessors  was 
satisfactory  to  the  tax-payer,  and,  if  the  raise  made 
by  the  Board  of  Review  was  made  after  notice  and  due 
hearing,  and  such  raise  does  not  go  beyond  the  cash 
value  of  the  property  assessed,  the  tax-payer  has  no 
ground  or  complaint  based  upon  the  valuation  of  his 
property. 

3.  If  the  appraisement  made  by  the  assessors  was 
raised  by  the  Board  of  Review  without  notice  to  and 
opportunity  for  a  hearing  of  the  party  assessed,  the 
validity  of  such  raise  or  increase  is  problematical,  and 
justifies  an  appeal  to  the  courts  by  way  of  injunction 
for  relief,  even  though  such  raise  (it  being  made  with- 
out notice  and  hearing)  does  not  put  a  valuation  on  the 
property  in  excess  of  its  actual  cash  value. 

4.  In  the   Stuckart  case  the   Supreme   Court   re- 
cently held  Section  49  of  the  New  Revenue  Act  uncon- 
stitutional.    That  section  limited  the  total  aggregate 
of  taxes  in  this  county  to  five  per  cent  of  the  val- 
uation, exclusive  of  taxes  for  state  purposes  and  the 
school  buildings.     Several  proceedings  by  mandamus 
were  instituted  in  the  Circuit  Court  here  against  the 
County  Clerk,  involving  his  right  to  reduce  the  total 
taxes  to  such  five  per  cent  aggregate.    Pending  that 
hearing,  the  Supreme  Court's  decision  in  the  Stuckart 
case  was  announced,  in  which  the  right  of  the  County 
Clerk  to  reduce  under  Section  49  the  aggregate  taxes 
to  five  per  cent,  as  aforesaid,  was  denied.  In  the  Stuck- 
art case,  a  petition  for  rehearing  is  pending,  and  in 
the  mandamus  cases,  the  Circuit  Court  followed  the  de- 
cision of  the   Supreme   Court  in  the  Stuckart  case. 
Those  mandamus  cases  are  now  pending  on  appeal  in 
the  Supreme  Court,  and  involve  the  legality  of  Sec- 
tion 49  of  the  Revenue  Act.    The  petition  for  a  rehear- 
ing, as  well  as  the  argument  in  the  mandamus  cases, 
will  come  before  the  Supreme  Court  in  the  course  of 
a  few  days,  and  I  think  a  decision  will  be  very  promptly 
rendered,  probably  before  the  middle  of  this  month. 


It  is  difficult  to  anticipate  what  the  Supreme  Court  will 
do,  but,  in  my  opinion,  the  chances  are  that  the  petition 
for  a  rehearing  will  be  denied.  The  holding  of  Sec- 
tion 49  unconstitutional,  in  my  opinion,  does  not  fur- 
nish a  defense  against  the  payment  of  the  personal 
property  taxes  where  the  personal  property  has  been 
appraised  at  its  fair  value,  and  20  per  cent  thereof  has 
been  the  basis  of  the  assessment.  The  fact  that  the  lim- 
itation as  to  the  amount  of  the  tax  that  could  be  as- 
sessed is  wiped  out  by  the  holding  of  Section  49  uncon- 
stitutional does  not,  in  my  opinion,  affect  what  was  at 
that  time  of  the  appraisement  the  fair  cash  value  of  the 
personal  property  appraised. 

With  reference  to  real  estate,  an  entirely  different 
question  arises,  which  need  not  now  be  determined. 
The  value  of  real  estate  depends  largely  upon  the 
amount  of  its  earning  capacity,  and  its  earning  capac- 
ity is  necessarily  affected  by  the  charges  incurred  in 
the  way  of  taxes  and  the  preservation  of  property. 

5.  In  those  cases  where  the  personal  property  has 
been  fairly  appraised  at  its  cash  value,  and  the  ap- 
praisement has  not  been  interfered  with  by  the  Board 
of  Review,  or  where  the  appraisement  fixed  by  the 
Board  of  Review  does  not  exceed  the  fair  cash  value 
of  the  personal  property,  and  the  action  of  the  Board 
of  Review  was  had  after  due  notice  and  opportunity 
for  a  hearing,  I  have  been  advising  my  personal  clients, 
particularly  where  the  taxes  owing  were  not  of  an 
unusually  large  amount,  to  make  payment  under  pro- 
test rather  than  submit  to  a  levying  of  a  warrant  by 
the  Collector.  Such  levy,  however,  cannot  be  made  by 
the  Collector  until  after  he  has  made  final  demand,  and, 
after  such  levy  has  been  made,  the  Collector  cannot  sell 
until  he  has  given  notice  at  least  five  days  previous  to 
the  day  of  sale  by  advertisement,  as  provided  by  Sec- 
tion 157  of  Chapter  120,  Revised  Statutes.  Even  after 
levy,  in  cases  where  the  tax-payer  desires  to  seek  re- 
lief, he  will  have  time  to  prevent  the  sale  by  making 
prompt  application  to  the  courts. 

4.  As  I  said  at  the  outset,  it  is  impossible  in  this 
way  to  furnish  an  opinion  which  will  be  applicable  to 


8 

the  peculiar  facts  in  any  particular  case,  and,  there- 
fore, each  case  must  be  determined  by  the  facts  appli- 
cable to  it. 

THE  POWER  OF  THE  STATE  FOOD  COMMISSIONER  OF  ILLINOIS 
TO  COMPEL  MANUFACTURERS  OF  BAKING  POWDER  TO 
LABEL  THEIR  GOODS. 

(Illinois  Manufacturers'  Association,  April  20,  1910.) 
Your  Secretary  has  submitted  to  us  the  following 
rule  or  regulation  adopted  by  the  Illinois  State  Food 
Commissioner,  Mr.  Alfred  H.  Jones: 

"All  baking  powders  sold  in  the  State  must  be 
labeled  in  a  conspicuous  way  and  place  with  a 
name  signifying  the  class  or  variety  to  which  it 
belongs,  based  on  the  name  of  the  acid  ingredient ; 
thus,  for  example :    '  This  is  an  alum  baking  pow- 
der;'  'An  alum   phosphate   baking  powder;'   'A 
phosphate  baking  powder';  'A  cream  of  tartar 
baking  powder.'     Potassium  and  sulphate  is  re- 
garded as  unwholesome,  if  not  injurious,  and  its 
use  in  any  article  of  food  is  prohibited." 
and  has  asked  for  our  opinion  as  to  the  power  of  the 
Commissioner    to    compel    manufacturers    of    Baking 
Powder  containing  alum,  to  label  the  same  "This  is  an 
alum  baking  powder." 

We  are  also  asked  to  assume,  and  we  so  do,  that 
the  two  words  "Baking  Powder"  are  and  constitute 
the  ' '  true  and  appropriate  name ' '  of  the  article  in  ques- 
tion, and  that  the  article  is  not  an  "extract,"  and  this 
opinion  is  based  upon  such  assumption. 

We  have  carefully  examined  the  various  laws  en- 
acted from  time  to  time  by  our  Legislature,  and  par- 
ticularly, 

"An  Act  to  prevent  and  punish  the  adulteration 
of  articles  of  food,  drink  and  medicine,  and  the 
sale  thereof  when  '  adulterated ; '  approved  June  1, 
1881,  (I  Starr  &  C.  111.  Stat.,  2d  Ed.,  p.  1232 ;)  also, 
"An  Act  to  protect  the  public  from  imposition 
in  relation  to  canned  or  'preserved  food;'  ap- 
proved June  27,  1885,  (p.  1230  idem),  and  also, 


"An  Act  to  provide  for  the  appointment  of  a 
State  Food  Commissioner  and  to  define  his  powers 
and  duties,  and  fix  his  compensation,  and  to  pro- 
hibit and  prevent  adulteration,  fraud  and  decep- 
tion in  the  manufacture  and  sale  of  articles  of 
food,  and  to  repeal  certain  acts  or  parts  of  acts 
therein  named;  approved  April  24,  1899."  Laws 
1899.  (p.  263.) 

We  are  unable  to  find  any  statutory  provision  relat- 
ing in  express  terms  to  the  manufacture,  sale  or  label- 
ing of  "Baking  Powder,"  or  any  provision  which,  in 
our  opinion,  can  be  so  construed  as  to  require  Baking 
Powders  to  be  labeled  so  as  to  show  their  acid  ingredi- 
ents. 

The  Legislature  has  not  vested  the  Food  Commis- 
sioner with  power  to  adopt  or  enforce  any  such  rule  as 
the  one  in  question,  and  we  are  therefore  of  the  opinion 
that  said  rule  has  not  the  force  of  a  law,  and  that  its 
violation  does  not  constitute  a  criminal  offense.  To 
hold  otherwise  would  result  in  giving  legislative  pow- 
ers to  an  executive  officer.  It  is  also  to  be  noted  that 
legislative  provisions,  somewhat  similar  to  the  rule  in 
question,  have  been  held  to  be  in  violation  of  the  Com- 
merce clause  of  the  Federal  Constitution. 

Inasmuch  as  the  tendency  of  the  courts  is  to  favor 
the  validity  and  enforcement  of  laws  intended  to  pre- 
vent the  adulteration  of  food  and  impositions  on  the 
public,  and  particularly  as  the  precise  question  submit- 
ted to  us  has  not,  so  far  as  we  are  aware,  received  any 
judicial  construction,  we  suggest  that  if  the  Food  Com- 
missioner intends  to  enforce  the  rule  in  question,  it 
would  be  advisable,  if  possible,  that  arrangements  be 
made  with  him  for  the  prosecution  by  him  of  but  one 
suit,  it  to  be  made  a  "test  case." 


RULING  OF  THE  STATE  FOOD  COMMISSIONER  AS  TO  THE  SALE 
OF  GOODS  MANUFACTURED  IN  THIS  STATE  TO  DEALERS  IN 
OTHER  STATES. 

The  following  questions  were  submitted  to  the  State 
Food  Commissioner: 

"Will  manufacturers  be  permitted  to  sell  goods 
which  do  not  comply  with  the  Illinois  Pure  Food 
Law  to  dealers  in  other  states! 

Can  manufacturers  sell  such  goods  to  other  resi- 
dents of  Illinois  for  sale  to  dealers  in  other 
states?" 

To  the  foregoing  questions  the  following  reply  was 
received : 

May  18,  1900. 
Mr.  J.  M.  Glenn, 

Secretary,  Illinois  Manufacturers'  Association, 

528  Marquette  Building,  Chicago,  111. 
Dear  Sir:  In  reply  to  your  favor  of  yesterday,  I 
beg  to  say  that  at  present  the  Commissioner  has  de- 
cided not  to  interfere  with  the  manufacturers'  goods 
for  export,  even  if  they  are  not  labeled  according  to 
our  law  and  rulings  when  they  are  exported  to  other 
states.  This  of  course  refers  only  to  the  labeling  or 
to  any  standard  of  strength  and  not  to  the  use  of  any 
deleterious  substances,  which  are  prohibited  in  any 
case. 

The  question  whether  the  manufacturer  can  sell  such 
goods  to  other  residents  in  this  state  is  one  that  has 
not  been  discussed  with  the  Commissioner,  but  as  we 
should  allow  a  jobber  to  carry  in  stock  such  goods  made 
in  other  states,  it  is  clear  that  the  home  manufacturers 
may  also  be  permitted  to  sell  such  goods  to  the  job- 
ber. This  liberal  ruling  is  of  course  only  temporary, 
but  in  case  it  is  changed  due  notice  will  be  given  to  the 
manufacturers  and  jobbers. 

Yours  truly, 

J.  H.  MONRAD, 
Assistant  Food  Commissioner. 


11 


OPINION    IN    REFERENCE    TO    THE   LAW    REQUIRING    CORPORA- 
TIONS TO  FILE  AN  ANNUAL  REPORT. 

(Illinois     Manufacturers'     Association,     October     22, 

1900.) 

Since  rendering  your  opinion  of  August  31st  last, 
respecting  the  constitutionality  of 

' '  An  Act  requiring  corporations  to  make  annual 
report  to  the  Secretary  of  State  and  providing 
for  the  cancellation  of  Articles  of  Incorporation 
for  failure  to  do  so ;  Approved  April  21,  1899, ' ' 
we  have  given  the  matter  further  consideration,  and 
now  confirm  the  conclusion  therein  expressed,  namely, 
that  the  portion  of  said  Act  which  gives  the  Secretary 
of  State  power  to  forfeit  the  charter  of  a  corporation 
failing  to  comply  with  its  provisions,  is  unconstitu- 
tional. A  corporation  cannot  be  deprived  of  its  char- 
ter unless  by  the  judgment  of  a  competent  tribunal,  and 
in  a  proceeding  instituted  for  that  purpose.  The  Sec- 
retary of  State  is  an  executive  officer  only,  and  has 
no  judicial  powers.  To  deprive  a  corporation  of  its 
charter  is  the  exercise  of  a  judicial  act,  and,  therefore, 
in  our  opinion,  clearly  beyond  the  power  of  the  Secre- 
tary of  State. 

We,  however,  consider  the  remaining  portions  of 
the  Act  to  be  constitutional.  The  Act  should,  there- 
fore, be  read  with  the  provisions  for  the  penalty  in 
question,  eliminated ;  in  other  words,  the  requirements 
of  the  Act  stand  the  same  as  if  no  penalty  had  been 
•expressly  provided  for  a  violation  thereof. 

This  presents  the  question  whether  a  corporation  can 
be  punished  for  a  failure  to  comply  with  the  terms  of 
the  Act. 

In  our  opinion  a  corporation  failing  to  comply  with 
its  terms  renders  itself  liable  to  quo  warranto  pro- 
ceedings. 

If  such  proceedings  be  instituted,  and  a  corporation 
be  found  guilty,  the  judgment  of  the  court  may  be 
•either  one  of  ouster,  that  is,  depriving  the  corporation 


12 

of  its  charter,  or  it  may  be  a  fine  in  any  sum  not  ex- 
ceeding $25,000  for  each  offense. 

In  the  absence  of  any  judicial  interpretation,  we  are 
of  the  opinion  that  the  Act  should  be  complied  with, 
and  we,  therefore,  so  advise. 

NOTE: — In  People  ex  rel.  v.  Rose,  207  111.,  352,  the  law  in  question 
was  held  constitutional.  It  was  also  held  that  the  cancellation  entered 
by  the  secretary  of  state  did  not  of  itself  work  a  forfeiture  of  the  char- 
ter, but  such  cancellation  was  merely  prima  facie  evidence  of  non-user,, 
which  may  be  availed  of  by  the  People  in  a  proceeding  to  forfeit  the 
charter. — Ed. 

THE  RIGHT  OF  A  CORPORATION  TO  PURCHASE  OR  OWN  STOCK 
IN    ANOTHER   CORPORATION. 

(J.  Manz  Engraving  Co.,  February  9,  1901.) 
The  question  is : 

"If  a  corporation  can  purchase  or  own  stock 
in  another  corporation,  in  other  words  *  *  *  if 
there  is  any  way  in  which  a  company  incorporated 
under  the  laws  of  this  State  can  acquire  another 
company  not  engaged  in  the  same  line  of  business 
as  the  first." 

In  this  State  a  corporation  has  no  power  either  di- 
rectly or  indirectly  to  subscribe  for  or  purchase  shares 
of  stock  in  another  corporation,  whether  such  corpora- 
tion is  engaged  in  the  same  line  of  business  or  other- 
wise. In  certain  cases  a  corporation  may  take  the 
stock  of  another  corporation  in  payment  of  a  debt  or 
perhaps  as  security  for  a  debt,  but  it  has  no  power  to 
purchase  or  hold  such  stock.  We,  therefore,  answer 
the  question  in  the  negative. 

THE    FOREIGN    CORPORATION    LAW    OF    ILLINOIS. 

(C.  C.  Wallin  &  Sons,  February  15,  1901.) 
Dear  Sir:  Yours  of  the  14th  enclosing  copy  of  a 
letter  from  C.  C.  Wallin  &  Sons  in  reference  to  foreign 
corporation  act  of  this  State  is  at  hand.  I  do  not  know 
just  what  particular  query  Wallin  &  Sons  desired 
answered.  If  their  question  governs  the  entire  act  of 
1899  governing  foreign  corporations  doing  business  in 
this  State,  I  beg  to  reply,  that  in  my  opinion,  a  for- 


13 

eign  corporation  doing  business  in  this  State  without 
compliance  with  the  act  in  question  will  legally  sub- 
ject itself  to  the  penalties  therein  provided.  There  are 
two  penalties  specified,  one,  that  a  foreign  corporation 
doing  business  in  this  State  not  complying  with  the  act 
shall  be  subject  to  a  fine  of  not  less  than  one  thousand 
dollars ;  the  other  is,  that  such  a  corporation  so  in  de- 
fault cannot  maintain  any  suit,  or  action,  legal  or 
equitable,  in  any  of  the  courts  of  this  State  upon  any 
demand,  whether  arising  out  of  contract  or  tort. 

I  know  of  no  case  where  it  has  been  attempted  to  col- 
lect the  fine  referred  to.  I  regard  that  part  of  the 
statute  as  of  minor  importance.  The  penalty  which 
prohibits  the  maintenance  of  a  suit,  however,  is  of  sub- 
stantial import  and  has  been  sustained  by  the  Supreme 
Court  of  the  State,  and  also  by  the  United  States  Cir- 
cuit Court  (Judge  Seaman)  sitting  in  Wisconsin,  who 
passed  upon  a  similar  statute  in  force  in  that  State. 
Both  by  Judge  Seaman  and  in  other  Federal  Circuits 
similar  statutes  have  been  enforced  against  litigants  in 
the  United  States  Courts. 

I  advise,  therefore,  that  foreign  corporations  doing 
business  in  this  State  should  comply  with  the  act  in 
question.  In  the  construction  of  the  Illinois  Statutes 
and  similar  statutes  in  other  States  litigation  has 
arisen  over  what  is  transacting  business  in  the  State. 
I  do  not  know  whether  Wallin  &  Sons  come  within  the 
provision  of  the  statute  as  to  "transacting  business  in 
this  State"  as  no  facts  in  this  connection  are  given  to 
me  upon  which  to  pass. 


WHETHER     CORPORATIONS     ARE     ORGANIZED     FOR       'PURELY 
MANUFACTURING  PURPOSES. ' ' 

(Latrobe  Steel  &  Coupler  Company,  April  25,  1901.) 
Secretary  Glenn  of  the  Illinois  Manufacturers'  As- 
sociation has  turned  over  to  me,  as  its  counsel,  your 
letter  to  him  of  the  18th  inst.  for  a  reply.  The  question 
whether  you  are  a  manufacturing  corporation  exclu- 
sively, and  therefor  not  subject  to  have  your  capital 


14 

stock  and  franchise  valued  by  the  State  Board  of 
Equalization  depends  entirely  upon  your  charter.  The 
Supreme  Court  has  said:  ''In  order  to  settle  this 
question  resort  must  be  had  to  its  charter. ' '  Evanston 
Electric  Illuminating  Co.  v.  Kochersperger,  175  111.,  26, 
and  Distilling  &  Cattle  Feeding  Co.  v.  People,  161  111., 
101.  Whether  you  sell  merely  the  product  manufac- 
tured by  your  Company,  or  sell  products  manufactured 
by  your  Company  and  other  concerns,  the  question  will 
go  back  to  the  initial  point,  and  that  is,  what  does  the 
charter  of  your  Company  specify  as  its  corporate  pur- 
pose. Probably  few  corporations  organized  under  the 
laws  of  this  State  have  had  their  charters  drawn  with 
an  eye  to  the  question  under  consideration.  I  believe 
that  it  will  be  found  upon  examination  of  the  most  of 
the  charters  that  their  language  is  not  sufficient  to 
bring  the  case  within  the  proviso  of  the  Statute  which 
exempts  strictly  manufacturing  companies  from  as- 
sessment of  its  capital  stock  and  franchise  by  the  State 
Board  of  Equalization.  If  your  Company  sells  merely 
the  product  that  it  manufactures,  and  its  charter  is 
so  drawn  as  to  make  the  Company's  purpose  exclu- 
sively that  of  manufacturing  within  the  meaning  of 
the  law,  your  Company  will  be  exempt  from  assess- 
ment of  its  capital  stock  and  franchise  by  the  State 
Board.  It  is  largely  in  view  of  the  fact  that  few  of 
the  charters  protect  existing  corporations  in  the  di- 
rection indicated,  that  the  proposed  amendment  to  the 
Revenue  Act  was  drawn  by  me  at  the  instance  of  the 
Manufacturers'  Association.  The  necessity  for  such  a 
change  had  become  all  the  more  important  in  view 
of  the  two  recent  decisions  above  pointed  out. 

WHETHER  INCIDENTAL  SALES  IN  FOREIGN  STATE  BY  TRAVEL- 


.  . 


ING    SALESMEN    TO    FILL    "HURRY    ORDERS77    CONSTITUTE 
DOING  BUSINESS. 

(Allen  B.  Wrisley  Co.,  June  21,  1901.) 
Dear  Sir:    Your  favor  of  the  20th  inst.,  enclosing 
copy  of  a  letter  from  the  Allen  B.  Wrisley  Co.,  in 
which  they  enquire  whether  or  not  the  business  trans- 


15 

acted  by  it  in  other  states  is  inter-state  commerce,  is 
at  hand.  The  Wrisley  Co.  says  it  has  its  main  office 
and  stock  of  goods  in  Chicago,  Illinois,  owns  no  real 
estate  and  has  no  office  in  any  other  state,  and  carries 
no  stock  of  goods  there  except  a  small  stock  in  the 
hands  of  its  traveling  salesmen  in  other  states  who, 
out  of  such  stock,  but  not  in  the  ordinary  course  of 
business  in  isolated  instances  execute  "hurry  orders"; 
such  stock  at  no  time  exceeding  in  value  a  few  dol- 
lars. I  assume  that  the  orders  received  by  the  sales- 
men, except  the  so-called  "hurry  orders,"  are  taken 
subject  to  the  approval  of  the  home  office,  where  the 
orders  are  filled.  Such  a  course  of  business,  in  my 
opinion,  constitutes  "inter-state  commerce"  within 
the  meaning  of  the  constitutional  provision,  and  such 
a  corporation  need  not  comply  with  the  statutes  of  the 
different  states  governing  foreign  corporations  ' '  doing- 
business"  therein. 
See: 

Commonwealth  v.  Farnum,  114  Mass.,  267. 

In  re  Houston,  47  Fed.,  539 ;  14  L.  R.  A.,  719. 

Cooper  Mfg.  Co.  v.  Ferguson,  113  U.  S.,  727. 

Havens  v.  Diamond,  93  111.  App.,  557. 


AS  TO  WHETHER  THE  LAW  REQUIRING  CORPORATIONS  TO  FILE 
ANNUAL  REPORT  WITH  THE  SECRETARY  OF  STATE  APPLIES 
TO  FOREIGN  CORPORATIONS. 

(Audit  Company  of  New  York,  July  9,  1901.) 

Answering  yours  of  the  2nd  inst.,  in  which  you  refer 
to  an  opinion  of  my  firm  of  October  22nd,  1900,  con- 
cerning ' '  the  validity  of  the  law  requiring  corporations 
to  file  an  annual  report  with  the  Secretary  of  State," 
I  reply  to  your  inquiry  as  follows: 

The  law  referred  to  in  that  opinion  was  that  ap- 
proved April  21,  1899,  and  in  force  July  1,  1899.  The 
law  governs  only  corporations  organized  under  the 
laws  of  this  state.  The  law  was  repealed  at  the  last 
session  of  the  Legislature,  by  an  act  approved  May  10, 
1901,  and  in  force  July  1,  1901.  This  latter  act  is  a 


16 

substitute  for  the  former  act,  and,  like  the  former 
act,  applies  only  to  corporations  organized  under  the 
laws  of  this  State.  As  your  company  is  a  corporation 
organized  under  the  laws  of  another  State,  it  is  not  af- 
fected by  the  law  in  question. 


NOTE: — Foreign  corporations  are  now  required  to  make  the  report 
under  the  provisions  of  section  3  of  the  act  of  May  18,  1905.  (Sess. 
Laws  of  1905,  pp.  121-2.— Ed. 


WHAT  CONSTITUTES      DOING  BUSINESS       WITHIN  THE  MEAN- 
ING OF  THE  FOREIGN   CORPORATION   LAW  OF  COLORADO. 

(Challenge  Machinery  Co.,  July  11,  1901.) 
The  Challenge  Machinery  Company  asks  whether 
or  not  it  is  now  " doing  business"  within  the  meaning 
of  the  foreign  corporation  law  of  Colorado.  It  says 
that  some  time  ago  it  complied  with  the  Colorado  stat- 
ute by  filing  a  copy  of  its  charter  in  that  state,  and 
that  at  that  time  it  was  doing  business  by  placing  its 
goods  on  consignment  with  a  selling  company  there, 
but  that  this  method  of  doing  business  is  no  longer  pur- 
sued. 

The  Machinery  Company  does  not  state  what  its 
present  method  is  of  doing  business  in  Colorado.  If 
the  Machinery  Company  has  no  local  agent  or  house, 
but  sells  its  goods  in  Colorado  through  the  medium  of 
traveling  salesmen,  whose  orders  are  taken  subject  to 
the  approval  of  the  home  office,  and  its  goods  are 
shipped  direct  to  Colorado  to  the  parties  from  whom 
orders  are  received,  it  is  not  " doing  business"  in  that 
State.  If  the  Machinery  Company  will  state  precisely 
in  what  way  it  conducts  business,  if  at  all,  in  Colorado, 
I  can  be  more  categorical  in  my  reply. 


NOTE: — See  later  opinions  July  20,  1901,  Challenge  Machinery  Co., 
October  8,  1901,  and  January  15,  1902,  American  Soda  Fountain  Co., 
March  24,  1903,  J.  W.  Sefton  Mfg.  Co.,  January  5,  1905,  Rubber  Paint 
Co.— Ed. 


17 


THE  FOREIGN  CORPORATION  LAWS  OF  ILLINOIS,  INDIANA, 
IOWA,  MICHIGAN,  NEBRASKA,  SOUTH  DAKOTA  AND  WIS- 
CONSIN. 

(fielding  Bros.  &  Co.,  July  17,  1901.) 
"We  are  a  corporation  organized  under  the 
laws  of  the  State  of  Connecticut.  We  have  an 
office  and  carry  a  stock  of  goods  in  Chicago.  From 
this  office  we  do  business  in  Illinois,  Michigan,  In- 
diana, Iowa,  Nebraska,  South  Dakota  and  Wis- 
consin. No  goods  are  delivered  by  our  traveling 
salesmen,  all  goods  being  shipped  direct  from  this 
office,  and  all  orders  are  taken  subject  to  the  ap- 
proval of  this  office.  What  we  would  like  to  know 
is,  if  we  are  obliged  to  comply  with  the  laws  of 
the  above  named  States  regarding  foreign  corpo- 
rations. Some  of  these  States  require  us  to  have 
a  representative  in  the  State  who  can  accept  serv- 
ice, etc.,  for  us,  and  if  we  do  not  have  such  agent 
they  debar  us  from  collecting  any  account  in  the 
State.'/ 

My  opinion  is  as  follows: 

Illinois.1  In  Illinois  a  foreign  corporation  formed 
for  pecuniary  profit,  before  it  is  authorized  or  permit- 
ted to  transact  business  in  Illinois,  or  to  continue  busi- 
ness therein,  must  designate  some  person  as  its  agent 
in  this  State  on  whom  service  of  process  may  be  had ; 
it  must  also  maintain  a  public  office  in  this  State  for 
the  transaction  of  its  business  and  keep  at  that  office 
books  to.  enable  it  to  comply  with  the  laws  of  this  State. 
It  is  expressly  made  subject  to  all  liabilities,  restric- 
tions and  duties  which  are  or  may  be  imposed  upon 
domestic  corporations  of  like  character  and  has  no 
other  or  greater  powers.  It  must  file  in  the  office  of  the 
Secretary  of  State  a  copy  of  its  charter  duly  certified. 
It  must  make  to  the  Secretary  of  State  a  duly  sworn 
statement  showing  the  proportion  of  capital  stock  of 
the  corporation  represented  in  Illinois  by  its  property 


1  NOTE: — The   act  of  May  18,  1905    (Sess.  Laws  1905,  p.   121)   now 
governs  the  subject   of   foreign   corporations. — Ed. 


18 

located  and  business  transacted  therein.  The  state- 
ment must  further  show  the  name  and  address  of  the 
agent  of  the  foreign  corporation  in  this  State ;  it  must 
pay  to  this  State  to  the  Secretary  of  State  upon  the 
proportion  of  its  capital  stock  represented  by  its  prop- 
erty and  business  in  Illinois,  fees  equal  to  those  re- 
quired of  similar  corporations  formed  under  the  laws 
of  this  State.  Every  foreign  corporation  amenable 
to  the  provisions  of  the  Act  referred  to  neglecting  to 
comply  therewith  is  expressly  made  subject  to  a  fine 
of  not  less  than  $1,000  and  in  addition  thereto  a  for- 
eign corporation  so  in  default  can  maintain  no 

"suit  or  action  either  legal  or  equitable  in  any  of 
the  courts  of  this  State  (Illinois)  upon  any  demand 
whether  arising  out  of  contract  or  tort." 
Indiana.  The  laws  of  Indiana  require  that  agents 
of  foreign  corporations  before  entering  upon  their 
duties  of  agency  in  Indiana  shall  deposit  in  the  clerk's 
office  of  the  county  where  the  agents  propose  doing 
business  the  power  of  attorney  or  other  authority  un- 
der and  by  virtue  of  which  they  act  as  agents.  Such 
agents  must  procure  from  their  corporations  and  file 
with  the  Clerk  of  the  Circuit  Court  of  the  county 
where  they  propose  doing  business  an  authenticated 
order  from  the  Board  of  Directors  of  the  corporation 
authorizing  citizens  and  residents  of  Indiana  having 
a  claim  or  demand  against  such  corporations  arising 
out  of  any  transaction  in  Indiana  with  such  agents  to 
sue  in  respect  to  the  same  in  any  court  of  Indiana  of 
competent  jurisdiction,  and  further  authorizing  serv- 
ice of  process  on  such  agents  to  be  valid  on  such  cor- 
porations. Foreign  corporations 

"shall  not  enforce  in  any  court  of  this  State  any 
contracts  made  by  their  agents  or  by  persons  as- 
suming to  act  as  their  agents  before  a  compliance 
by  such  agents  or  persons  acting  as  such  with  the 
provisions ' ' 

of  the  law.  The  statute  of  Indiana  defines  "agent" 
thus: 

"Any  person  who  shall  directly  or  indirectly  re- 
ceive or  transmit  money  or  other  valuable  thing* 


19 

to  or  for  the  use  of  such  corporation,  or  who  shall 
in  any  manner  make  or  cause  to  be  made  any  con- 
tract or  transact  any  business  for  or  on  account 
of  any  such  foreign  corporation,  shall  be  deemed 
an  agent  of  such  corporation,  to  be  subjected  to 
the  provisions  of  this  Act  relating  to  agents  of  for- 
eign corporations. 

The  foregoing  sections  shall  not  apply  to  per- 
sons acting  as  agents  for  foreign  corporations  for 
a  special  or  temporary  purpose  or  for  purposes 
not  within  the  ordinary  business  of  such  corpora- 
tions nor  shall  it  apply  to  attorneys-at-law  as 
such. ' ' 

The  law  further  provides  that  a  person  acting  as 
agent  of  a  foreign  corporation  neglecting  to  comply 
with  the  law  shall  be  subjected  to  a  fine  of  not  less 
than  Fifty  ($50)  Dollars. 

The  law  further  provides  that  if  a  foreign  corpora- 
tion doing  business  in  Indiana  or  acquiring  a  right,  in- 
terest or  lien  upon  real  estate  therein  shall  transfer 
from  an  Indiana  State  Court  to  a  Federal  Court  save 
by  the  regular  course  of  appeal  after  trial  in  the  State 
courts  an  action  commenced  by  or  against  such  cor- 
poration in  any  of  the  State  courts  by  or  against  any 
citizen  or  resident  of  Indiana,  or  if  such  foreign  corpo- 
ration shall  commence  in  any  Federal  Court  suit  on  a 
contract  made  in  Indiana  or  liability  accrued  therein 
against  a  citizen  or  resident  of  Indiana,  that  such  for- 
eign corporation  shall  thereby  forfeit  all  right  and  au- 
thority to  do  or  transact  business  in  Indiana  or  hold 
real  property  therein  or  liens  thereon,  and  all  contracts 
between  such  foreign  corporations  so  in  default  and 
citizens  or  residents  of  Indiana  are  rendered  by  the 
law  void  as  in  favor  of  such  corporation,  but  enforce- 
able by  such  citizen  at  his  election.  It  is  expressly 
provided  that  the  provisions  of  the  Act  are 

"made  conditions   upon  which   such   corporation 
may  be  authorized  to  do  business  in  this  State  or 
hold  titles  to  or  liens  on  real  estate  therein." 
The  statutes  also  provide  that  every  such  corporation 
"shall  have  and  maintain  a  public  office  or  place 


20 

in  this  State  for  the  transaction  of  its  business 
where  proper  books  shall  be  kept  to  enable  such 
corporation  to  comply  with  the  constitution  and 
statutory  provisions  governing  such  corporations ; 
and  it  shall  designate  an  agent  or  representative 
in  this  State  on  whom  service  of  process  may  be 
had;  and  such  corporation  shall  be  subject  to  all 
the  liabilities,  restrictions  and  duties  which  are  or 
may  be  imposed  upon  corporations  of  like  char- 
acter organized  under  the  general  laws  of  this 
State  and  shall  have  no  other  or  greater  powers." 
No  corporation  is  permitted  to  engage  in  any  busi- 
ness other  than  expressly  authorized  in  its  charter 
or  hold  any  real  estate  except  such  as  may  be  neces- 
sary or  proper  for  carying   on  its  legitimate  busi- 
ness. 

The  statute  provides  also  that  every  such  corpora- 
tion shall  file  in  the  office  of  the  Secretary  of  State  a 
certified  copy  of  its  charter,  and  the  principal  or  agent 
in  Indiana  of  the  said  corporation  shall  make  and  for- 
ward to  the  Secretary  of  State 

"a  statement  duly  sworn  to  of  the  proportion  of 
the  capital  stock  of  said  corporation  which  is  rep- 
resented by  its  property  located,  and  business 
transacted  in  the  State  of  Indiana,  and  such  cor- 
poration shall  be  required  to  pay  into  the  office 
of  the  Secretary  of  State  of  this  State  upon  the 
proportion  of  its  capital  stock  represented  by  its 
property  and  business  in  Indiana  incorporating 
taxes  and  fees  equal  to  those  required  of  similar 
corporations  formed  within  and  under  the  laws  of 
this  State." 

Upon  a  compliance  with  the  above  provisions  such 
corporations  are  authorized  to  do  business  in  Indiana. 
Every  corporation  failing  to  comply  with  the  condi- 
tions of  the  law  shall  be  subject  to  a  fine  of  not  less  than 
One  Thousand  ($1,000)  Dollars  and  cannot  maintain 
any  suit  or  action  in  any  of  the  courts  of  the  State 
upon  any  demand  whether  arising  out  of  contract  or 
tort. 


21 

Iowa.  The  statute  of  that  State  provides  that 
"any  corporation  for  pecuniary  profit  other,  than 
carrying  on  mercantile  or  manufacturing  busi- 
ness organized  under  the  laws  of  another  State 
or  of  any  territory  of  the  United  States,  or  of  any 
foreign  country  which  has  transacted  business  in 
the  State  of  Iowa  since  the  first  day  of  September, 
1886,  or  desires  thereafter  to  transact  business  in 
this  State," 

shall  file  with  the  Secretary  of  State  a  certified  copy 
of  its  charter  and  a  resolution  of  its  Board  of  Direc- 
tors or  Stockholders  authorizing  such  filing,  and  also 
authorizing  service  of  process  to  be  made 

"upon  any  of  its  officers  or  agents  in  this  State 
engaged  in  transacting  its  business." 
The  foreign  corporation  is  required  to  pay  to  the 
Secretary  of  State  the  same  fee  required  for  the  or- 
ganization   of   corporations   in    Iowa.      Corporations 
transacting  business  in  Iowa  prior  to  September  1st, 
1886,  are  expressly  made  exempt  from  the  payment  of 
the  required  fees.    Upon  the  receipt  of  a  permit  from 
the  Secretary  of  State 

"for  the  transaction  of  the  business  of  such  cor- 
poration *  *  *  said  corporation  shall  be  permitted 
and  authorized  to  conduct  and  carry  on  its  busi- 
ness in  this  State.    Nothing  in  that  section  shall 
be  construed  to  prevent  any  foreign  corporation 
from   buying,    selling   and   otherwise    dealing   in 
notes,  bonds,  mortgages  or  other  securities." 
Until  the  foreign  corporation  has,  in  good  faith,  com- 
plied with  the  law  and  taken  out  a  permit  it  shall  not 
"possess  the  right  to  exercise  the  power  of  emi- 
nent domain  or  exercise  any  of  the  rights  or  privi- 
leges conferred  upon  corporations." 
A  foreign  corporation  carrying  on  its  business  in 
violation  of  the  provisions  of  the  law  shall  forfeit  for 
every  day  it  is  in  default  One  Hundred  ($100)  Dol- 
lars and  the  agent,  officer  or  employe 

"who  shall  knowingly  act  or  transact  such  busi- 
ness for  such  corporation  when  it  has  no  valid 
permit  as  provided  herein" 


22 

is  subject  to  a  fine  not  exceeding  One  Hundred  ($100) 
Dollars  or  to  imprisonment  in  the  county  jail  not  ex- 
ceeding thirty  days,  or  both.  Foreign  corporations, 
their  officers  and  agents  doing  business  in  Iowa,  are 
expressly  made 

11  subject  -to  all  the  liabilities,  restrictions  and 
duties  that  are  or  may  be  imposed  on  corporations 
of  like  character  organized  under  the  general  laws 
of  this  State,  and  shall  have  no  other  or  greater 
powers. ' ' 

Michigan.  The  statutes  of  Michigan  provide  that 
corporations  organized  under  the  laws  of  any  other 
State  for  any  purpose  or  object  for  which  a  corpora- 
tion may  be  formed  in  Michigan 

"upon  filing  in  the  office  of  the  Secretary  of  State 
a  certified  copy  of  their  Articles  of  Incorporation 
or  memoranda  of  association  and  evidence  and 
notice  of  the  appointment  of  an  agent  in  this 
State  for  service  of  process,  may  for  such  pur- 
pose or  object  carry  on  their  business  in  this 
State  and  shall  enjoy  all  the  rights  and  privileges, 
and  shall  be  subject  to  all  the  restrictions,  re- 
quirements and  liabilities  of  corporations  of  like 
character  incorporated  under  the  Michigan  stat- 
utes." 

The  statutes  further  provide  for  the  payment  of  a 
franchise  fee  of  one-half  mill  upon  each  dollar  of  the 
authorized  capital  stock  of  such  corporation,  and  a 
like  fee  upon  each  increase  of  such  capital  stock.  This 
franchise  fee  applies  both  to  domestic  as  well  as  for- 
eign corporations. 

Nebraska.  The  statutes  of  Nebraska  provide  that 
any  corporation  organized  under  the  laws  of  any 
other  State  which  shall  file  with  the  Secretary  of  State 
of  Nebraska  a  true  copy  of  its  charter  or  articles  of 
association  and  a  certified  copy  of  a  resolution  adopted 
by  its  Board  of  Directors  accepting  the  provisions  of 
this  Act  shall  become  a  corporation  of  Nebraska.  The 
statute  further  provides  that  foreign  corporations 
shall  not  acquire,  take  or  hold  any  lands  or  real  estate 
in  Nebraska  provided  this  shall  not  prevent  foreign 


23 

corporations  having  liens  upon  real  estate  or  any  in- 
terest therein 

''from  holding  or  taking  a  valid  title  to  the  real 
estate  subject  to  such  lien  nor  shall  it  prevent  any 
such  corporation  from  enforcing  any  lien  or  judg- 
ment for  any  debt  or  liability  now  existing  or 
which  may  hereafter  be  created,  nor  from  be- 
coming a  purchaser  at  any  sale  made  for  the  pur- 
pose of  collecting  or  enforcing  the  collection  of 
such  debt  or  judgment. ' ' 

It  will  be  noted  that  the  resolution  of  the  Board  of 
Directors  of  the  foreign  corporation  is  to  accept  "the 
provisions  of  this  Act."  Upon  such  acceptance  in  the 
language  of  the  statute  the  foreign  corporation  be- 
comes "a  body  corporate  of  this  State." 

It  is  needless  to  set  out  here  the  various  numerous 
"provisions"  which  govern  "a  body  corporate  of  this 
State." 

South  Dakota.  The  statutes  of  South  Dakota  pro- 
vide that  no  corporation  organized  under  the  laws  of 
any  other  State 

"shall  transact  any  business  within  this  State  or 
acquire,  hold  and  dispose  of  property,  real,  per- 
sonal or  mixed,  within  this  State,  or  sue  or  main- 
tain any  action  at  law  or  otherwise  in  any  of  the 
courts  of  this  State  until  such  corporation  shall 
have  filed  in  the  office  of  the  Secretary  of  State 
a  duly  authenticated  copy  of  its  charter  or  ar- 
ticles of  incorporation,  or  shall  have  complied 
with  the  provisions  of  this  Act.  Provided  that 
the  provisions  of  this  Act  shall  not  apply  to  cor- 
porations and  associations  created  for  religious 
or  charitable  purposes  only." 

The  statute  further  provides  that  such  corporations 
shall  appoint  an  agent,  who  shall  reside  at  some  ac- 
cessible point  in  the  State,  duly  authorized  to  accept 
service  of  process,  and  upon  whom  service  may  be 
had  in  an  action  in  which  said  corporation  is  a  party, 
and  such  service  shall  be  taken  and  held  as  personal 
service  upon  such  corporation.  A  duly  authenticated 
copy  of  the  appointment  of  said  agent  must  be  filed 


24 

and  recorded  in  the  office  of  the  Secretary  of  Stata 
and  Begistrar  of  Deeds  in  the  county  where  such 
agent  resides,  and  a  certified  copy  thereof  by  the  Sec- 
retary of  State  or  Eegistrar  of  Deeds  shall  be  con- 
clusive evidence  of  the  appointment  and  authority  of 
such  agents.  The  statute  further  provides  that  no 
action  shall  be  maintained  in  any  of  the  courts  of 
South  Dakota  or  any  contract  made  or  entered  into 
in  that  State  by  such  corporation  unless  such  corpora- 
tion shall  have  complied  with  the  provisions  of  the 
Act. 

The  statute  further  provides  that  it  shall  be  unlaw- 
ful for  any  person  to  act  within  this  State  as  agent 
or  officer  of  any  foreign  corporation  unless  such  cor- 
poration shall  have  appointed  an  agent.  Every  per- 
son so  acting  as  such  agent  or  officer  of  any  such  cor- 
poration shall  be  fined  not  less  than  ten  ($10)  dollars 
or  more  than  one  hundred  ($100)  dollars  and  im- 
prisoned in  the  county  jail  not  less  than  ten  nor  more 
than  thirty  days,  or  both. 

Wisconsin.  The  statutes  of  Wisconsin  provide  that 
every  foreign  corporation 

"actually  engaged  in  manufacturing  within  the 
State  shall  upon  the  written  request  of  any  resi- 
dent creditor  thereof  within  sixty  days  from  the 
time  of  making  such  request  and  annually  there- 
after upon  a  like  request  file  in  the  office  of  the 
Secretary  of  State  of  this  State  a  statement  show- 
ing the  capital  stock  subscribed,  the  amount 
thereof  actually  paid  in,  the  full  name  of  each  of 
the  stockholders  and  the  amount  of  stock  held 
by  each,  and  shall,  at  the  time  of  so  filing  the  first 
of  said  statements,  file  in  such  office  a  certified 
copy  of  its  articles  of  organization  or  associa- 
tion." 

The  statute  further  provides  that  if  said  corpora- 
tion shall  fail  to  file  said  report  within  said  time  it 
shall  forfeit  all  right  to  further  carry  on  or  transact 
any  business  within  the  State,  and  any  person  carry- 
ing on  any  business  in  violation  of  the  Act  shall  be 
liable  to  a  penalty,  for  every  offense,  of  not  less  than 


25 

twenty-five  ($25)  dollars  nor  more  than  one  hundred 
($100)  dollars. 

The  statute  further  provides  that  service  may  be 
had  upon  any  foreign  corporation  by  serving  the  sum- 
mons upon  any  officer  within  the  State,  or  any  agent 
having  charge  of  or  conducting  any  business  therefor 
in  the  State,  or  any  trustee  or  assignee  of  such  cor- 
poration, 

"but  such  service  can  be  made  upon  a  foreign 
corporation  only,  either  when  it  has  property  in 
the  State  or  the  cause  of  action  arose  therein,  or 
the  cause  of  action  exists  in  favor  of  a  resident  of 
the  State." 

The  statute  further  provides  that  a  foreign  corpo- 
ration may  prosecute  or  defend  any  action  or  pro- 
ceeding in  the  courts  of  that  State  in  the  same  manner 
as  corporations  created  under  the  laws  of  this  State. 
The  statute  further  provides  that  no  foreign  cor- 
poration 

"shall  transact  business  or  acquire,  hold  or  dis- 
pose of  property  in  this  State" 

until  such  corporation  shall  file  in  the  office  of  the 
Secretary  of  State 

"a  duly  authenticated  copy  of  its  charter,  articles 
of  association  and  incorporation  and  all  amend- 
ments thereto  which  may  be  made  while  it  shall 
continue  to  do  business  therein." 
Such  corporation  shall  have  been  deemed  to  consti- 
tute the  Secretary  of  State  its  true  and  lawful  attor- 
ney   upon    whom    summons,    notice,    pleadings    and 
process  may  be  served  in  respect  to  any  liability  aris- 
ing out  of  any  business,  contract  or  transaction  in 
this  State,  which  service  upon  said  Secretary  of  State 
or  his  assistant  shall  be  deemed  valid  service  upon 
such  corporation. 

The  statute  provides  that  the  Secretary  of  State 
shall  forward  a  copy  of  all  papers  served  on  or  to  the 
principal  place  of  business  of  the  corporation.  Fail- 
ure to  comply  with  the  provisions  of  the  Act  subjects 
the  corporation,  its  officers  and  agents  to  a  penalty 
of  five  hundred  ($500)  dollars.  The  statute  provides 


26 

that  all  contracts  made  by  or  on  behalf  of  any  such 
corporation  which  has  not  complied  with  the  provis- 
ions of  the  Act  shall  be  wholly  void  on  its  behalf,  and 
on  behalf  of  its  assigns,  but  shall  be  enforceable 
against  it  or  them.  For  filing  such  articles  of  asso- 
ciation the  corporation  shall  pay  to  the  Secretary  of 
State  the  sum  of  twenty-five  ($25)  dollars  and  for 
amendments  thereto  ten  ($10)  dollars. 

Upon  the  assumption  that  the  statement  of  facts 
herein  contained  is  complete  and  accurately  describes 
your  method  of  "doing  business"  in  the  foregoing 
States,  I  am  of  the  opinion  that  you  need  not  comply 
with  the  laws  of  any  of  those  States  other  than  the 
laws  of  Illinois,  and  that  you  can  legally  enforce  the 
collection  of  any  account  owing  you  by  residents  or 
citizens  of  any  of  those  States  other  than  Illinois, 
without  compliance  with  the  respective  laws  of  such 
respective  States.  You  are  doing  business  in  Illinois 
within  the  meaning  of  the  statutes  of  that  State,  and 
the  interpretation  given  by  State  and  Federal 
tribunals  to  laws  of  that  kind.  Therefore,  to  enforce 
collection  of  any  account  owing  to  you  by  a  citizen  or 
resident  of  the  State  of  Illinois,  as  well  as  to  avoid 
enforcement  of  the  penalty  prescribed  by  the  statute, 
it  is  necessary  that  you  should,  if  you  have  not  al- 
ready done  so,  comply  with  the  laws  of  Illinois  gov- 
erning foreign  corporations. 

AS  TO  WHAT  CONSTITUTES  "DOING  BUSINESS"  IN  A  FOREIGN 
STATE,  PARTICULARLY  MICHIGAN. 

(Parlin  &  Orendorff  Co.,  July  18,  1901.) 
* '  We  would  like  very  much  to  have  the  question 
as  to  what  constitutes  doing  business  in  a  foreign 
State.  In  asking  this  question  it  would  be  well  to 
refer  to  the  Michigan  decisions  touching  on  this 
subject,"  etc. 

I  do  not  know  to  what  particular  Michigan  decision 
reference  is  made,  nor  do  I  know  whether  the  question 
as  to  what  constitutes  "doing  business"  is  asked  with 
reference  to  the  Michigan  statutes.  In  an  opinion  of 


27 

this  date  to  Belding  Bros.  &  Co.  I  quote  at  length  the 
provisions  of  the  Michigan  statute,  as  well  as  the  pro- 
visions of  certain  other  State  statutes,  giving  the  right 
of  foreign  corporations  to  do  business  in  those  par- 
ticular States.  I  refer  to  those  opinions  for  an  analy- 
sis of  those  States.  I  am  familiar  with  the  following 
Michigan  decisions  on  the  subject: 

Coit  v.  Sutton,  60  N.  W.  Rep.,  690;  S.  C.  102 

Mich.,  324. 
M'oline  Plow  Co.  v.  Wilkinson,  62  N.  W.  Rep., 

119;  S.  C.  105  Mich.,  157. 
People  v.  Hawkins,  64  N.  W.  Rep.,  736;  S.  C. 

106  Mich.,  479. 
Wilcox  Cordage  &  Supply  Co.  v.  Mosher,  72 

N.  W.  Rep.,  117 ;  S.  C.  114  Mich.,  4. 
Rough  v.  Breitung,  75  N.  W.  Rep.,  147 ;  S.  C. 

117  Mich.,  49. 

I  presume  that  the  Michigan  decision  to  which 
Parlin  &  Orendorff  refer  is  included  in  those  to  which 
I  have  just  made  reference. 

In  Coitm  v.  Sutton,  60  N.  W.  Rep.,  690,  the  validity 
of  the  Michigan  statute  was  not  questioned.  There, 
the  plaintiff,  an  Illinois  corporation,  recovered  a 
judgment  in  the  lower  court.  The  facts  showed  that 
the  plaintiff 

"was  engaged  in  the  business  of  shipping  from 
Illinois  goods  manufactured  in  that  State  to  its 
customers  in  Michigan  on  orders  given  it  by  mail 
or  taken  by  its  agents  in  Michigan.  The 

law  in  question  imposes  a  tax  upon  corporations 
for  the  privilege  of  doing  business  in  Michigan. 
It  is  a  tax  upon  the  occupation  of  the  corporation 
with  a  provision  that  all  its  contracts  shall  be 
void  until  the  tax  is  paid,  which,  if  enforced, 
would  embarrass  plaintiff  with  its  commerce  with 
inhabitants  of  Michigan.  It  must,  therefore,  be 
held  that  the  Act  in  question  does  not  apply  to 
foreign  corporations  whose  business  within  this 
State  constitutes  merely  the  sale  through  itin- 
erant agents  and  delivering  commodities  manu- 
factured, etc.,  in  this  State. ' ' 


28 

It  will  thus  be  seen  that  in  that  case  the  court  held 
that  the  facts  above  quoted  from  the  opinion  did  not 
constitute  * '  doing  business ' '  in  Michigan. 

In  Moline  Plow  Co.  v.  Wilkinson,  supra,  the  Moline 
Plow  Co.,  of  Illinois,  as  a  foreign  corporation  paid  to 
the  State  Treasurer  of  Michigan  the  fee  required  of 
foreign  corporations  as  a  franchise  fee.  Thereafter 
the  Moline  Plow  Co.  brought  mandamus  against  the 
State  Treasurer  of  Michigan  to  compel  him  to  refund 
the  money  so  paid  as  a  franchise  fee.  The  fee  so  paid 
amounted  to  four  hundred  dollars,  and  was  paid  under 
protest,  the  Plow  Co.  claiming  that  it  was  doing  busi- 
ness in  Michigan 

11  through  itinerant  agents  whose  duty  it  is  to 
solicit  orders  and  sell  goods  manufactured  in  Illi- 
nois. ' ' 

The  Plow  Co.  claimed  that  the  Michigan  statute 
governing  foreign  corporations  was  unconstitutional 
as  being  an  interference  with  interstate  commerce. 
The  court  said  the  Plow  Co. 

"not   only   sells   its   products   through   itinerant 
agents,  but  it  comes  within  the  State  asking  to 
have  its   articles   of  association  filed  here,   and 
that  it  may  be  put  on  the  same  footing  with  our 
own  home  corporations.     The  Act  gives  the  for- 
eign corporations  the  same  privileges  as  domestic 
ones,  but  provides  that  it  must  comply  with  the 
Act  by  paying  the  franchise  fee  which  a  domestic 
corporation  must  pay.     The  relator  has  had  its 
articles   of  association  filed  here,   has   paid  the 
franchise  fee  provided  by  the  Act,  and  is  not  en- 
titled to  have  its  money  repaid." 
Thus,  in  the  Plow  Co.  case,  the  court  did  not  in  any 
way  pass  upon  the  question  under  consideration.    It 
merely  decided  that  the  Plow  Co.,  having  complied 
with  the  State  statutes,  could  not  thereafter  get  its 
money  back.    In  other  words,  its  charter  having  been 
filed  and  the  fee  having  been  paid,  the  Plow  Co.  there- 
by was  put  "on  the  same  footing  with  our  own  home 
corporations."      The    case,    therefore,    furnishes    no 
precedent  whatever  for  the  present  discussion. 


29 

People  v.  Hawkins,  106  Mich.,  479,  presented  this 
phase :  The  Standard  Oil  Co.,  of  Ohio,  had  for  several 
years  done  business  in  Michigan, 

"having  a  general  office  in  Detroit  through  which 
its  business  for  a  portion  of  the  State  was  done. 
This  business  consisted  principally  in  selling  pe- 
troleum to  customers  in  this  State.  The  oil  was, 
as  a  rule,  shipped  to  Detroit  in  tank  and  other 
cars  and  there  stored  until  sold,  being  then  re- 
shipped.  *  *  *  All  money  received  for  sales 
of  oil  in  that  portion  of  the  State  that  was  with- 
in the  jurisdiction  of  the  Detroit  office  was  sent 
to  that  office,  and  came  to  the  hands  of  the  de- 
fendant who  was  bookkeeper  and  assistant  cash- 
ier. He  was  convicted  of  embezzling  twenty-six 
hundred  dollars  of  the  company's  money  and  the 
case  comes  here  (before  the  Supreme  Court)  upon 
exceptions  before  sentence." 

The  Standard  Oil  Company  had  not  complied  with 
the  foreign  corporation  statute.  The  court  held : 

"that  this  statute  (that  governing  foreign  corpo- 
rations) was  not  intended  to  prohibit  foreign  cor- 
porations from  doing  business  within  the  State 
until  they  should  comply  with  its  terms." 
Also,  that 

"  if  it  should  be  held  that  the  Act  under  consider- 
ation was  prohibited  and  that  the  company  could 
not  make  or  enforce  contracts  it  would  not  follow 
that  this  defendant  could  not  be  guilty  of  em- 
bezzlement. ' ' 

People  v.  Hawkins  was  decided  September  27,  1895. 
In  Rough  v.  Breiting,  decided  May  17,  1898,  and 
which  refers  to  People  v.  Hawkins,  the  Supreme  Court 
of  Michigan  upheld  the  statute  which  provides  that 
"all  contracts  made  in  this  State  after  the  first 
day  of  January,  1894,  by  any  corporation  which 
has  not  first  complied  with  the  provisions  of  this 
Act,  shall  be  wholly  void. ' ' 

In  People  v.  Hawkins  the  question  as  to  what  "do- 
ing business"  means  was  not  before  and  was  not  con- 
sidered by  the  court. 


30 

In  Wilcox  Cordage  &  Supply  Co.  v.  Mosher,  114 
Mich.,  64,  it  was  held,  following  Coit  v.  Sutton,  102 
Mich.,  324,  that  where  a  foreign  corporation  sells  its 
goods  in  Michigan  "by  itinerant  salesmen,"  such  cor- 
poration is  not  doing  business  within  the  State. 

In   Rough   v.   Breitung,   supra,   the    Davis    Mining 
Company,  an  Illinois  corporation,  owned  mining  prop- 
erty and  was  doing  a  mining  business  in  Michigan.    It 
had  not  complied  with  the  laws  of  Michigan  governing 
foreign  corporations.    One  of  those  laws  provides  that : 
"All  contracts  made  in  this  State,  after  the  first 
day  of  January,  1894,  by  any  corporation  which 
has  not  first  complied  with  the  provisions  of  this 
Act,  shall  be  wholly  void." 

A  contract  for  the  sale  of  the  mine  was  made.  Upon 
a  refusal  of  the  purchaser  to  carry  out  the  contract, 
suit  was  brought  thereon  in  Michigan.  The  court 
said: 

"We  are  forced  to  the  conclusion  from  this  rec- 
ord, that  this  was  a  corporate  contract,  and  void 
under  the  law  above  cited.  While  the  corporation 
might  be  estopped  to  plead  such  a  contract  in  its 
defense,  it  cannot  maintain  an  action  upon  it 
without  annulling  the  law." 

And  the  court  cites  and  relies  upon  Seamens  v. 
Temple  Co.,  105  Mich.,  400;  Society  v.  Lester,  105 
Mich.,  716 ;  People  v.  Hawkins,  106  Mich.,  482. 

The  question  of  what  "doing  business"  meant  was 
not  considered  by,  nor  before  the  court.  It  seems  to 
have  been  conceded  that  the  contract  sued  on  had  been 
made  by  a  foreign  corporation  doing  business  in  Michi- 
gan. 

In  Seamens  v.  Temple  Co.  the  receiver  of  a  Wiscon- 
sin Mutual  Fire  Insurance  Company  that  had  never 
complied  with  the  statutes  of  Michigan,  brought  suit 
there.  The  court  held  that  under  the  Michigan  stat- 
ute governing  insurance  companies,  the  latter,  whether 
domestic  or  foreign,  could  not  effect  insurance  on 
property  in  Michigan,  unless  the  insurance  company 
had  complied  with  the  Michigan  laws.  The  insurance 
company  in  question  had  not  complied  with  those  laws, 


31 

and  it  was  therefore  held  that  it  could  not  maintain 
an  action  in  Michigan  to  recover  an  assessment  made 
against  the  members  of  the  insurance  company.  The 
case  did  not  turn  upon  the  question  as  to  what  "doing 
business"  meant,  but  because 

"the  whole  scheme  is  a  flagrant  attempt  to  evade 
the  provisions  of  the  laws  of  the  several  States 
which  are  intended  to  restrict  the  insurance  busi- 
ness." 

Mutual  Benefit  Society  v.  Lester,  105  Mich.,  716,  was 
like  the  case  of  Seamens  v.  Temple  Co.,  and  throws  no 
light  upon  the  subject.  It  merely  held  that  the  Mutual 
Benefit  Society,  which  was  a  foreign  institution,  had 
not  complied  with  the  laws  of  Michigan,  and  therefore 
was  forbidden  to  do  business  there.  The  court  said : 

"The  collection  of  this  money  arose  out  of  the 
acts  of  the  plaintiff  which  were  forbidden,  namely 
the  doing  business,  issuing  certificates  to  citizens, 
and  residents  of  Michigan,  and  the  collection  of 
assessments  by  its  agents  within  the  State. ' ' 
What   the    law   is    depends    very   much   upon    the 
peculiar  facts  in  each  case.    The  Parlin  &  Orendorff 
Co.  seem  to  request  a  general  definition  comprehend- 
ing all  cases  of  "doing  business."    It  is  probably  an 
impossible  task  to  undertake  to  define,  in  advance, 
the  general  term  "doing  business,"  because  it  is  im- 
possible to  anticipate  the  particular  facts  that  may 
arise  in  the  endless  number  of  methods  in  which  for- 
eign corporations  are  selling  their  wares  in  the  dif- 
ferent States.    I  have,  however,  gone  at  length  into  the 
matter  with  reference  to  the  State  of  Michigan,  be- 
cause of  the  impression  I  have  formed  that  the  query 
in  the  present  case  may  have  reference  to  that  State. 

THE   FOREIGN   CORPORATION  LAW   OF  INDIANA. 

(American  Strawboard  Co.,  July  18,  1901.) 

I  acknowledge  receipt  of  yours  of  the  10th  inst., 

containing  therein  inclosed  a  letter  to  you  of  the  8th 

inst.,  from  the  American  Strawboard  Company,  asking 

for  my  opinion  as  to  whether  or  not  the  Strawboard 


32 

Company  must  comply  with  an  Act  passed  by  the  Gen- 
eral Assembly  of  the  State  of  Indiana,  March  15, 
1901,  relating  to  foreign  corporations  doing  business 
in  that  State.  The  Indiana  Act  in  question  is  printed 
on  pages  621  and  622  of  the  Session  Laws  of  Indiana 
of  1901.  I  have  compared  that  Act  with  the  Act  of 
Illinois,  approved  April  22,  1899;  in  force  July  1, 
1899,  governing  foreign  corporations  doing  business 
in  this  State.  It  is  very  clear  that  the  Indiana  stat- 
ute is  practically  an  exact  copy  of  the  Illinois  statute. 
I  have  heretofore  rendered  an  opinion  to  the  Associa- 
tion that  the  Illinois  statute  in  question  is  constitu- 
tional. (See  my  opinion  dated  February  15,  1901, 
covering  the  inquiry  of  C.  C.  Wallin  &  Sons.)  I  am  of 
the  same  opinion  as  to  the  Indiana  statute  now  under 
consideration.  The  statute  provides  that 

"every  corporation  for  pecuniary  profit  formed 
in  any  other  State,  Territory  or  country,  before  it 
shall  be  authorized  or  permitted  to  transact  busi- 
ness in  this  State  (Indiana),  or  to  continue  busi- 
ness therein  if  already  established" 
shall  maintain  a  public  office  in  the  State;  shall  keep 
books,  there  to  enable  the  corporation  to  comply  with 
the  laws  of  Indiana  governing  corporations ;  shall 
designate  an  agent  in  Indiana  upon  whom  service 
of  process  may  be  had ;  that  such  foreign  corporations 
shall  be  subject  to  all  the  liabilities,  restrictions  and 
duties  imposed  upon  domestic  corporations  and  shall 
have  no  greater  powers.  That  the  foreign  corporation 
shall  engage  in  no  business  other  than  that  authorized 
by  its  charter  or  by  the  laws  of  Indiana,  and  shall 
hold  no  real  estate,  except  what  may  be  necessary  to 
carry  on  its  legitimate  business.  That  such  foreign 
corporation  shall  file  with  the  Secretary  of  State  a 
certified  copy  of  its  charter ;  that  the  principal  or  agent 
in  Indiana  of  the  foreign  corporation  shall  make  to  the 
Secretary  of  State  a  duly  sworn  statement 

"of  the  proportion  of  the  capital  stock  of  said 
corporation  which  is  represented  by  its  property 
located  and  business  transacted  in  the  State  of 
Indiana,  and  such  corporation  shall  be  required 


33 

to  pay  into  the  office  of  the  Secretary  of  State  in 
this  State,  upon  the  proportion  of  its  capital  stock 
represented  by  its  property  and  business  in  In- 
diana, incorporating  taxes  and  fees  equal  to  those 
required  of  similar  corporations  formed  within 
the  laws  of  this  State," 

that  every  foreign  corporation  failing  to  comply  with 
the  conditions  of  the  law  shall  be  subject  to  a  fine  of 
not  less  than  one  thousand  ($1,000)  dollars,  and  in  ad- 
dition no  such  foreign  corporation  so  in  default  can 
"maintain    any    suit    or    action,    either    legal    or 
equitable,  in  any  of  the  courts  of  this  State,  upon 
any  demand,  whether  arising  out  of  contract  or 
tort." 

The  law  exempts  from  its  provisions,  railroad  and 
telegraph  companies  already  doing  business,  also  in- 
surance companies.  Immediately  after  September  1, 
1901,  the  Secretary  of  State  is  required  to  inform  the 
prosecuting  attorney  of  the  different  counties  of  the 
foreign  corporations  so  in  default. 

The  American  Straw  Board  Company  says  that  it 
is  an  Illinois  corporation,  and  has  "strictly  manufac- 
turing plants  in  the  State  of  Indiana. ' '  I  construe  this 
statement  to  mean  that  the  Straw  Board  Company 
owns  property  in  Indiana,  is  operating  manufacturing 
plants  in  its  own  name  and  making  deliveries  from 
these  plants.  In  my  opinion,  the  American  Straw 
Board  Company  is  "doing  business"  in  Indiana,  and 
is  subject  to  the  statute  of  that  State  of  March  15, 
1901,  hereinabove  quoted.  The  Straw  Board  Com- 
pany, therefore,  in  order  to  avoid  the  penalties  pro- 
vided by  the  Act  in  question,  should  comply  with  its 
provisions. 

AS  TO  WHAT  CONSTITUTES  "DOING  BUSINESS"  WITHIN  THE 
MEANING  OF  THE  FOREIGN  CORPORATION  LAW  OF  THE 
STATE  OF  COLORADO. 

(Challenge  Machinery  Co.,  July  20,  1901.) 
"The  goods  we   sell  in   Colorado,   at  present, 
are  sold  there  by  one  of  our  representatives  travel- 


34 

ing  in  that  State,  or  by  mail  orders  to  our  home 
office  in  Chicago,  mailed  by  the  customers  placing 
the  order.  We  carry  no  stock  of  any  kind  in  the 
State  of  Colorado,  and  all  orders  are  shipped 
from  our  factory  at  Chicago. ' ' 

Associating  the  facts  stated  in  the  letter  of  the 
Machinery  Co.  of  the  15th  inst.  with  the  facts  outlined 
in  my  opinion  to  that  Company  of  the  llth  inst.,  I 
am  clearly  of  the  conclusion  that  the  Machinery  Com- 
pany is  not  " doing  business"  within  the  meaning  of 
the  statute  of  Colorado  governing  foreign  corpora- 
tions. The  facts  indicate  that  the  Machinery  Com- 
pany is  engaged  in  strictly  interstate  commerce,  so  far 
as  Colorado  is  concerned.  The  Machinery  Company 
may,  in  Colorado,  advertise  its  goods,  take  orders 
there,  make  contracts  of  sale  respecting  same,  and 
ship  them  from  Illinois  to  its  customers  in  Colorado. 
It  may  also  employ  itinerant  salesmen  who  travel 
through  Colorado  from  county  to  county,  or  from 
town  to  town,  to  secure  orders.  The  term  "doing  busi- 
ness" cannot  be  construed  to  mean  taking  orders  or 
making  sales  by  sample,  or  by  agents  coming  into 
Colorado  from  another  State  for  that  purpose.  To 
so  construe  the  Act  would  make  it  l  i  offend  against  the 
constitution  of  the  United  States,  and  would  be  impos- 
ing unlawful  restrictions  on  interstate  commerce." 

See  Cooper  Mfg.  Co.  v.  Ferguson,  113  U.  S.,  727 
(a  case  that  went  up  from  Colorado) ;  Coit  v.  Sutton, 
102  Mich.,  327;  McNaughton  v.  McGirl,  20  Mont.,  124; 
Toledo,  etc.,  Co.  v.  Glenn  Mfg.  Co.,  55  Ohio  St.,  221 ; 
Bateman  v.  Western,  etc.,  Milling  Co.,  1  Tex.  Civil  Ap- 
peals, 92;  S.  C.  20  S.  W.  Rep.,  932;  Ccmal  Co.  v. 
Mahlenbrock,  63  N.  J.  Law,  286;  Mershon  &  Co.  v. 
Pottsville  Lumber  Co.,  187  Pa.  St.,  12. 

THE   FOREIGN    CORPORATION    LAW   OF   PENNSYLVANIA. 

(Sanford  Mfg.  Co.,  July  20,  1901.) 
"We  are  just  in  receipt  of  the  enclosed  papers 
from  the  Secretary  of  Pennsylvania,  referring  to 
the   Act  to   prohibit   foreign   corporations   doing 


35 

business  in  the  State.      This  company  is  a  close 
company.    We  have  a  branch  office  in  New  York, 
and  a  salesman  traveling  from  New  York  who 
makes  Eastern  Pennsylvania,  and  another  sales- 
man traveling  from  Chicago,  who  makes  Western 
Pennsylvania.  Our  goods  are  all  sold  and  shipped 
exclusively  to  the  trade.    Is  it  necessary  for  us  to 
comply  with  the  provisions  of  this  Act!" 
The  Act  prohibiting  foreign  corporations  from  doing 
business  in  Pennsylvania,  approved  April  22,   1874, 
provides  thus: 

"SECTION  1.  Be  it  enacted,  etc.,  That  from  and 
after  the  passage  of  this  Act,  no  foreign  corpora- 
tion shall  do  any  business  in  this  Commonwealth, 
until  said  corporation  shall  have  established  an 
office  or  offices,  and  appointed  an  agent  or  agents 
for  the  transaction  of  its  business  therein. 

"SEC.  2.  It  shall  not  be  lawful  for  such  cor- 
poration to  do  any  business  in  this  Commonwealth, 
until  it  shall  have  filed  in  the  office  of  the  Secretary 
of  the  Commonwealth  a  statement,  under  the  seal 
of  said  corporation,  and  signed  by  the  President 
or  Secretary  thereof,  showing  the  title  and  object 
of  said  corporation,  the  location  of  its  office  or 
offices,  and  the  name  or  names  of  its  authorized 
agent  or  agents  therein ;  and  the  certificate  of  the 
Secretary  of  the  Commonwealth,  under  the  seal 
of  the  Commonwealth,  of  the  filing  of  such  state- 
ment, shall  be  preserved  for  public  inspection  by 
each  of  the  said  agents  in  each  and  every  of  said 
offices. 

"SEC.  3.  Any  person  or  persons,  agent,  officer 
or  employe  of  any  such  foreign  corporation,  who 
shall  transact  any  business  within  this  Common- 
wealth for  any  such  foreign  corporation,  without 
the  provisions  of  this  Act  being  complied  with, 
shall  be  guilty  of  a  misdemeanor,  and  upon  con- 
viction thereof  shall  be  punished  by  imprisonment 
not  exceeding  thirty  days,  and  by  fine  not  ex- 
ceeding one  thousand  dollars,  or  either,  at  the 
discretion  of  the  court  trying  the  same." 


36 

Upon  assumption  that  all  the  facts  showing  the 
methods  of  doing  business  by  it  in  Pennsylvania  are 
contained  in  the  letter  of  the  Sanford  Company  to 
you  of  the  18th  inst.,  I  am  of  the  opinion  that  that 
Company  does  not  come  within  the  meaning  of  the 
Pennsylvania  statute  above  quoted. 

In  BlaJceslee  Mfg.  Co.  v.  Hilton,  5  Pa.  Super.  Ct., 
184,  the  court  held  a  foreign  corporation  may 

' '  employ  agents  living  in  Pennsylvania,  to  go  from 
county  to  county,  and  from  town  to  town,  and 
from  person  to  person,  to  secure  orders.  Or  the 
agent  may  never  go  outside  of  his  own  county, 
city,  or  town,  thus  being,  in  one  sense,  a  local 
agent,  and  yet  be  doing  business  which  is  not  and 
cannot  be  reached  under  our  Act  of  1874.  *  * 
The  words  'doing  any  business,'  as  used  in 
the  Act,  should  not  be  construed  to  mean  taking 
orders,  or  making  sales  by  sample,  by  agents  com- 
ing into  our  State  from  another,  for  that  purpose. 
To  hold  otherwise  would  make  the  Act  offend 
against  the  Constitution  of  the  United  States,  as 
imposing  unlawful  restrictions  on  interstate  com- 
merce. ' ' 

Similar  doctrine  is  held  in  Kilgore  v.  Smith,  122  Pa. 
48,  and  the  most  recent  Pennsylvania  case  affirming  the 
doctrine  of  the  two  cases  above  cited,  and  of  other  de- 
cisions, is  that  of  Mershon  v.  Pottsville  Lumber  Co., 
187  Pa.  St.,  12,  decided  July  21,  1898. 


VALIDITY  OF  THE  LAW  IMPOSING  A  TAX  ON  COMPANIES  AND 
COKPOKATIONS  CONVEYING  FREIGHT  AND  PASSENGERS  IN 
CARS  IN  THE  STATE  OF  INDIANA. 

(Illinois  Zinc  Co.,  July  24,  1901.) 

Yours,  enclosing  letter  of  the  18th  inst.  from  the 
Illinois  Zinc  Co.,  is  at  hand.  The  Zinc  Company  asks 
for  our  opinion  in  relation  to  a  law  passed  by  the 
legislature  of  Indiana  on  March  4,  1901,  imposing  a 
tax  on  companies  and  corporations  conveying  freight 


37 

or  passengers  in  cars  in  the  State  of  Indiana.    I  have 
examined  the  law  in  question..   It  provides  that 

"Every  joint  stock  association,  company,  co- 
partnership or  association,  incorporated  or  acting 
under  the  laws  of  this  or  any  other  State,  and  con- 
veying to,  from,  through,  in  or  across  this  State 
or  any  part  thereof,  passengers  or  travelers,  or 
freight,  in  palace  cars,  drawing  room  cars,  sleep- 
ing cars,  dining  cars  or  chair  cars,  refrigerator 
cars,  fast  freight  cars  for  the  transportation  of 
horses,  cattle,  hogs,  sheep,  or  any  other  kind  of 
freight  whatever,  under  any  contract,  express  or 
implied,  with  any  railroad  company  or  the  mana- 
gers, lessees,  agents  or  receivers  thereof,  shall  be 
deemed  to  be  a  sleeping  car  company,  for  the  pur- 
poses of  this  Act ;  and  every  such  sleeping  car  com- 
pany doing  business  in  this  State  shall  annually, 
between  the  first  day  of  April  and  the  first  day  of 
June,  make  out  and  deliver  to  the  Auditor  of 
State  a  statement,  verified  by  the  oath  of  the 
officer  or  agent  of  such  company,  making  such 
statement  with  reference  to  the  first  day  of  April 
next  preceding." 

The    statute    provides    that    such    statement    shall 
show : 

(1)  The  capital  stock  of  the  corporation. 

(2)  The  number  of  shares,  and  the  par  value  there- 
of. 

(3)  The  principal  place  of  business  of  the  corpora- 
tion. 

(4)  The  market  value  of  the  shares,  or  if  the  shares 
have  no  market  value,  then  the  actual  value  thereof. 

(5)  The   real   estate,  fixtures,   etc.,  owned  by  the 
corporation  subject  to  local  taxation  within  the  State; 
and  the  location  and  assessed  value  thereof  in  each 
county  where  the  same  is  assessed  for  local  taxation. 

(6)  The  real  estate  and  improvements  owned  by 
the  corporation,  situated  outside  the  State  of  Indiana, 
and  not  used  directly  in  the  conduct  of  the  business, 
with  a  description  of  such  property,  where  located,  the 
purpose  for  which  it  is  used,  and  the  sum  at  which 


38 

it  is  assessed  for  taxation  in  the  locality  where  situ- 
ated. 

(7)  All  mortgages,   and  where   recorded,   and  the 
names  and  residences  of  the  holders  of  the  same,  upon 
the  whole  or  any  of  its  property,  together  with  the 
franchises,  and  amounts  thereof. 

(8)  The  total  length  of  the  lines  of  all  the  railroad 
companies  over  which  said  cars  are  run  outside  the 
State  of  Indiana;  the  length  of  the  lines  of  the  rail- 
road companies  over  which  said  cars  are  now  run 
within  each  of  the  counties  and  townships  of  the  State 
of  Indiana. 

The  statute  provides  that  the  State  Board  of  Tax 
Commissioners  shall  ascertain  the  true  cash  value  of 
the  entire  property  owned  by  the  corporation  from 
the  statements,  and  for  that  purpose  shall  take  the 
aggregate  value  of  all  shares  of  the  capital  stock,  in 
case  such  shares  have  a  market  value,  and  in  case  they 
have  none  then  the  actual  value  thereof.  If  the  prop- 
erty of  the  corporation  is  encumbered  by  a  mortgage, 
the  amount  thereof  is  to  be  added  to  the  value  of  the 
shares,  and  the  aggregate  amount  is  to  be  deemed  the 
true  cash  value  of  the  property  of  the  corporation. 

The  statute  provides  that  the  said  Board  of  Tax 
Commissioners,  for  the  purpose  of  ascertaining  the 
cash  value  of  the  corporate  property  within  the  State 
of  Indiana,  shall  ascertain  from  such  statements,  or 
otherwise,  the  assessed  value  for  taxation  in  the  locali- 
ties where  the  same  is  situated,  of  the  several  pieces 
of  real  estate  situate  without  the  State  of  Indiana,  and 
not  specifically  used  in  the  general  business  of  such 
corporation,  which  said  assessed  value  shall  be  de- 
ducted from  the  gross  value  of  the  property  herein 
above  ascertained. 

The  statute  provides  that  the  said  Board  shall  next 
ascertain  and  assess  the  true  cash  value  of  the  cor- 
poration in  case  of  sleeping  cars,  etc.,  by  taking  the 
proportion  of  the  whole  aggregate  value  as  above  as- 
certained, after  deducing  the  assessed  value  of  the 
real  estate  without  the  State,  which  the  length  of  lines 
within  the  State  over  which  said  cars  are  run  bears 


39 

to  the  length  of  the  whole  lines  over  which  said  cars 
are  run.  From  the  entire  value  of  the  property  within 
the  State,  so  ascertained,  there  shall  be  deducted  by 
the  said  Board  the  assessed  value  for  taxation  of  all 
the  real  estate,  structures,  machinery,  and  appliances 
within  the  State,  subject  to  local  taxation  in  the  coun- 
ties and  townships  in  the  State  of  Indiana,  and  the 
residue  of  such  value  so  ascertained,  after  deducting 
therefrom  the  assessed  value  of  such  local  properties, 
shall  be  assessed  by  said  Board. 

The  Act  under  consideration  is  amendatory  and 
supplementary  to  an  Act  approved  March  6,  1891,  as 
amended  March  3,  1893.  The  Act  of  1893  amended  the 
Act  of  1891,  and  provided  that  all  corporations  within 
the  purview  of  the  Act  should  make  a  statement  simi- 
lar to  that  required  by  the  Act  of  1901  above  set  forth. 
The  only  change  made  in  the  law  by  the  amendment  of 
1901  is  to  enlarge  the  definition  of  "sleeping  cars" 
so  as  to  include  ' '  oil  cars,  refrigerator  cars,  fast  freight 
car  or  cars  for  the  transportation  of  horses,  cat- 
tle, sheep,  hogs,  or  any  other  kind  of  freight  what- 
ever. ' '  The  method  of  taxation  and  the  ascertainment 
of  the  value  of  the  property  under  each  of  the  afore- 
mentioned Acts  is  substantially  the  same.  The  Act 
of  1901  came  before  the  United  States  Supreme  Court 
in  the  case  of  P.  C.  C.  &  St.  L.  Ry.  Co.  v.  Backus, 
154  U.  S.,  421,  and  was  by  that  court  declared  to  be 
a  valid  and  constitutional  law.  I  am,  therefore,  of 
the  opinion  that  the  Act  under  consideration  is  consti- 
tutional and  binding  upon  those  coming  within  the 
meaning  of  its  provisions. 

The  question  then  arises  as  to  whether  or  not  the 
Illinois  Zinc  Company  comes  within  the  meaning  of 
the  statute.  In  its  letter  the  Zinc  Company  states  that 
it  is  the  owner  of  a  line  of  tank  cars.  It  does  not  state, 
however,  from  and  to  where  these  cars  run,  nor  what 
the  method  of  doing  business  in  Indiana  is.  I  presume, 
however,  that  the  Zinc  Company  is  an  Illinois  corpo- 
ration, or,  at  least,  that  it  is  not  a  corporation  of  In- 
diana, and  that  it  ships  its  products  from  its  factory 
in  Peru  to  points  in  Indiana  and  elsewhere.  If  this 


40 

is  so,  then  the  Zinc  Co.  is  engaged  in  interstate  com- 
merce under  the  commerce  clause  of  the  Constitution. 
It  is  beyond  the  power  of  a  State  to  levy  a  tax  which 
is  in  substance  and  effect  a  direct  tax  on  interstate 
commerce,  but  this  does  not  deprive  the  States  of  the 
power  to  levy  a  property  tax  upon  property  employed 
in  interstate  commerce  having  a  situs  with  their  juris- 
diction. If  a  corporation  owning  rolling  stock  does 
business  in  States  other  than  the  State  of  its  corpora- 
tion, and  uses  such  rolling  stock  in  the  States  where  it 
does  such  business,  the  situs  of  such  property  will 
be  in  the  State  where  it  is  so  used,  and  such  State  may 
levy  a  tax  on  the  average  amount  of  the  rolling  stock 
thus  used,  even  though  the  corporation  is  engaged  in 
interstate  commerce. 

If,  however,  the  Zinc  Co.  ships  its  own  goods  from 
Illinois  to  Indiana  in  its  own  cars,  and  the  cars,  when 
emptied,  are  returned  to  the  principal  place  of  busi- 
ness of  the  corporation  in  Illinois,  and  are  not  used  in 
any  other  way,  and  the  corporation  does  no  business 
of  any  kind  in  the  State  of  Indiana,  except  as  afore- 
said, I  am  inclined  to  the  opinion  that  the  situs  of 
such  cars  is  in  Illinois,  and  that  the  Zinc  Co.,  probably, 
does  not  come  within  the  purview  of  the  Act  under 
consideration.  The  drift  of  the  courts  has,  however, 
been  strongly  in  favor  of  upholding  the  taxing  power 
of  the  States,  and  some  of  the  decisions  have  gone 
far  towards  making  a  precedent  against  the  Zinc  Co. ; 
but,  when  those  decisions  come  to  be  critically  exam- 
ined, I  believe  there  is  good  ground  to  support  the 
Zinc  Co.'s  position.  Much  will  depend  upon  whether 
the  Zinc  Co.  "does  business"  in  the  State  of  Indiana. 
And  upon  that  particular  point  I  have  indulged  in  the 
above  presumptions.  See  the  following  cases : 

State  v.  Stephens,  146  Mo.,  662;  and  cases 

cited. 

Fargo  v.  Michigan,  121  U.  S.,  230. 
Pickard  v.  Pullman  Co.,  171  TJ.  S.,  34. 
People  v.  Wemple,  138  N.  Y.,  1. 
Pullman  Co.  v.  Pennsylvania,  141  U.  S.,  18. 


41 

Hall  v.  American  Refrig.  Co.,  51  Pac.,  421. 
Adams  Express  Co.  v.  Ohio,  165  U.  S.,  194. 


NOTE: — See,  also,  the  opinion  of  October  30,  1903,  to  the  Kingman 
Plow  Co.— Ed. 


THE   LICENSE   TAX   LAWS  OF   TENNESSEE,   VIRGINIA,   GEORGIA 
AND  NORTH  CAROLINA. 

(Illinois  Sewing  Machine  Co.,  October  7,  1901.) 

The  Sewing  Machine  Company  asks  my  opinion  as 
to  the  effect  of  certain  laws  passed  by  the  legislature 
of  a  number  of  States,  among  them  being  the  State 
of  Tennessee,  Virginia,  Georgia  and  North  Carolina, 
imposing  a  license  tax  on  every  company,  firm  or  cor- 
poration engaged  in  the  business  of  selling  sewing 
machines  through  agents  or  otherwise.  The  Sewing 
Machine  Company  states  that  it  is  strictly  a  mail  order 
house,  has  no  traveling  salesmen,  and  that  its  business 
is  with  dealers  only;  no  sales  being  made  to  the  cus- 
tomer direct;  its  sales  being  made  from  this  city  by 
mail. 

Under  this  state  of  facts  I  am  of  the  opinion  that 
the  Sewing  Machine  Company  is  engaged  in  inter- 
state commerce,  and  is  not  required  to  comply  with 
the  laws  in  question.  Such  laws,  insofar  as  they  at- 
tempt to  levy  a  license  tax  on  corporations  engaged  in 
interstate  commerce,  are  unconstitutional  and  void. 


NOTE: — See,  also,  opinion  of  October  26,  1903,  to  Montgomery  Ward 
&  Co.  and  opinion  of  September  29,  1905,  to  Illinois  Sewing  Machine 
Co.— Ed. 


THE    STATUTE    OF    THE    STATE    OF    NEW    YORK    GOVERNING 
FOREIGN    CORPORATIONS. 

(Hines  Lumber  Co.,  Oct.  7,  1901.) 
The    Lumber    Company    asks    my    opinion    as    to 
whether  or  not  it  is  required  to  comply  with  the  law 
of  the  State  of  New  York,  governing  foreign  corpora- 
tions.   It  says: 


42 

"Most  of  our  business  is  done  by  correspon- 
dence, part  of  it  through  the  personal  solicitation 
of  a  traveling  salesman  who  travels  through  the 
State  of  New  York  and  takes  orders,  sending  the 
orders  to  us  here.  Mail  orders  are  sent  to  the 
house  direct.  The  lumber  is  shipped  to  the  parties 
ordering  it.  We  have  no  branch  house  nor  resi- 
dent agent." 

I  assume  that  orders  taken  by  the  traveling  sales- 
man are  sent  to  the  Chicago  office  for  approval.  If 
this  assumption  is  correct,  then  I  am  of  the  opinion 
that  the  Lumber  Company  is  engaged  in  interstate 
commerce  and  cannot  be  required  to  comply  with  the 
law  under  consideration. 

The  Lumber  Company  states  it  is  familiar  with 
the  various  opinions  rendered  the  Association  as  to 
what  constitutes  "doing  business"  in  a  state,  but  un- 
derstands that  they  were  limited  to  a  particular  case. 
The  opinions  rendered  apply  with  equal  force  to  all 
corporations  in  similar  circumstances,  no  matter  what 
states  they  may  do  business  in. 


THE    VALIDITY    OF    THE    LAW    AMENDING    THE    CHILD    LABOR 
LAW    OF    ILLINOIS. 

(W.  C.  Ritchie  &  Co.,  October  8,  1901.) 

Your  favor  of  August  29th,  1901,  inclosing  letter 
of  August  26th,  1901,  from  W.  C.  Ritchie  &  Co.  in 
which  they  enquire  as  to  the  validity  of  an  act  of  the 
legislature  of  Illinois  passed  May  10,  1901,  amending 
the  so-called  child  labor  law  of  1897,  is  received,  and 
has  been  taken  up  in  due  course.  The  act  of  May  10, 
1901,  is  entitled  thus : 

"An  act  to  amend  sections  four  (4)  and  nine 
(9)   of  an  act  entitled,  'An  act  to  regulate  the 
employment  of  children  in  the  State  of  Illinois, 
and  to  provide  for  the  enforcement  thereof,'  ap- 
proved June  9,  1897,  in  force  July  1,  1897." 
It  thus  purports  to  amend  sections  4  and  9  of  the  act 
of  1897.    Section  4  of  the  act  of  1897  reads  thus : 


43 

"No  person  under  the  age  of  sixteen  years  shall 
be  employed  or  suffered  to  work  for  wages  at  any 
gainful  occupation  more  than  sixty  hours  in  any 
one  week,  nor  more  than  ten  hours  in  any  one 
day." 

The  act  of  1901  reads  thus : 

"No  person  under  the  age  of  sixteen  years  shall 
be  employed  or  suffered  to  work  for  wages  at  any 
gainful  occupation  more  than  sixty  hours  in  any 
one  week,  nor  more  than  ten  hours  in  any  one 
day." 

"All  establishments  subject  to  factory  inspec- 
tion, where  girls  and  women  are  employed,  shall 
provide  seats  for  the  use  of  the  girls  and  women, 
and  they  shall  be  permitted  the  use  of  such  seats 
when  not  necessarily  engaged  in  their  active 
duties." 

Section  nine  of  the  act  of  1897  is  amended  by  law  of 
1901,  by  changing  the  penalty. 

In  my  opinion  the  amendment  to  section  four  of  the 
act  of  1897  is  in  violation  of  section  13,  Art.  4,  of  the 
Illinois  Constitution  of  1870,  which  provides  that  no 
act  shall  embrace  more  than  one  subject  and  that  shall 
be  expressed  in  the  title.  The  title  of  the  act  in  ques- 
tion being 

' '  An  act  to  regulate  the  employment  of  children . . , " 
etc.,  does  not  refer  in  any  way  to  the  provision  of 
section  four  added  by  the  act  of  1901. 

The  Constitution  (Sec.  13,  Art.  4)  provides,  how- 
ever, that  if  any  subject  shall  be  embraced  in  an  Act 
which  shall  not  be  expressed  in  the  title,  such  act  shall 
be  void  only  as  to  so  much  thereof  as  shall  not  be  so 
expressed.  The  original  of  section  four  therefore 
which  prohibits  the  employment  of  a  child  under  16 
years  of  age  for 

"more  than  sixty  hours  in  any  one  week  or  more 
than  ten  hours  in  any  one  day," 

is  not  affected  by  the  invalidity  of  the  amendment.    In 
my  opinion,  section  four  of  the  act  of  1897  unamended 


44 

as  above  is  within  the  police  power  of  the  state  and  is 
valid  and  constitutional. 


NOTE: — The  employment  of  children  is  now  regulated  by  the  act 
of  May  15,  1903.      (Sess.  Laws  1903,  p.  187.)— Ed. 


THE  FOREIGN   CORPORATION  LAW  OF  COLORADO. 

(American  Soda  Fountain  Co.,  October  8,  1901.) 

I  have  your  favor  of  August  9th,  inclosing  copy  of 
letter  from  the  representatives  of  the  American  Soda 
Fountain  Co.,  together  with  a  copy  of  an  opinion  from 
Messrs.  S.  A.  &  C.  H.  Osborn,  the  local  attorneys  of 
the  Soda  Fountain  Co.  at  Denver,  Colorado,  in  refer- 
ence to  the  Colorado  Foreign  Corporation  law. 

In  an  opinion  rendered  July  20th  to  the  Association, 
in  answer  to  the  inquiry  of  the  Challenge  Machinery 
Co.,  I  stated  that  upon  the  facts  set  forth  in  that  opin- 
ion the  Machinery  Co.  was  not  doing  business  in  Colo- 
rado and  therefore  was  not  subject  to  the  foreign  cor- 
poration law.  The  business  of  the  Machinery  Co.  was 
transacted  by  mail  or  through  the  medium  of  traveling 
salesmen,  and  all  orders  were  shipped  from  Chicago  to 
the  persons  ordering  them. 

Messrs.  Osborn  say  in  their  letter : 

"We  think  Mr.  Mayer  wrote  the  letter,  either 
without  full  knowledge  of  the  construction  placed 
upon  our  incorporation  statutes,  or  without  a  full 
knowledge  of  the  recently  enacted  statute." 
The  position  taken  in  the  opinion  is  sustained  by  the 
following  authorities  among  others : 

Coit  v.  Sutton,  60  N.  W.,  690  (Mich.). 
Wilcox  Cordage  &  Supply  Co.  v.  Moslier,  114 

Mich.,  64. 

Blakeslee  v.  Hilton,  5  Pa.  Sup.  Ct.,  184. 
Davis  v.  Dix,  64  Fed.,  406. 
Havens  v.  Diamond,  93  111.  App.,  537. 
Murphy   Varnish   Co.   v.   Connell,  32  N.   Y. 
Sup.,  492. 


45 

See  also  the  note  to 

French  v.   State    (Tex.),  52  Lawyers'   Rep. 
Ann.,  160. 

I  have  again  examined  the  corporation  law  of  Colo- 
rado of  1901.  It  is  provided  by  section  4  of  that  law, 
that  every  foreign  corporation  failing  to  comply  with 
its  provisions  as  to  the  payment  of  fees,  etc.,  shall  not 
be  allowed  to  prosecute  or  defend  any  suit  in  Colorado. 

In  my  opinion,  this  provision  is  applicable  only  to 
foreign  corporations  " doing  business"  in  Colorado, 
and  does  not  apply  to  every  corporation  which  may 
have  occasion  to  maintain  a  suit  in  Colorado,  as  the 
Messrs.  Osborn  apparently  assume  in  their  letter.  Sec- 
tion 4  of  the  law  of  1901  provides  that  the  fees  required 
by  the  law  shall  be  due  and  payable  at  the  time  the 
articles  of  association  or  charter  of  the  corporation  are 
filed  with  the  Secretary  of  State,  but  the  law  of  1883, 
which  provides  for  the  filing  of  such  articles  of  associa- 
tion or  charter,  is  expressly  confined  to  foreign  cor- 
porations "doing  business"  in  the  state. 

The  law  of  1901,  in  my  opinion,  does  not  undertake 
to  prevent  a  foreign  corporation  engaged  in  inter- 
state commerce,  and  not ' '  doing  business ' '  in  Colorado, 
from  suing  or  defending  in  Colorado.  It  would  be 
unconstitutional  if  it  did  so. 

I  presume  from  the  letter  of  the  Soda  Fountain  Co. 
to  its  Chicago  manager  that  the  business  of  the  com- 
pany in  Colorado  is  transacted  through  the  medium  of 
traveling  salesmen  who  take  orders  in  Colorado,  which 
orders  are  sent  to  the  home  office  for  approval  and 
there  filled. 

I  am,  therefore,  of  the  opinion  that  the  Soda  Foun- 
tain Co.  is  engaged  in  inter-state  commerce  and  can 
enforce  its  collection  in  Colorado  without  a  compliance 
with  the  provisions  of  the  Colorado  law. 


NOTE: — See  note  to  opinion  of  July  11,  1901,  in  answer  to  query 
of  Challenge   Machinery   Co. — Ed. 


46 


IN    REFERENCE    TO    LEGISLATION    TO    REDUCE    THE    NUMBER 
OF  PERSONAL  INJURY  SUITS. 

(Hey wood  Bros.  &  Wakefield  Co.,  January  3,  1902.) 

Answering  yours  oFthe  30th  ult.,  and  the  two  letters 
to  you,  I  reply  that  I  consider  the  suggestions  of  Hey- 
wood  Bros.  &  Wakefield  Co.  as  desirable  and  to  some 
extent  feasible. 

Legislation  could  be  suggested  beneficial  to  manu- 
facturing companies  doing  business  here  and  at  the 
same  time  not  at  all  hostile  or  prejudicial  to  the  rights 
of  any  of  the  community.  I,  however,  know  of  no 
constitutional  legislation  that  could  be  enacted  that 
would  cut  off  the  rights  of  injured  persons  to  sue 
for  damages,  whether  the  claimant's  suit  be  worthy 
or  unworthy.  The  question  necessarily,  under  our 
form  of  government,  can  be  determined  only  in  the 
courts.  To  the  extent  that  legislation  would  attempt 
to  cut  off  the  right  to  sue,  such  legislation  would,  in 
my  opinion,  be  unconstitutional.  Legislation  limiting 
the  amount  that  can  be  recovered  in  case  of  death  to 
$5,000  now  exists  in  this  state.  Legislation  reduc- 
ing that  amount  would  be  legal;  whether  advisable 
from  an  economic  or  business  standpoint  I  am  not 
called  upon  to  consider. 

At  the  present  time  the  Statute  of  Limitations  gov- 
erning suits  for  personal  injuries  is  two  years.  I  think 
that  ought  to  be  reduced  to  one  year  and  possibly  even 
six  months.  Where  one  has  been  injured  there  is  no 
reason  why  his  claim  should  not  be  sued  on,  if  suit  is 
to  be  instituted  at  all,  within  six  months  after  the  cause 
of  action  occurs.  By  waiting  nearly  two  years  before 
instituting  suit,  as  it  is  now  permissible,  the  defen- 
dant runs  great  risk  of  losing  the  means  of  his  defense, 
witnesses  disappear,  etc. 

A  law  which  would  compel  one  who  is  injured,  or 
the  representatives  of  one  who  has  been  killed,  to  file 
notice  of  claim,  say  within  ninety  days,  with  the  one 
who  is  sought  to  be  holden,  would  also  be  an  advan- 
tageous amendment  to  the  law. 


47 

Other  suggestions  occur  to  me  and  doubtless  would 
readily  occur  to  members  of  the  Association.  These 
could  be  thrashed  out  and  put  in  presentable  form  for 
introduction  at  the  next  session  of  the  legislature. 
That  body  does  not  convene  until  a  year  from  now. 
There  is,  therefore,  ample  time  to  digest  the  matter. 
Whether  it  should  be  agitated  at  an  open  meeting  of 
the  Association  is  questionable.  Any  publicity  given 
to  a  matter  of  this  kind  would  be  likely  to  lead  to  or- 
ganized opposition  at  the  hands  of  those  who  derive 
benefit  from  the  right  of  untrammeled  and  unrestricted 
litigation  for  personal  injuries. 


CONSTITUTIONALITY    OF    LAW    IMPOSING   LICENSE    TAX   UPON 
ENTIRE   CAPITAL   STOCK   OF   FOREIGN   CORPORATION. 

(Aermotor  Co.,  January  3,  1902.) 

Your  favor  enclosing  notice  from  the  Secretary  of 
State  of  California  to  the  Aermotor  Company  is  at 
hand. 

You  ask  my  opinion  as  to  the  constitutionality  of 
that  provision  of  the  California  statute,  approved 
March  8th,  1901,  a  copy  of  which  you  enclose,  which 
provides  that  every  foreign  corporation  now  or  here- 
after doing  business  in  the  State  of  California,  shall 
pay  a  license  tax  upon  the  .whole  of  their  capital  stock, 
the  same  as  that  imposed  upon  domestic  corporations. 

The  State  of  California  has  the  right  to  prohibit 
foreign  corporations  not  engaged  in  interstate  com- 
merce from  doing  business  therein.  It  has  the  right 
to  fix  the  terms  upon  which  it  will  permit  foreign  cor- 
porations to  enter  the  state  and  transact  local  busi- 
ness there.  These  terms  may  be  altogether  unreason- 
able, or  even  arbitrary,  provided  they  are  uniform  and 
apply  alike  to  all  foreign  corporations  of  the  same 
class. 

I  have  examined  the  law  in  question,  and,  in  my 
opinion,  it  is  constitutional. 


48 


KATES    FOK    TELEPHONE    SERVICE    OUTSIDE    LIMITS    OF    ORDI- 
NANCE OF  1889. 

(Heroy  &  Marrenner,  January  3,  1902.) 

Messrs.  Heroy  &  Marrenner  have  their  place  of  busi- 
ness at  Chicago  Heights.  This  is  beyond  the  terri- 
torial lines  fixed  by  the  ordinance  of  January  4,  1889, 
within  which  lines  the  rate  for  telephone  service  for 
business  purposes  is  fixed  at  $125  per  year,  and  for 
residence  purposes  at  $100  per  year. 

The  litigation  in  which  it  is  sought,  on  behalf  of 
the  Manufacturers'  Association  and  its  members,  to 
compel  the  Telephone  Company  to  reduce  its  charges 
within  the  territorial  lines  from  $175  to  $125  for  busi- 
ness telephones,  is  still  pending  under  advisement  by 
Judge  Tuley,  before  whom  the  case  was  argued  some 
time  since.1 

Outside  of  the  territorial  lines  above  referred  to, 
the  ordinance  authorizes  the  Telephone  Company  to 
charge  the  amount  above  specified  and  $25  per  mile, 
or  fraction  thereof,  per  annum  extra,  except  where 
the  location  of  the  instrument  is  distant  from  pole 
routes,  in  which  case  the  Company  has  the  right  to 
make  a  proportionate  increase  in  charge.  Chicago 
Heights,  not  being  in  the  City  of  Chicago,  the  rates 
fixed  by  the  ordinance  do  not  apply  to  that  place. 

Messrs.  H.  &  M.  say  that  the  Telephone  Company 
wishes  them  to  change  the  grounded  line  service,  with 
Blake  transmitter,  for  a  copper  metallic  circuit,  for 
which  the  Telephone  Company  would  charge  a  higher 
rate.  If  this  latter  rate  is  unreasonable,  the  courts 
will,  upon  proper  application,  restrict  the  Chicago 
Telephone  Company  to  what  is  a  reasonable  rate.  If 
the  Telephone  Company  is  abolishing  the  use  of  the 
grounded  line  service,  with  Blake  transmitter,  in  my 
opinion  the  courts  will  not  prevent  it  from  doing  so. 

It  is  the  policy  of  the  law  that  public  utility  com- 
panies, like  a  telephone  company,  shall  improve  their 


NOTE:— See  1    111.   C.  C.,  119.— Ed. 


49 

service  by  the  adoption  of  all  reasonable  appliances 
and  apparatus.  The  substitution,  therefore,  by  the 
Telephone  Company,  of  the  metallic  circuit  for  that 
of  the  grounded  line  is  clearly  within  the  policy  of  the 
law.  Having,  however,  established  a  rate  of  charges 
for  the  grounded  line  service,  an  attempt  by  the  Tele- 
phone Company  to  charge  a  higher  rate  for  the  me- 
tallic circuit  when  the  lessee  is  willing  to  continue  the 
use  of  the  grounded  service,  would  furnish  a  case 
where  there  would  be  reasonable  ground  to  apply  to 
the  courts  for  redress,  on  the  theory  that  the  rate  fixed 
by  the  Telephone  Company  itself  will  be  construed 
to  be  at  least  as  high  as  the  Telephone  Company  itself 
deems  proper.  The  further  attempt  by  the  Company 
to  increase  that  rate  for  the  metallic  circuit  would 
tend  to  furnish  a  basis  for  contention  that  the  increased 
rate  is  unreasonable,  even  though  the  Company  con- 
tended that  the  metallic  circuit  was  installed  at  an  in- 
creased expense. 

The  question  is  not  at  all  free  from  doubt  because 
of  the  fact  that  there  is  no  ordinance  or  law  fixing  the 
rates  that  the  Telephone  Company  may  charge  for 
services  between  Chicago  and  Chicago  Heights,  unless 
there  should  be  some  village  ordinance  in  Chicago 
Heights  which,  if  it  be  a  fact,  has  not  been  communi- 
cated to  me. 

On  the  whole  the  case  furnishes  sufficient  facts,  in 
my  opinion,  to  justify  a  proceeding  on  behalf  of 
Messrs.  Heroy  &  Merrenner  to  seek  relief  in  an  ap- 
propriate proceeding.  I  do  not  mean  to  say  that  such 
a  proceeding  will  be  successful,  but  I  think  that  there 
is  a  sufficient  chance  to  justify  the  undertaking.  I 
have  not  been  advised  as  to  what  the  proposed  increase 
in  rate  by  the  Telephone  Company  amounts  to.  That 
would  cut  some  figure  in  arriving  at  the  final  deter- 
mination as  to  whether  a  suit  should  be  instituted. 


50 


BIGHT  OF  BECEIVER  OF  INSOLVENT  FIRE  INSURANCE  COM- 
PANY TO  COLLECT  PREMIUM  WHERE  COMPANY  WAS  NOT 
LICENSED  TO  DO  BUSINESS  IN  ILLINOIS. 

(E.  D.  St.  George  Mfg.  Co.,  January  3,  1902.) 

I  acknowledge  receipt  of  your  favor  enclosing  copy 
of  letter  from  E.  D.  St.  George  Mfg.  Co.  My  opinion 
is  asked  whether  a  mutual  fire  insurance  company,  in- 
corporated under  the  laws  of  Michigan,  which  has 
done  business  in  this  state,  and  has  become  incolvent, 
can  collect  an  assessment  in  the  courts  of  Illinois,  from 
a  policy-holder  who  is  a  citizen  of  Illinois,  when  such 
insurance  company  has  not  complied  with  the  statutes 
of  Illinois  governing  foreign  insurance  companies, 
and  has  not  received  a  certificate  of  authority  from 
the  state  officials,  permitting  it  to  do  business  in  this 
state. 

The  various  statutory  provisions  governing  foreign 
insurance  companies  doing  business  in  this  state  are 
contained  in  chapter  23,  sections  23  et  seq.,  2  Starr  & 
Curtis  Eevised  Statutes  of  Illinois,  pp.  2217-2220. 

I  assume  that  the  insurance  company,  at  the  time  of 
the  issuance  of  the  policy,  was  doing  business  in  Illi- 
nois. 

In  my  opinion,  a  foreign  insurance  company,  doing 
business  in  this  state,  cannot  collect  assessments  in 
the  courts  of  this  state,  or  sue  or  collect  premiums  on 
its  policies,  unless  it  has  first  complied  with  the  law, 
and  is  authorized  to  do  business  in  this  state.  To  this 
effect  see: 

Buell  v.  The  Breeze  Mill  &  Grain  Co.,  65  111. 

App.,  271. 
Cincinnati  Ins.  Co.  v.  Rosenthal,  65  111.,  85. 

If  the  insurance  company  has  complied  with  the  law 
it  (or  its  receiver)  can  sue  and  collect  the  assessment 
in  this  state. 

This  opinion  does  not  apply  to  voluntary  unincorpo- 
rated associations,  or  individual  underwriters. 


51 


THE   ADVANTAGE    OF    INCORPORATING    UNDER    THE    LAWS    OF 
NEW   JERSEY. 

(111.  Mfrs.  Assn.,  January  3,  1902.) 
To  your  communication  repeating  the  question : 

"What  advantage  would  it  be  to  an  Illinois 
company  to  incorporate  under  the  laws  of  New 
Jersey!" 

I  reply  as  follows,  saying  by  way  of  introduction, 
however,  that  to  cover  the  question  fully  and  in  detail 
would  require  almost  the  writing  of  a  pamphlet.  In 
a  general  sense,  however,  the  following  would  be  the 
more  important  of  the  advantages: 

1.  A  corporation  organized  under  the  laws  of  a 
State  other  than  Illinois — in  other  words  a  foreign 
corporation — could  at  all  times  when  the  amount  in 
controversy  exceeded  $2,000,  litigate  in  the  Federal 
Courts  of  this  State.    In  view  of  the  fact  that  juries 
in  the  State  Courts  are  not  orally  instructed,  and  are 
less  subject  to  the  control  and  direction  of  the  judges, 
and  are  more  frequently  prejudiced  against  corpora- 
tion than  are  juries  in  the  Federal  Courts,  the  latter 
forum  is  a  preferable  one  in  which  to  litigate.    Again, 
in  that  forum  broader  equity  jurisdiction  is  asserted 
and    enforced   with   reference    to   the    prevention    of 
strikes,  etc.    So,  also,  in  the  United  States  Courts  the 
defense  authorized  by  the  Illinois  statute  that  the  plain- 
tiff is  a  trust,  etc.,  is  not  permissible.  There  are  several 
other  substantial  reasons,  which  I  do  not  deem  it  neces- 
sary to   enumerate,  in   favor   of  the  United   States 
Courts. 

2.  As  the  statutes  in  this  State  exist  at  present  a 
foreign   corporation,    whether    organized    for    purely 
manufacturing  purposes  or  other  purposes,  is  not  li- 
able to  assessment  upon  its  capital  stock  and  fran- 
chises in  this  State.     True,  if  organized  under  the 
laws  of  New  Jersey  the  corporation  is   required  to 
make  annual  return  to  the  State  Board  of  Assessors 
of  New  Jersey  on  or  before  the  first  Tuesday  in  May 
of  each  year,  and  is  requested  to  pay  thereon  an  an- 


52 

nual  license  fee  or  franchise  tax  of  one-tenth  of  one 
per  cent,  on  all  amounts  of  capital  stock  issued  and 
outstanding  up  to  and  including  $3,000,000;  on  all 
amounts  of  capital  stock  issued  and  outstanding  in  ex- 
cess of  $3,000,000  and  not  exceeding  $5,000,000,  one- 
twentieth  of  one  per  cent.,  and  the  further  sum  of  $50 
per  annum  per  $1,000,000,  or  any  part  thereof,  on  all 
amounts  of  capital  stock  issued  and  outstanding  in 
excess  of  $5,000,000. 

3.  The  laws  of  New  Jersey  permit  corporations  to 
exercise    far    more    extensive    and    altogether    more 
liberal  charter  powers  than  do  the  laws  of  Illinois. 

4.  In  New  Jersey  the  plan  of  organization  is  largely 
left  to  the  incorporators,   who  may   exercise  pretty 
much  an  untrammeled  choice  in  specifying  the  powers, 
objects  and  purposes  with  which  the  corporation  shall 
be  invested.    The  incorporators  also  have  the  right  to 
insert   in   the   charter   provisions    creating,    defining, 
limiting  and  regulating  the  powers  of  the  corporation, 
directors  and  stockholders,  which  cannot  be  done  in 
this  State. 

5.  The  New  Jersey  laws  authorize  the  issuance  of 
various  kinds  and  classes  of  stocks,  common,  preferred, 
first  preferred,  second  preferred,  etc.,  etc.     The  char- 
ter can  distribute  the  voting  power  among  the  various 
classes  of  stock,  giving  to  one  class  greater  powers 
than  to  another  class.     This  is  not  authorized  in  Illi- 
nois. 

6.  In  New  Jersey  the  question  of  the  value  of  prop- 
erty for  which  stock  is  issued  is  conclusive,  and  there 
is  no  liability  upon  the  holders  of  stock  issued  for 
property  purchased,  unless  there  has  been   absolute 
fraud. 

7.  A  New  Jersey  corporation  is  more  readily  dis- 
solved by  voluntary  action  than  is  an  Illinois  corpo- 
ration.   In  the  former  state  a  two-thirds  vote  can  dis- 
solve whether  the  corporation  has  liabilities  or  not, 
and  assets  or  not.     In  Illinois  a  corporation  cannot 
voluntarily  dissolve  itself  by  a  two-thirds  vote  unless 
all  its  liabilities  have  been  paid  and  all  of  its  assets 
have  been  distributed. 


53 

8.  Under  the  New  Jersey  law  the  Board  of  Direc- 
tors can  have  all  of  its  meetings  outside  of  the  State.  In 
Illinois  such  meetings  held  outside  of  the  State  are 
void,  unless  the  meeting  was  authorized  or  the  act  rati- 
fied by  a  two-thirds  vote  of  the  directors. 

9.  As  I  have  indicated,  it  would  require  almost  the 
writing  of  a  treatise  to  point  out  the  difference  be- 
tween the  Illinois  corporation  laws  and  those  of  New 
Jersey.    I  have  confined  these  remarks  to  New  Jersey 
because  the  question  was  directed  on  that  line.    There 
are  other  states  like  New  York,  Maine,  Delaware,  West 
Virginia,  etc.,  nearly  as,  and,  in  some  instances,  even 
more  liberal  in  their  corporation  laws  than  are  those 
of  New  Jersey. 

10.  The  New  Jersey  statutes  make  requirements 
which  may  possibly  be  regarded  as  burdensome.     I 
call  attention  to  only  a  few  of  them.    One  of  the  di- 
rectors must  be  a  resident  of  New  Jersey,  the  Company 
must  have  its  principal  office  in  that  State,  in  that 
office  must  be  kept  the  transfer  books  and  stock  books, 
and  those  books  are  by  law  required  to  be  open  at  all 
times   during  business  hours  to  the  examination  of 
every  stockholder.    An  agent  must  be  designated  for 
service  of  process  in  New  Jersey,  and  the  Company 
must  pay  the  annual  franchise  tax  to  which  I  refer. 
There  are  other  provisions  needless  to  be  pointed  out 
here. 


MEANING  OP  THE  WORDS  AMOUNT  OF  CAPITAL  ACTUALLY 
EMPLOYED"  AS  USED  IN  THE  FOREIGN  CORPORATION  LAW 
OF  PENNSYLVANIA. 

(Oliver  Typewriter  Co.,  January  15,  1902.) 
I  acknowledge  receipt  of  a  copy  of  a  communication 
from  the  Oliver  Typewriter  Co.  to  you,  in  which  it 
asks  the  meaning  of  the  sentence:  "The  amount  of 
their  capital  actually  employed  wholly  within  the 
State  of  Pennsylvania,"  which  appears  in  my  opinion 
of  October  7,  1901,  in  relation  to  the  law  of  Pennsyl- 
vania of  1901,  taxing  foreign  corporations. 


54 

The  term  ' '  capital ' '  as  defined  by  the  authorities 
means  "the  estate  of  the  corporation,  the  property  and 
assets  of  the  corporation,  that  is,  the  sums  paid  in 
by  the  subscribers,  together  with  the  addition  of  all 
gains  or  profits  realized,  or  with  such  diminutions  as 
have  resulted  from  losses  incurred." 

In  my  opinion,  the  intention  of  the  legislature  was 
to  impose  a  tax  upon  the  amount  of  property  (real  or 
personal)  of  the  foreign  corporation  located  or  em- 
ployed wholly  within  the  State  of  Pennsylvania,  that 
is,  upon  the  property  which  the  foreign  corporation 
owns  or  possesses  in  the  State  of  Pennsylvania  for  the 
purposes  of  carrying  on  its  business. 

The  amount  of  the  tax  imposed  is  one-third  of  one 
percentum  upon  the  amount  of  such  property. 


BIGHT  OF  STATE  TO  PREVENT  FOREIGN  CORPORATION  EN- 
GAGED SOLELY  IN  INTERSTATE  COMMERCE  FROM  MAIN- 
TAINING SUIT  AS  PROVIDED  IN  THE  FOREIGN  CORPORA- 
TION LAW  OF  COLORADO. 

(American  Soda  Fountain  Co.,  January  15,  1902.) 
I  acknowledge  receipt  of  certain  additional  corre- 
spondence in  the  matter  of  the  query  of  the  American 
Soda  Fountain  Co.  as  to  the  foreign  corporation  law 
of  Colorado. 

I  am  still  of  the  opinion  that  the  law  does  not  pre- 
vent the  Soda  Fountain  Co.  from  maintaining  a  suit 
in  Colorado  to  collect  any  accounts  due  it.  As  stated 
in  my  letter  of  October  8th,  1901,  and  in  numerous 
other  opinions  rendered  to  your  association,  the  pro- 
vision of  the  Colorado  statute  as  to  the  maintenance 
of  suits,  is  applicable  only  to  corporations  "doing 
business"  in  the  state.  If  it  is  so  construed  as  to  pro- 
hibit corporations  engaged  solely  in  inter-state  com- 
merce, from  instituting  or  defending  suits  in  Colorado, 
it  would  be  a  direct  interference  with  inter-state  com- 
merce, and  therefore,  in  my  opinion,  unconstitutional. 
If  it  is  beyond  the  power  of  the  state  to  declare  in- 
valid contracts  made  by  a  foreign  corporation,  which 


55 

are  transactions  in  inter-state  commerce,  then  the  pre- 
vention of  the  enforcement  of  said  contract  is  equally 
beyond  its  power.  To  permit  this  to  be  done  would 
render  nugatory  the  protection  afforded  by  the  consti- 
tution. 

In  McNaughton  v.  McGirl,  49  Pac.  Rep.,  651  (Mont.), 
the  court  in  speaking  of  the  effect  of  a  state  statute 
upon  a  contract  made  without  the  state  by  a  foreign 
corporation  engaged  in  inter-state  commerce,  said: 

"No  construction  can  be  put  upon  the  statute 
of  Montana  which  would  render  such  a  contract 
void  without  invading  the  exclusive  right  of  Con- 
gress. If,  therefore,  this  contract  sued  on  was 
lawfully  made,  notwithstanding  a  statute  which 
declares  or  attempts  to  declare  it  void,  it  follows 
that  any  legislation  of  the  state  which  seeks  to 
prevent  the  enforcement  of  the  contract  is  equally 
an  invasion  of  the  exclusive  right  of  Congress. 
It  must  be  true  that  if  the  state  cannot  declare  the 
contract  void,  it  cannot  prevent  the  enforcement 
of  the  contract." 
See  also : 

Cooper  Mfg.  v.  Ferguson,   113   U.   S.,   727, 
and  notes  to  same  in  vol.  10  Rose's  notes 
to  the  U.  S.  Reports,  p.  1023. 
Prentice  &  Egan  on  the  Commerce  Clause  of 

the  Constitution,  pp.  177,  195. 
Haldy  v.  Tomoor  Co.,  4  Ohio  Dec.,  118  and 

cases  cited: 

Bateman  v.  Western  Co.,  20  S.  W.,  931  (Tex.), 
and  the  authorities  referred  to  in  my  prior  opinions. 
I  have  carefully  considered  the  views  and  authorities 
of  Messrs.  Osborn  &  Osborn,  in  their  letter  of  Decem- 
ber 4th,  last.  It  is  not  at  all  unlikely  that  the  lower 
courts,  and  possibly  even  the  Supreme  Court  of  Colo- 
rado, may  hold  that  a  corporation  doing  solely  an  in- 
ter-state commerce  business,  so  far  as  Colorado  is  con- 
cerned, will  not 

"be  permitted  to     *     *     *     prosecute  or  defend 

any  suit  in  this  state  until  said  fee  has  been  paid." 

It  is  my  opinion  that  such  rulings,  if  made,  will  not 


56 

be  sustained  by  the  Federal  Courts.  Whether  as  a 
practical  question  it  would  be  cheaper  for  you  to  pay 
the  fee,  is  not  for  me  to  say. 

Answering  the  suggestion  of  the  Colorado  attorneys 
that  the  Soda  Fountain  Company  organize  a  subsidi- 
ary corporation  to  sell  goods  in  Colorado,  the  laws  of 
Illinois  do  not  permit  corporations  organized  under 
its  laws  to  own  or  control  another  corporation  through 
the  ownership  of  its  stock.  There  is  no  legal  objection, 
however,  to  persons  connected  with  or  even  owning  the 
entire  stock  of  the  Illinois  Company,  owning  also  the 
stock  of  a  foreign  corporation. 

NOTE: — See  note  to   opinion   of   July   11,   1901,   to   Challenge  Ma- 
chinery Co. 


EIGHT  OF  CARRIER  TO  EXACT  CAR  SERVICE  OR  DEMURRAGE 
CHARGES,  AND  WHETHER  CARRIER  HAS  LIEN  ON  GOODS 
FOR  THE  SAME. 

(Foley  Mfg.  Co.,  January  30,  1902.) 
"1:     Can  railroad  companies  enforce  the  pay- 
ment of  demurrage  or  car  service  charges  when 
cars  are  not  unloaded  within  a  reasonable  time? 
"2:    Have  the  railroad  companies  a  lien  on  the 
goods    shipped,    for    such   demurrage,    after   the 
freight  has  been  paid  or  tendered!" 
Answering  the  second  question  first,  we  beg  to  ad- 
vise you  that  the  Supreme  Court  of  this  state  has  held 
that  in  the  absence  of  an  express  contract,  a  railroad 
company   has   no   lien   for   demurrage  charges,   and, 
therefore,  is  not  justified  in  refusing  to  deliver  a  ship- 
ment after  freight  thereon  has  been  paid  or  tendered. 
The  Supreme  Court  has  also  held  that  the  mere  adop- 
tion and  publication  by  a  railroad  company  of  rules 
respecting  demurrage  charges  and  knowledge  of  such 
rules,  by  the  shipper,  do  not  make  such  rules  binding 
on  the  shipper,  but  in  order  to  create  a  lien  it  must 
further  appear  that  the  shipper  agreed  to  be  bound 
by  such  rules. 

The  precise  question  as  to  whether  or  not  a  railroad 


57 

can  make  any  charge  at  all,  or  collect  for  demurrage, 
in  the  absence  of  a  contract,  has  not,  so  far  as  we  are 
aware,  ever  been  squarely  passed  upon  by  our  Su- 
preme Court. 

In  the  same  case  in  which  the  Supreme  Court  held 
that  a  railroad  company  is  not  entitled  to  a  lien  for 
the  payment  of  demurrage,  in  the  absence  of  a  con- 
tract, it  is  strongly  intimated  that  a  railroad  company 
cannot  charge  for  demurrage  at  all,  in  the  absence  of 
an  express  contract,  but  it  is  to  be  observed  that  such 
holding  was  not  necessary  to  a  decision  of  the  case. 

In  considering  the  Supreme  Court  opinion,  the  Ap- 
pellate Court  of  the  Third  District  of  this  state  says : 
"As  we  read  the  opinion  in  that  case,  we  under- 
stand it  to  be  the  view  of  our  Supreme  Court  that 
the  right  of  demurrage  does  not  attach  to  carriers 
by  rail;  that  liens  are  only  created  by  law  or  by 
contract  of  the  parties ;  that  when  the  law  gives 
no  lien,  neither  party  can  create  it  without  the 
consent  of  the  other;  and  that  where  a  railroad 
company  has  established  rules  providing  for  de- 
murrage and  published  them  to  the  public,  no  such 
presumption  will  be  indulged  against  a  shipper 
that  he  consented  to  a  charge  for  demurrage  be- 
cause, at  the  time  of  shipment,  he  understood 
what  the  rules  were." 

The  views  expressed  by  the  courts  of  this  state  have 
not,  however  been  generally  recognized  as  correct  by 
the  courts  of  other  states.  The  great  weight 
of  authority  outside  of  this  state  is  to  the 
effect  that  a  railroad  company  has  the  right, 
in  the  absence  of  any  contract,  to  charge  and 
collect  reasonable  demurrage  after  a  reasonable 
opportunity  has  been  given  to  unload,  and  that 
conclusion  is  based  on  strong  reason.  In  view, 
however,  of  the  strong  language  used  by  our  Supreme 
Court  on  this  subject,  it  cannot  be  safely  predicted 
whether  it  will  adhere  to  its  obiter  decision,  or  will 
follow  the  weight  of  authority,  when  the  question  is 
squarely  presented  for  its  determination. 
Whether  the  time  allowed  by  the  companies  for  un- 


58 

loading  (forty-eight  hours)  is,  or  is  not  reasonable, 
will  depend  entirely  upon  the  surrounding  conditions 
and  circumstances,  and  is  a  subject  for  judicial  in- 
quiry. 


NOTE: — But  see  the  later  opinion  of   March   27,   1906,  to   Western 
United  Gas  &  Electric   Co. — Ed. 


LEGALITY  OF  PASSING  DIVIDENDS  ON  CUMULATIVE  PKE- 
FEEBED  STOCK  WHEN  THE  EARNINGS  ARE  SUFFICIENT  TO 
PAY  SAME. 

(Illinois    Manufacturers'    Association,    February    8, 

1902.) 

"Can  a  corporation,  organized  under  the  Illi- 
nois law,  legally  pass  dividends  on  cumulative  pre- 
ferred stock  when  the  earnings  of  the  company 
are  sufficient  to  pay  same?" 

The  statutes  of  Illinois  do  not  provide  for  the  issu- 
ance of  preferred  stock.  If  the  same  exists,  it  is  only 
by  virtue  of  an  agreement  between  the  stockholders 
and  the  company.  Much  will  depend  upon  the  lan- 
guage of  the  by-laws,  of  the  agreement,  and  of  the  pre- 
ferred stock  itself ;  also  upon  the  amount  of  its  indebt- 
edness, net  profits,  condition  of  the  company,  etc.  In 
the  absence  of  such  information,  I  can  only  state  my 
views  generally. 

I  understand  that  the  reason  advanced  by  the  com- 
pany for  not  paying  dividends  is  that  it  wishes  to  pay 
all  floating  debts  before  doing  so,  and  that  certain 
stockholders  who  have  endorsed  the  company's  paper 
wish  to  have  this  paper  first  paid. 

The  preferred  shareholder  is  not  entitled,  as  a  mat- 
ter of  right,  to  his  dividend,  eve^n  though  there  may 
be  net  profits  which  might  be  used  for  that  purpose. 
The  matter  rests  within  the  honest  exercise  of  a 
sound  discretion  on  the  part  of  the  directors.  If 
they  are  reasonable  in  the  exercise  of  that  discretion, 
and  use  the  profits  to  improve  the  corporate  property, 
or  in  paying  its  debts,  the  court  will  not  ordinarily 
interfere. 


59 


THE  FOREIGN   CORPORATION   LAW  OF   MINNESOTA  AND  WHAT 
CONSTITUTES  DOING  BUSINESS  THEREIN. 

(Whiting  Foundry  Equipment  Co.,  March  4,  1902.) 
My  opinion  is  asked  whether  the  company  is  "doing 
business"  in  Minnesota  within  the  meaning  of  the 
foreign  corporation  law  of  that  State.    The  company 
states : 

"We  have  no  office  or  agent  in  that  State,  and 
our  only  business  is  done  through  salesmen,  whom 
we  send  there  for  the  purpose,  or  possibly  at 
times  through  some  resident  of  the  State  who 
works  on  a  commission  basis." 

The  precise  method  of  doing  business  is  not  suf- 
ficiently clear  from  the  above  statement.  If  all  the 
sales  and  contracts  made  in  Minnesota  are  made  sub- 
ject to  the  approval  of  the  home  office  here,  and  the 
orders  are  filled  from  here,  this  would  not  constitute 
"doing  business"  within  the  meaning  of  the  law.  If 
the  corporation  pursues  any  other  method  of  trans- 
acting its  business  in  Minnesota,  I  will,  on  receipt  of 
the  requisite  information,  advise  further. 

Do  its  traveling  salesmen,  in  the  usual  course  of 
business,  carry  the  goods  with  them,  make  sales  and 
deliveries  therefrom,  make  collections  and  give  re- 
ceipts, etc.!  The  Minnesota  law  in  question  contains 
this  express  exemption,  viz. : 

"The  provisions  of  this  Act  shall  not  apply  to 
*  *  *  drummers  or  traveling  salesmen  soliciting 
business  in  this  State  for  corporations  which  are 
entirely  non-residents. ' ' 

CONSTITUTIONALITY    OF    THE    LAW    REQUIRING    BLOWERS    TO 
BE  USED  ON   METAL  POLISHING  MACHINERY. 

(Peru  Plow  &  Wheel  Co.,  March  4,  1902.) 

I  have  your  favor  enclosing  communication  from 

Peru  Plow  and  Wheel  Co.,  in  which  my  opinion  is 

asked  as  to   the  constitutionality  of   an  Act   of  the 

Legislature  of  Illinois,  passed  June  11,  1897  (Session 


60 

Laws  of  1897,  page  250),  entitled  "An  act  to  compel 
the  using  of  blowers  upon  metal  polishing  machinery." 
Section  1  of  that  Act  is  as  follows : 

"That  all  persons,  companies  or  corporations 
operating  any  factory  or  workshop  where  emery 
wheels  or  emery  belts  of  any  description  are 
used,  either  solid  emery,  leather,  leather  covered, 
felt,  canvas,  linen,  paper,  cotton,  or  wheels  or 
belts  rolled  or  coated  with  emery  or  corundum, 
or  cotton  wheels  used  as  buffs,  shall  provide  the 
same  with  blowers,  or  similar  apparatus,  which 
shall  be  placed  over,  beside  or  under  such  wheels 
or  belts  in  such  a  manner  as  to  protect  the  per- 
son or  persons  using  the  same  from  the  particles 
of  dust  produced  and  caused  thereby,  and  to  carry 
away  the  dust  arising  from  or  thrown  off  by  such 
wheels  or  belts  while  in  operation  directly  to  the 
outside  of  the  building  or  to  some  receptacle 
placed  so  as  to  receive  and  confine  such  dust. 
Provided  that  grinding  machines  upon  which 
water  is  used  at  the  point  of  the  grinding  contact 
shall  be  exempt  from  the  provisions  of  this  Act; 
and  Provided,  this  Act  shall  not  apply  to  small 
shops  employing  not  more  than  one  man  in  such 
work." 

The  remaining  sections  contain  provisions  as  to  the 
kind,  character  and  dimensions  of  the  blowers,  and 
provide  that  the  violator  shall  be  guilty  of  a  misde- 
meanor and  punishable  by  a  fine  of  $25  to  $100. 

The  object  of  the  Act  is  to  protect  employes  en- 
gaged in  a  hazardous  employment,  and  is  clearly  with- 
in the  police  power  of  the  State.  Similar  statutes 
have  been  passed  in  other  States,  and  upheld  by  the 
courts.  The  law,  however,  contains  the  following  as 
a  proviso  to  section  one: 

"Provided,  this  Act  shall  not  apply  to  small 
shops  employing  not  more  than  one  man  at 
work." 

The  Act,  therefore,  discriminates  in  favor  of  shops 
and  factories  employing  not  more  than  one  man,  and 
is  partial  or  class  legislation.  Although  the  Legisla- 


61 

ture  has  the  right  to  regulate  dangerous  employments, 
such  regulations  must  be  uniform  and  operate  equally 
upon  all  persons  in  the  same  situation  and  condition. 
If  the  law  attempts  to  classify,  the  classification  must 
have  a  reasonable  basis  and  must  be  suggestive  of  a 
real  difference  between  the  subjects  or  persons  sought 
to  be  classified.  If  the  classification  is  arbitrary  and 
wanting  in  reason,  it  is  a  denial  of  the  equal  protec- 
tion of  the  laws  and  is  a  violation  of  the  14th  Amend- 
ment to  the  Constitution  of  the  United  States. 

The  regulation  of  a  business  which  exempts  from 
its  operation  those  doing  a  certain  amount  of  busi- 
ness, or  the  regulation  of  an  employment  which  ex- 
empts those  employing  a  limited  number  of  men,  there 
being  no  other  reason  why  such  business  or  such  per- 
sons should  be  exempted,  is  class  legislation  and  is 
in  violation  of  the  14th  Amendment. 

The  law  under  consideration  being  for  the  protec- 
tion of  those  persons  engaged  in  a  dangerous  employ- 
ment, no  reason  suggests  itself  in  the  nature  of  the 
employment  why  in  the  case  of  the  employer  of  but 
one  laborer  there  should  be  exemption,  while  the  same 
employer  in  the  same  line  of  business  of  two  laborers 
is  not  exempt.  If  the  law  is  beneficial  in  one  case  it 
is  equally  so  in  the  other.  In  my  opinion,  the  proviso 
ought  and  probably  will  be  held  unconstitutional.  If 
the  proviso  is  unconstitutional,  the  whole  Act  will  fall. 
In  other  words,  if  the  proviso  exempting  the  employer 
of  one  laborer  is  illegal,  the  enforcement  of  the  Act 
as  against  all  employers  (including  employers  of  one 
laborer)  would  be  judicial  legislation  of  a  most  fla- 
grant kind,  and  would  be  extending  the  Act  to  a  class 
expressly  exempted  by  its  very  language.  If  properly 
attacked,  I  believe  the  whole  law  will  be  held  uncon- 
stitutional. 

See: 

Cotting  v.  Goddard,  22  U.  S.  Sup.  Ct.  Eep., 

30.  ' 

State  v.  Haun,  (Kan.)  47  Lawyer's  Rep.  Ann. 
369. 


62 

Union  Sewer  Pipe  Co.  v.  Connelly,  99  Fed., 

354. 

Aff.,  184  U.  S.,  540. 
and  numerous  other  cases  that  could  be  cited. 


THE   FOREIGN    CORPORATION    LAW    OF   MANITOBA   AND    WHAT 
CONSTITUTES  DOING  BUSINESS  THEREIN. 

(Parlin  &  Orendorff  Co.,  March  4,  1902.) 

The  company  asks  whether  it  is  obliged  to  pay  any 
taxes  or  file  its  articles  of  incorporation  in  the  Prov- 
ince of  Manitoba.  The  company  states: 

"Our  business  is  conducted  through  a  transfer 
house,  and  all  contracts  are  made  subject  to  ap- 
proval of  our  company  at  Canton,  Illinois.  We 
keep  a  limited  supply  of  stock  on  hand  at  Winni- 
peg in  the  hands  of  transfer  agents,  sending  them 
through  the  custom  house  on  duplicate  bills  to  our- 
selves, but  we  have  no  warehouse  or  storage  room 
outside  of  what  is  given  by  transfer  agents  for 
necessary  stock  and  on  which  they  charge  us  win- 
ter storage. 

"The  goods  shipped  to  Winnipeg  for  stock  are 
practically  for  distribution,  as  our  shipments  are 
intended  to  cover  the  contract  orders  already  re- 
ceived. ' ' 

The  law  of  Manitoba  governing  foreign  corpora- 
tions, passed  in  1897,  provides  as  follows : 
Section  1  provides  that  any  corporation 
' '  incorporated  under  the  laws  of  *  :     *  the  United 
States  of  America,  *  *  *  may  obtain  a  license  *  * 
to  carry  on  its  business  within  the  Province  of 
Manitoba 
Section  5  provides  as  follows: 

"Before  the  issue  of  a  license  to  any  such  com- 
pany, institution  or  corporation,  the  company,  in- 
stitution or  corporation  shall  file  in  the  office  of 
the  Provincial  Secretary: 

(a)     A  certified  copy  of  the  Act  of  Incorpora- 


63 

tion,   or  other  instrument  of  association  of  the 
company ; 

(b)  An  affidavit  or  statutory  declaration  that  the 
said  company,  institution  or  corporation  is  still 
in  existence,  and  legally  authorized  to  transact 
business  under  its  Act  of  Incorporation,  or  other 
instrument  of  association; 

(c)  A  copy  of  the  last  auditor's  report  upon 
the  finances  of  the  company,  institution  or  cor- 
poration. ' ' 

Section  5  also  provides  for  the  filing  of  a  power  of 
attorney  designating  the  head  office  of  the  company  in 
Manitoba,  and  authorizing  the  agent  to  receive  service 
of  process  in  all  actions  in  respect  of  liabilities  in- 
curred in  the  Province. 

Section  8  provides  for  the  publication  of  the  issu- 
ance of  such  license. 

Section  9  provides  that  no  foreign  corporation,  not 
having  obtained  a  license  under  this  Act,  shall  be  capa- 
ble of  taking,  holding  or  acquiring  any  real  estate 
within  the  Province. 

"or  of  exercising  the  powers  mentioned  in  Sec- 
tion 11  of  this  Act." 
Section  11  provides  as  follows: 

"Such  company,  institution  or  corporation, 
heretofore  or  hereafter  licensed,  may  take  and 
hold  any  mortgages  of  real  estate,  and  any  rail- 
way, municipal  or  other  bonds  of  any  kind  what- 
soever, and  on  the  security  thereof  may  lend  its 
money,  whether  the  bonds  form  a  charge  on  real 
estate  within  the  Province  or  not,  and  may  hold 
such  mortgage  in  its  corporate  name,  and  may 
sell  and  transfer  the  same  at  its  pleasure,  and  in 
all  respects  shall  have  and  enjoy  the  same  powers 
and  privileges  with  regard  to  lending  its  moneys 
and  transacting  its  business  within  the  said 
Province,  as  a  private  individual  might  have  and 
enjoy,  so  far  as  may  be  within  its  corporate  pow- 
ers, and  within  the  competence  of  the  Legislature 
of  Manitoba  to  grant." 


64 

The  law  of  1898  adds  the  following  section : 

"Every  company,  institution  or  corporation 
licensed  under  this  Act,  shall  annually  transmit 
on  or  before  the  fifteenth  day  of  March  in  each 
year,  to  the  Provincial  Secretary,  a  statement 
verified  by  the  oath  of  the  principal  agent  for  the 
Province  of  Manitoba,  setting  forth  the  capital 
stock  of  the  company,  the  amount  of  stock  sub- 
scribed and  the  amount  paid  in  upon  such  stock; 
and  as  to  the  business  of  said  company,  institution 
or  corporation  in  the  Province  of  Manitoba, 
the  amount  invested  in  mortgage,  the  esti- 
mated value  of  real  estate  under  mortgage,  the 
number  of  acres  of  farm  lands  under  mortgage, 
and  such  other  details  as  the  said  Provincial  Sec- 
retary may  require;  and  the  said  statement  shall 
be  made  up  to  the  end  of  the  last  preceding  fiscal 
year  of  the  company's  business.  Every  company 
making  default  in  complying  with  this  section 
shall  incur  a  penalty  of  twenty  dollars  every  day 
during  which  default  continues ;  and  every  Di- 
rector, Manager,  Agent,  or  Secretary  who  shall 
knowingly  and  wilfully  authorize  or  permit  such 
default  shall  incur  the  like  penalty." 
The  Act  of  1900  taxing  foreign  corporations  only 
applies  to  banks,  insurance  companies,  loan  and  trust 
companies,  street  railway,  telegraph,  telephone,  gas, 
electric  light  and  express  companies. 

The  laws  in  question  are  constitutional,  and  have 
been  upheld  by  the  High  Courts  of  Canada.  A  for- 
eign corporation  has  no  absolute  right  to  transact 
business  outside  the  State  of  its  incorporation,  and 
such  right  only  exists  by  the  comity  of  the  foreign 
States.  Such  States,  therefore,  have  the  right  to  im- 
pose whatever  conditions  on  such  foreign  corporations 
they  see  fit  to  impose. 

Whether  or  not  the  Parlin  &  Orendorff  Co.  is  sub- 
ject to  those  laws  presents  a  more  difficult  question. 
What  constitutes  " doing  business"  so  as  to  subject  an 
American  company  to  its  laws,  has  never  been  squarely 
passed  upon  by  the  courts  of  Canada.  Kindred  ques- 


65 

tions,  however,  have  on  several  occasions  come  before 
those  courts. 

In  Murphy  v.  Bridge  Co.,  18  Ont,  Pr.  Reps.,  495 
the  court  said: 

"I  think  that  what  is  meant  by  'a  person  who 
transacts  or  carries  on  any  of  the  business  of,  or 
any  business  for  any  corporation'  is  at  least  some 
person  who  is  an  agent  of  the  corporation  who 
transacts  or  carries  on  here,  or,  manages  or  con- 
tracts for  them  here,  some  part  of  the  business  of 
the  corporation  which  the  corporation  proposes 
to  do,  and  for  which  they  wer,e  incorporated." 
And  in  that  case  it  was  held  that  an  engineer  of  the 
corporation    in    Canada,    engaged   in    constructing    a 
bridge    and    who    also    paid    the    help,    was    not    an 
agent   of   the   corporation   within  the   meaning   of   a 
law  authorizing  service  on  an  agent  who  transacted 
business  for  the  corporation. 

In  City  of  Halifax  v.  Jones,  28  N.  S.  Rep.,  452,  a 
law  which  levied  a  license  tax  on  every  foreign  corpo- 
ration "doing  business"  in  the  Province  came  before 
the  Supreme  Court  of  Nova  Scotia.  The  defendants 
were  merchants  doing  business  in  Halifax  and  owned 
no  real  or  personal  property  there.  They  were  agents 
of  the  Miss.  &  Dominion  S.  S.  Co.,  an  English  corpo- 
ration, not  incorporated  in  Nova  Scotia  and  having 
its  head  office  in  Liverpool,  Or.  B.  The  business  carried 
on  by  the  company  in  Halifax,  through  their  agents, 
was  of  a  continuous  character,  selling  tickets,  receiv- 
ing freight,  money,  etc.  The  agents  received  a  com- 
mission on  sales.  It  was  held  that  the  company  did 
business  at  Halifax  and  was  liable  for  the  tax. 

In  La  Bourgogne,  Opp.  Cas.,  1899,  P.  431,  it  was  held 
that  a  foreign  steamship  company,  having  an  office  in 
London  in  charge  of  an  agent  who  made  freight  and 
passenger  contracts,  paid  dues  and  forwarded  and  de- 
livered goods  carried  by  the  company,  could  be  sued  in 
England  by  service  upon  such  agent. 

In  Macdougal  v.  Schofield  Woolen  Co.,  16  Que.  S. 
C.,  411,  it  was  held  that  a  person  who  sells  goods  on 
commission  for  a  foreign  company,  and  who  keeps 


66 

samples  in  his  office  or  takes  them  to  customers  from 
whom  he  gets  orders,  which  are  filled  by  the  company, 
which  sends  the  goods  directly  to  the  customers,  is  not 
an  agent  of  the  company  so  as  to  authorize  service 
upon  him  of  an  action  against  the  company. 

The  statement  in  the  company's  letter  as  to  their 
method  of  doing  business  in  Manitoba  is  not  quite 
clear.  Has  the  company  a  representative  in  Mani- 
toba and  what  is  the  scope  of  his  authority?  Does  he 
sell  goods  or  make  contracts  for  the  company?  Are 
sales  made  directly  from  the  "stock"  stored  in  Man- 
itoba? Are  goods  ordered  in  Manitoba  shipped  di- 
rect to  parties  ordering  same?  What  is  meant  by  the 
statement  that  the  stock  in  Winnipeg  is  "practically 
for  distribution  as  our  shipments  are  intended  to 
cover  the  contract  orders  already  received?"  Orders 
received  where  and  by  whom?  Does  the  company 
maintain  an  office  in  Manitoba  and  does  its  name  ap- 
pear thereon? 

With  this  additional  information  at  hand  a  more 
definite  conclusion  can  be  expressed. 


THE  FOREIGN   CORPORATION  LAW  OF   MANITOBA. 

(Parlin  &  Orendorff  Co.,  March  8,  1902.) 
I  have  your  favor  enclosing  copy  of  letter  from  Par- 
lin &   Orendorff  Co.   containing  additional  informa- 
tion as  to  their  method  of  doing  business  in  Manitoba. 
The  company  states : 

' '  We  have  no  general  agents  in  Manitoba. 
First:  Our  sales  are  all  made  through  a  firm 
of  jobbers  who  sell  on  a  percentage  basis,  sub- 
mitting all  contracts  to  our  company  at  Canton, 
111.,  and  such  agents  are  absolutely  without  au- 
thority to  accept  any  contracts,  but  only  arrange 
terms,  and  submit  them  to  us  for  approval  and  ac- 
ceptance. 

Second:     Sales  are  not  made  direct  from  the 
stock  stored  in  Manitoba. 
Third:      Goods    ordered   in    Manitoba,    or    or- 


67 

dered  from  Canton,  and  either  shipped  direct  from 
Canton  or  to  Winnipeg,  to  be  distributed. 

Fourth:  'Stock  in  Winnipeg  practically  for 
distribution,  as  our  shipments  are  intended  to 
cover  contract  orders  already  received.'  These 
orders  as  above  stated  are  only  accepted  in  Can- 
ton, 111.,  by  our  company. 

We  keep  a  limited  stock  in  hands  of  transfer 
agents  at  Winnipeg,  to  be  shipped  on  second  or- 
ders, under  the  terms  of  contracts  which  have 
been  received  and  accepted  at  Canton,  Illinois, 
allowing  the  transfer  agents  to  fill  such  second  or- 
ders, which  we   specifically  provided  for  in  the 
original  contract  accepted  in  Illinois.     Our  com- 
pany does  not  maintain  an  office  in  Winnipeg. ' ' 
As  I  stated  in  my  previous  opinion,  the  question  as 
to    what    constitutes    "doing    business"    within    the 
meaning   of   the   law   of   Manitoba,   has   never   been 
squarely  passed  upon  by  the  courts  of  Canada.  Under 
the  decisions  of  the  American  courts  the  method  of 
transacting  business  pursued  by  the  Parlin  &  Oren- 
dorff   Co.   would  constitute   "inter-state   commerce," 
and  would  not  subject  that  company  to  the  operation 
of  the  foreign  corporation  laws  of  the  various  states. 
These  decisions,  however,  are  based  on  that  clause  of 
the  Constitution  which  gives  to  Congress  the  exclusive 
power  to  regulate  commerce  between  the  States,  and 
does  not,  therefore,  extend  to  Canada. 

There  is  no  such  inter-state  commerce  statute  or 
line  of  decisions  in  Canada.  While  the  question  is  in- 
volved in  some  doubt,  I  am  inclined  to  the  opinion 
that  the  Parlin  &  Orendorff  Co.  is  not  "doing  busi- 
ness" in  Manitoba  within  the  meaning  of  the  foreign 
corporation  law  of  that  Province.  If  this  company  did 
not  send  a  supply  to  Winnipeg  quarters,  from  which 
occasional  distribution  is  made,  I  would  entertain  a 
more  positive  opinion  that  compliance  with  the  law  in 
question  is  not  necessary.  As  a  practical  question, 
however,  much  depends  upon  how  much  business  the 
company  actually  does  in  that  Province.  Compliance 
with  the  law  does  not  require  the  payment  of  any 


68 

license  fee  or  tax.  If,  therefore,  the  company  does  a 
comparatively  large  business  in  Manitoba,  rather  than 
run  any  chance  in  enforcing  its  obligations  and  being 
compelled  to  stand  the  cost  of  litigating  the  question, 
it  will  be  the  course  of  prudence,  I  think,  to  comply 
with  the  law — otherwise  not. 


THE  FOREIGN  COEPOEATION  LAW  OF  MINNESOTA  AND  EF- 
FECT OF  SUBSEQUENT  COMPLIANCE  WITH  THE  LAW  ON 
EIGHT  TO  MAINTAIN  SUIT. 

(Acme  Harvester  Co.,  March  14, 1902.) 
"Bef erring  to  the  Foreign  Corporation  Law  of 
Minnesota,  passed  in  1889,  will  you  kindly  inform 
us  what  position  we  are  in  to  maintain  suit  on 
contracts  made  since  the  passage  of  this  law,  and 
prior  to  date  of  filing  incorporation  papers  and 
complying  with  said  law?  We  have  recently  filed 
our  papers  in  that  State,  and  would  like  to  know 
if  it  will  be  necessary  to  re-write  contracts  prior 
to  that  time." 

The  question  asked  is  one  upon  which  there  is  a 
conflict  of  authority.  The  weight  of  authority,  how- 
ever, is  to  the  effect  that  a  subsequent  compliance 
with  the  law,  which  imposes  conditions  upon  the  right 
of  a  foreign  corporation  to  do  business  or  to  main- 
tain a  suit,  will  enable  such  corporation  to  maintain  a 
suit  on  contracts  entered  into  before  such  compliance, 
unless  such  contracts  are  expressly  declared  to  be 
void  by  statute.  The  Minnesota  statute  has  no  such 
provision.  I  am,  therefore,  of  the  opinion  that  the 
Acme  Company  can  maintain  suit  on  contracts  made 
in  Minnesota  prior  to  its  compliance  with  the  law. 


NOTE: — See  contrary  opinion  on  same  subject  under  date  May  14, 
1902.— Ed. 


69 


THE  EIGHT  OF  A  RAILROAD  COMPANY  TO  DISCRIMINATE  IN 
ENFORCING  CAR  SERVICE  CHARGES  AND  THE  REASONABLE- 
NESS OF  THE  48  HOUR  RULE. 

(Monmouth  Mining  &  Mfg.  Co.,  April  12,  1902.) 

"We  thank  you  for  the  copy  of  the  opinion  in 
regard  to  the  car  service  proposition,  but  as  this 
does  not  cover  all  the  points  in  question,  we  would 
be  very  glad  to  have  Mr.  Mayer  look  into  this 
further  and  cover  the  matter  more  fully.    We  find 
there  are  a  number  of  points  on  the  Burlington 
system,  for  instance,  where  this  car  service  rule 
is  not  in  effect;  and  can  they  enforce  this  rule  in 
our  place  and  not  all?     And  think  further  that 
this  arrangement  is  a  hardship  on  large  manu- 
facturers, as  they  are  compelled  to  unload  cars 
inside  of  what  the  By.  Co.  call  48  hours,  while 
under  the  labor  union  rules  of  this  state  there  are 
only  16  hours  actual  working  time." 
The  first  question,  viz :  As  to  the  right  of  a  railroad 
company  to  enforce  car  service  charges  at  one  place, 
which  it  does  not  enforce  at  other  places — it  is  im- 
possible on  the  facts  stated  to  answer  categorically. 
A  railroad  company  cannot  discriminate  with  respect 
to  charges  or  facilities  between  persons  and  localities 
where  the  conditions  and  circumstances  are  similar; 
but  what  constitutes  discrimination  is  a  relative  ques- 
tion which  depends  on  the  facts  and  circumstances  in 
each  case.    Conditions  may  exist  in  one  locality  which 
are  absent  in  another,  which  would  justify  a  difference 
in  respect  to  facilities  or  charges. 

The  second  question,  as  to  the  reasonableness  of  the 
48  hour  rule,  can  only  be  determined  from  all  the  facts 
and  circumstances.  As  a  matter  of  law,  48  hours  is 
not  unreasonable.  If  the  rule  allows  sufficient  time  to 
unload  in  ordinary  cases,  without  reference  to  any 
rare  or  exceptional  circumstances  incident  to  a  par- 
ticular shipper  at  some  particular  time  and  without 
reference  to  an  unfavorable  condition  of  the  weather, 
its  validity  will  probably  be  upheld  by  the  courts  of 


70 

the  state.    Similar  rules  have  been  held  by  the  courts 
of  other  states  to  be  reasonable  as  to  time. 

VALIDITY   OF   SERVICE   OF   PROCESS   ON   CUSTOMER  OF   CORPO- 
RATION  IN    THE    STATE   OF    KENTUCKY. 

(Parlin  &  Orendorff  Co.,  April  12,  1902.) 

"As  members  of  the  Illinois  Manufacturers' 
Association,  we  submit  a  statement  of  a  suit  com- 
menced by  the  Commonwealth  of  Kentucky  in 
Todd  County  Circuit  Court.  Under  the  state  cor- 
poration laws  we  were  recently  permitted  to  re- 
cover a  stock  of  merchandise  from  trustee  in  bank- 
ruptcy in  Federal  District  Court  covering  Todd 
County.  Said  Court  held  that  the  question  of 
ownership  came  under  the  jurisdiction  of  the  State 
Court,  and  the  Circuit  Judge  of  Todd  County 
held  our  contract  to  be  binding  and  issued  an  order 
in  our  favor  upon  the  trustee  for  the  surrender  of 
the  goods. 

"As  it  happened  that  this  stock  of  goods  rep- 
resented almost  the  entire  assets  of  bankrupt, 
other  creditors  were  dissatisfied. 

"We  are  not  doing  business  within  the  State 
of  Kentucky,  maintaining  no  office  or  warehouses, 
and  acceptance  of  all  contracts  and  statements  is 
made  either  at  St.  Louis,  Missouri,  or  Canton,  Illi- 
nois. 

"The  attorney  of  the  Commonwealth  got  his 
service  on  us  through  a  customer  in  Todd  County, 
holding  that  customers  are  legal  agents,  and  yet 
the  law  under  which  the  suit  is  drawn  demands 
that  we  must  appoint  a  legal  agent  upon  whom 
service  may  be  obtained.  Our  St.  Louis  manager 
advises  us  that  he  has  decided  to  file  a  motion  to 
quash  the  summons,  on  the  grounds  that  we  have 
no  legal  agent  in  the  State  and  that  we  are  not 
doing  business  within  the  State  of  Kentucky,  and 
are  not,  therefore,  amenable  to  their  corporation 
laws. 

"We  bring  this  matter  to  your  attention,  as 


71 

the  record  of  such  suits  may  be  of  interest  to 
other  members  of  the  Association.  If  you  have 
any  suggestions  to  offer,  we  will  be  glad  to  hear 
from  you. ' ' 

I  do  not  understand  that  the  Parlin  &  Orendorff  Co. 
desire  any  particular  question  answered.  If  the  facts 
are  as  stated,  the  company  is  not  doing  business  in 
Kentucky,  and  is  not,  therefore,  required  to  appoint 
an  agent  upon  whom  process  can  be  served  in  actions 
arising  in  Kentucky. 

The  service  upon  a  customer  of  the  company,  he  not 
being  its  agent  and  not  transacting  any  business  for 
it,  or  holding  himself  out  as  its  agent,  is  not  valid  ser- 
vice, and,  on  proper  motion  being  made,  it  should  be 
quashed. 

I  am  not  sufficiently  acquainted  with  the  nature  of 
the  suit  to  be  able  to  make  any  suggestion  other  than 
this:  If  the  case  is  of  a  character  that  permits  it,  I 
would  deem  it  advisable  to  attempt  to  remove  it  to  the 
Federal  Court.  The  petition  and  bond  for  removal 
must  be  filed  on  or  before  the  time  fixed  by  the  Ken- 
tucky law  for  the  defendant  to  plead.  The  motion  to 
quash  can,  I  think,  be  more  advantageously  made  and 
disposed  of  in  the  U.  S.  Court. 

LIABILITY   OF   EMPLOYES   FOR  DAMAGES    CAUSED   BY   THE    AC- 
TION OF  A  LABOR  UNION. 

(George  H.  Benedict  &  Co.,  April  12,  1902.) 
"We  are  desirous  of  ascertaining  whether  it  has 
ever  been  determined  in  this  state  whether  there 
is  any  responsibility  attached  to  a  labor  union 
in  an  action  for  damages.  Our  reason  for  making 
the  inquiry  is  that  recently  we  received  an  order 
for  a  considerable  amount  of  work  from  a  con- 
cern out  of  town,  who,  by  the  way,  are  in  the  same 
line  of  business  as  ourselves,  and  whose  workmen 
were  on  a  strike.  Our  people  discovered  when  the 
work  was  partly  completed  that  it  was  from  the 
concern  aforesaid  and  refused  to  finish  the  work. 
As  a  consequence  we  are  out  the  cost  of  the  mate- 


72 

rial  and  labor  involved  up  to  that  point,  to  say 
nothing  of  whatever  damage  there  may  have  been 
to  our  business  by  their  action.  From  this  infor- 
mation you  will  see  that  the  affair  is  not  of  the 
kind  that  ordinarily  creates  trouble  with  the  labor 
unions,  and  it  is  our  desire  to  know  whether  a  non- 
incorporated  union  can  be  made  responsible  in  an 
action  for  damages." 

I  understand  further  that  the  Company  has  no  con- 
troversy whatever  with  its  employes  as  to  their  wages 
or  otherwise;  that  the  representatives  of  the  union 
directed  the  employes  of  the  Company  to  quit  doing 
the  particular  work  heretofore  mentioned ;  which  direc- 
tion was  communicated  to  the  Company  through  its 
foreman;  that  the  union  has  no  grievance  whatever 
against  the  Company ;  that  its  only  reason  for  causing 
the  stoppage  of  the  work  aforesaid  is  to  injure  the  con- 
cern engaged  in  the  same  line  of  business,  who  for- 
warded the  work  to  the  Company  and  whose  employes 
were  then  on  a  strike;  that  the  action  of  the  union 
caused  the  Company  to  abandon  its  contract  to  its 
damage. 

Employes  engaged  in  a  particular  business  have  the 
undoubted  right  to  organize  into  a  labor  union  and  to 
do  all  lawful  acts  by  lawful  means  to  advance  their 
trade  interests.  They  have  the  right  to  quit  work 
in  a  body  to  peaceably  compel  an  advance  in  their 
wages.  If  an  employer  is  damaged  by  such  conduct  no 
action  will  lie.  The  members  of  a  union  have  no  right, 
however,  to  use  threats  or  coercion  to  destroy  or 
injure  a  man's  business  or  to  dictate  to  him  how  he 
should  conduct  the  same. 

In  this  case  the  Benedict  Company  had  no  quarrel 
with  its  employes.  They  were  satisfied  with  their  em- 
ployment and  the  rate  of  wages  paid  them.  The  action 
of  the  union  was  not  for  the  purpose  of  benefiting 
the  employes  of  the  Company,  but  for  the  purpose  of 
injuring  another  concern,  in  the  same  line  of  business, 
engaged  in  a  controversy  with  its  employes.  All  the 
employes  had  the  right  to  quit  work,  but  they  had  no 
right  to  combine  in  order  to  compel  their  employer  to 


73 

withdraw  from  a  mutually  profitable  relation  with  a 
third  person  for  the  purpose  of  injuring  that  third 
person,  when  the  relation  sought  to  be  broken  had 
no  effect  whatever  on  the  character  or  reward  of  their 
services.  The  action  of  the  union  was  in  effect  a  boy- 
cott and  constituted  an  unlawful  conspiracy.  While 
the  questions  involved  are  not  entirely  free  from  doubt, 
I  entertain  the  opinion  that  the  members  of  the  union 
would  probably  be  held  liable  to  the  Benedict  Com- 
pany for  the  damages  caused  by  the  action  of  the 
union  in  instructing  the  employes  to  stop  the  doing  of 
the  work  in  question.  Some  cases  very  much  in  point 
are: 

Thomas  v.  Cincinnati,  etc.,  Ry.  Co.,  62  Fed., 
803; 

Moore  v.  Bricklayers'  Union,  23  Week.  Gin., 
L.  B.,  48; 

Temperton  v.  Russell,  1  Q.  B.,  715  (1893) ; 

Cowenv.  Rutherford,  106  Mass.,  1; 

Toledo,  etc.  Ry.  Co.  v.  Penn.  Co.,  54  Fed., 
730; 

8.  S.  Co.  v.  McKenna,  30  Fed.,  48. 
In  arriving  at  this  conclusion,  I  have  not  overlooked 
the  case  of  Allen  v.  Flood,  Appeal  Case  (House  of 
Lords)  for  the  year  1898,  page  1,  whose  doctrine  is 
explained,  if  not  entrenched  upon,  in  the  subsequent 
case  of  Quinn  v.  Leathern,  Appeal  Cases  (House  of 
Lords)  1901,  page  495. 


THE  FOREIGN  CORPORATION  LAW  OF  NEW  JEKSEY  AND  WHAT 
CONSTITUTES  DOING  BUSINESS  THEREIN. 

(Inland  Steel  Co.,  April  17,  1902.) 
"We  sell  steel  to  New  Jersey  concerns  either 
by  correspondence  or  by  means  of  a  visiting  sales- 
man. We  carry  no  stock  of  goods  in  New  Jersey 
and  have  no  resident  representative  or  salesman. 
Under  these  conditions  are  we  to  be  considered  as 
doing  business  in  New  Jersey,  and  are  we  liable 
for  the  state  fee  for  filing  statement,  and  a  fee  each 


74 

year  for  filing  our  annual  report?     And  are  we 
required  to  designate  a  local  (or  state)  agent?" 
We  assume  that  the  orders  taken  by  the  traveling 
salesman  in  New  Jersey  are  taken  subject  to  the  ap- 
proval of  the  home  office.    If  this  assumption  is  cor- 
rect, I  am  of  the  opinion,  on  the  facts  stated,  that  the 
Company  is  not  ' l  doing  business ' '  in  New  Jersey,  and 
is  therefore  not  required  to  comply  with  the  foreign 
corporation  law. 

RIGHT  OF  A  COMPANY  TO   HAVE  ITS  NAME  COPYRIGHTED  OR 
TO  PROTECT  ITS  NAME  WHERE  IT  IS  NOT  INCORPORATED. 

(Western  Salvage  Wrecking  Agency,  May  13,  1902.) 
"We,  a  copartnership,  have  done  business  for 
the  past  eighteen  years  under  the  style  of  'West- 
ern Salvage  Wrecking  Agency, '  and  now  find  other 
concerns  are  using  our  style  with  slight  modifica- 
tion. Would  kindly  like  to  know  whether  it  is 
possible  to  'copyright'  or  go  through  other  form 
to  secure  to  us  the  continued  and  exclusive  title 
without  incorporating  and  to  prevent  others  from 
its  use  in  modified  form  without  injunction  pro- 
ceedings. ' ' 

The  facts  set  out  in  the  foregoing  communication  are 
not  sufficient  to  form  the  basis  of  a  definite  legal  opin- 
ion. There  are  many  considerations  affecting  the  right 
to  the  exclusive  use  of  a  trade  mark  or  trade  name, 
such  as  the  length  of  the  user,  whether  or  not  the  user 
has  been  exclusive,  the  business  in  connection  with 
which  the  trade  name  or  trade  mark  has  been  used, 
the  similarity  of  the  alleged  infringement,  etc.  A 
few  suggestions  may,  however,  answer  the  query  of 
the  Salvage  Company. 

In  the  first  place  no  relief  can  be  granted  unless  re- 
sort be  had  to  the  machinery  of  the  courts.  Secondly, 
there  is  no  process  by  which  the  name  can  be  the  sub- 
ject of  a  "Copyright."  There  is  a  Federal  Statute 
providing  for  the  registration  of  trade-marks  or  trade 
names,  but  this  statute  does  not  have  the  effect  of 
creating  a  trade  mark  or  trade  name  not  otherwise 


75 

valid.  The  registry  is  merely  prima  facie  evidence 
of  the  right  to  the  exclusive  use  of  the  trade-mark  or 
trade  name,  and  the  burden  is  thrown  on  those  who 
deny  the  right  to  disprove  the  same. 

There  is  another  consideration  which  may  arise.  The 
name  "Western  Salvage  Wrecking  Agency"  implies 
that  the  user  is  a  corporation.  In  this  state  the  use  of 
a  corporate  name  by  a  party  not  incorporated  is  a 
misrepresentation,  which  would  debar  that  party  from 
maintaining  a  suit  to  establish  a  right  to  the  exclusive 
use  of  such  corporate  name.  (Clark  v.  Aetna  Iron 
Works,  44  111.  App.,  510.)  The  last  objection  can  be 
obviated  by  incorporating.  If  there  is  any  other  point 
which  the  Salvage  Agency  desires  answered,  please  ad- 
vise me. 

THE  RIGHT  OF  A  TELEPHONE  SUBSCRIBER  TO  RECOVER  BACK 
AMOUNTS  PAID  IN  EXCESS  WHEN  PAID  WITHOUT  PRO- 
TEST. 

(Hibbard,  Spencer,  Bartlett  &  Co.,  May  13.  1902.) 

' '  In  connection  with  the  telephone  litigation  may 
we  inquire  whether  in  the  event  your  suit  is  suc- 
cessful, those  who  in  the  meantime  have  paid  tele- 
phone charges  at  the  rate  of  $175  per  annum,  with- 
out protest,  will  be  in  a  position  to  recover  the  ex- 
cessive amounts  so  paid?  Or  will  the  failure  of 
the  telephone  user  to  protest  when  he  pays  at 
the  rate  of  $175  per  annum  debar  him  from  after- 
wards attempting  to  recover  the  excessive 
amounts  ? ' ' 

As  a  general  rule,  voluntary  payments  cannot  be 
recovered  back.  Where,  however,  the  excessive  pay- 
ment is  demanded  by  and  made  to  a  public  utility  com- 
pany, such  as  a  common,  carrier,  gas,  water  or  tele- 
phone company,  such  company  having  the  power  to 
compel  obedience  to  its  requirements  by  a  refusal  to 
supply  the  facilities  which  are  necessary  to  a  proper 
conduct  of  business,  I  am  of  the  opinion  that  the  pay- 
ments cannot  be  considered  as  voluntary  and  an  action 
will  lie  to  recover  back  the  excessive  charges  so  paid. 


76 

Judge  Tuley  in  his  recent  decision  in  the  telephone 

case  held  as  follows : 

"When  a  subscriber  cannot  obtain  satisfactory 
service  except  by  entering  into  a  contract  by  which 
he  agrees  to  pay  a  greater  rate  than  that  fixed  by 
the  ordinance,  the  rate  agreed  to  be  paid,  so  far  as 
it  is  in  excess  of  the  rate  prescribed  by  the  ordi- 
nance, must  be  held  to  be  an  illegal  exaction,  and 
not  only  illegal  but  forced,  a  forced  agreement 
by  the  company  exacted  of  the  subscriber,  and  not 
a  voluntary  contract  which  would  stop  him  from 
disputing  the  same." 
There  are  some  apparently  conflicting  decisions  in 

some  of  the  states,  but  the  great  weight  of  authority  is 

to  the  effect  that  such  payments  when  compulsorily 

made  can  be  recovered  back. 


NOTE:— See  note  in  1  111.  C.  C.,  144,  579.— Ed. 

THE  FOREIGN   CORPORATION  LAW  OF  TENNESSEE  AND  WHAT 
CONSTITUTES   DOING   BUSINESS   THEREIN. 

(Union  Special  Sewing  Machine  Co.,  May  13,  1902.) 
"Enclosed  herewith  you  will  find  a  letter  from 
the  Controller  of  the  State  of  Tennessee,  which  ex- 
plains itself.  The  only  business  that  we  do  in 
the  state  is  through  the  medium  of  our  traveling 
salesmen  who  are  not  residents  of  the  state  of 
Tennessee,  but  make  occasional  trips  into  the  state 
for  the  purpose  of  selling  machines  to  manufac- 
turers and  not  to  dealers.  The  goods  are  billed 
from  our  office  here  and  the  collections  made  from 
this  point.  Our  salesmen  do  not  deliver  the  goods, 
but  only  solicit  orders  for  the  same  and  the  ship- 
ments are  made  from  here.  We  would  be  glad 
to  have  you  advise  us  if  we  are  subject  to  the  tax 
of  $200  mentioned  in  the  Controller's  letter.  It 
would  seem  to  us  that  we  were  simply  engaged 
in  interstate  commerce  which  their  law  exempts. ' ' 
The  letter  referred  to  is  a  demand  on  the  Union 

Company  that  it  pay  to  the  Controller  the  $200  privi- 


77 

lege  tax  levied  on  all  companies  selling  machines  in 
the  state. 

I  am  of  the  opinion  on  the  facts  stated  that  the 
business  transacted  by  the  Union  Company  constitutes 
interstate  commerce  and  that  it  is,  therefore,  not  obli- 
gated to  comply  with  the  law  in  question. 

There  are  other  provisions  of  the  law  which  raise 
doubt  as  to  its  constitutionality,  but  as  the  Sewing  Ma- 
chine Company  is  not  interested  if  the  law  in  question 
does  not  apply  to  it,  I  abstain  from  further  comment. 

THE  FOREIGN  CORPORATION  LAW  OF  MINNESOTA  AND  EF- 
FECT OF  SUBSEQUENT  COMPLIANCE  THEREWITH  ON  RIGHT 
TO  MAINTAIN  SUIT. 

(Acme  Harvester  Co.,  May  14,  1902.) 

Sometime  since,  in  answer  to  the  query  of  the  Acme 
Harvester  Company  as  to  the  effect  of  a  compliance 
with  the  foreign  corporation  law  of  Minnesota  upon 
contracts  made  in  that  state,  before  such  compliance 
by  a  corporation  doing  business  therein  at  the  time  of 
making  such  contract,  I  advised  that  the  weight  of 
authority  was  to  the  effect  that  such  subsequent  com- 
pliance with  such  a  law  would  enable  the  corporation 
to  maintain  a  suit  in  that  state  on  contracts  made 
therein,  before  such  compliance. 

The  Supreme  Court  of  Minnesota  has,  however,  now 
decided  that  contracts  made  in  that  state  by  a  foreign 
corporation  doing  business  therein  at  the  time  before 
compliance  with  the  law  of  Minnesota,  are  void  in  Min- 
nesota, and  that  no  subsequent  compliance  with  such 
law  would  make  them  valid,  and  that  therefore  no 
action  can  be  maintained  in  Minnesota  there- 
on. 

See :    Heilman  v.  Peimesisl,  88  N.  W.,  441. 

The  decision  rendered  is,  in  my  opinion,  against  the 
weight  of  authority,  and  the  cases  cited  by  the  court 
in  its  support  do  not  fully  sustain  its  conclusion. 

The  decision,  however,  is  the  present  law  of  Minne- 
sota, and  the  members  of  your  association  should  gov- 
ern themselves  accordingly. 


78 


POWER    OF    TRAVELING    SALESMEN    TO    BIND    HIS    EMPLOYER 
ON  CONTRACT  MADE  BY  HIM  IN  FOREIGN  STATE. 

(J.  W.  Sefton  Mfg.  Co.,  June  7,  1902.) 
1 '  We  beg  to  acknowledge  receipt  of  Mr.  Mayer 's 
opinion  relative  to  foreign  corporation  laws   of 
New  Jersey. 

"  Noting  particularly  the  opinion  relative  to  the 
laws  of  New  Jersey  in  which  he  says :  '  We  as- 
sume that  the  orders  taken  by  traveling  salesmen 
in  New  Jersey  are  taken  subject  to  approval  of 
the  home  office. '  We  would  ask  whether  or  not  it 
is  necessary  to  have  this  understood  with  the  cus- 
tomer at  the  time  the  order  is  taken,  or  whether  it 
is  generally  understood  that  any  orders  taken 
by  traveling  salesmen  in  the  different  states  on 
the  ordinary  order  blanks  which  are  being  used, 
are  always  subject  to  the  approval  of  the  home 
office,  or  is  the  house  holden  for  the  action  of  the 
salesman  as  a  representative,  unless  specifically 
provided  for  by  an  entry  on  the  order  at  the  time 
it  is  taken,  relative  to  its  being  subject  to  ap- 
proval. ' ' 

I  do  not  know  whether  or  not  there  is  any  custom  of 
the  trade  under  which  it  is  understood  that  all  orders 
received  are  taken  subject  to  the  approval  of  the  home 
office.  The  question  whether  or  not  an  agent  can,  in 
the  absence  of  such  custom,  make  a  contract  which  is 
binding  on  the  principal  without  his  approval,  depends 
upon  the  circumstances  of  each  case.  The  principal 
is  bound  by  all  acts  within  the  apparent  scope  of  the 
agent 's  authority.  If  in  the  course  of  dealing  the  cus- 
tomers acquire  knowledge  as  to  the  extent  of  the 
agent's  authority,  the  customer  cannot  hold  the  prin- 
cipal liable  for  the  acts  of  the  agent  in  excess  of  his 
authority.  All  difficulties  will  be  avoided,  however, 
by  writing  on  the  order  blanks  the  following:  "All 
orders  taken  subject  to  the  approval  of  the  home  of- 
fice." 


79 


WHETHER  PROPERTY  IN  THE  HANDS  OF  SALES  AGENTS  IN 
DIFFERENT  PARTS  OF  ILLINOIS  OUTSIDE  OF  CHICAGO  AND 
IN  OTHER  STATES,  SHOULD  BE  LISTED  FOR  TAXATION  IN 
CHICAGO. 

(Oliver  Typewriter  Co.,  June  14,  1902.) 

"Have  you  had  occasion  to  inquire  of  your  at- 
torney whether  if  we  have  stock  on  consignment 
with  sales  agents  in  different  parts  of  this  state 
or  in  other  states,  such  stock  should  be  returned 
by  us  in  our  tax  schedules  in  Chicago,  or  be  listed 
at  the  place  where  stock  is  held.  We  presume  the 
latter  would  be  the  proper  course.  If  you  have 
any  information  on  this  point,  please  favor  us 
with  the  same  as  soon  as  convenient,  and  oblige." 
Section  7  of  the  Revenue  Act  provides  (3  S.  &  C. 
Eev.  Stat.,  p.  3407) : 

"Personal  property,  except  such  as  is  required 
in  this  Act  to  be  listed  and  assessed  otherwise, 
shall  be  listed  and  assessed  in  the  county,  town, 
city,  village  or  district  where  the  owner  resides. 

*  *  Stock  at  place  of  corporate  office.  The  capital 
stock  and  franchises  of  corporations  and  persons, 
except  as  may  be  otherwise  provided,  shall  be  listed 
and  taxed  in  the  county,  town,  district,  city  or  vil- 
lage where  the  principal  office  or  place  of  busi- 
ness of  such  corporation  or  person  is  located  in 
this  State.  If  there  be  no  principal  office  or  place 
of  business  in  this  State,  then  at  the  place  in  this 
State  where  any  such  corporation  or  person  trans- 
acts business." 
Section  9  provides : 

' '  9.  That  property  of  manufacturers  and  others, 
in  the  hands  of  agents,  shall  be  listed  and  assessed 
at  the  place  where  the  business  of  such  agent  is 
carried  on." 
Section  11  provides: 

"1.  Personal  property  in  transitu,  shall  be 
listed  and  assessed  in  the  county,  town,  city  or 
district  where  the  owner  resides;  Provided,  if  it 


80 

is  intended  for  a  business,  it  shall  be  listed  and 
assessed  at  the  place  where  the  property  of  such 
business  is  required  to  be  listed." 
Section  18  provides : 

' '  18.  No  consignee  shall  be  required  to  list,  for 
taxation,  the  value  of  any  property  consigned  to 
him  for  the  sole  purpose  of  being  stored  or  for- 
warded, except  to  the  extent  of  his  interest  in  such 
property. ' ' 
Section  19  provides : 

"19.     Persons  required  to  list  property  on  be- 
half of  others  shall  list  it  in  the  same  place  in 
which  they  are  required  to  list  their  own ;  but  they 
shall  list  it  separately  from  their  own,  specifying 
in  each  case  the  name  of  the  person,  estate,  com- 
pany or  corporation  to  whom  it  belongs." 
The  stock,  when  in  the  hands  of  sales  agents  in  dif- 
ferent parts  of  this  state,  should  therefore,  be  listed 
by  such  agents  at  the  place  where  they  carry  on  their 
business. 

Property  situated  in  other  states,  need  not  be  listed 
in  Illinois,  because  it  is  taxable  only  in  the  state  where 
located.    Otherwise,  if  taxed  here,  and  also  subject  to 
taxation  where  located,  there  would  be  double  taxa- 
tion, and  this  is  not  countenanced  by  the  courts. 
1  Desty  on  Taxation,  pp.  55,  56,  et  seq.; 
Rorer  on  Interstate  Law,  281,  et  seq.; 
People  v.  Comm.,  23  N.  Y.,  224 ; 
Mills  v.  Thornton,  26  111.,  300; 
Irving  v.  R.  R.  Co.,  94  111.,  105. 


WHETHER  EEPOETS  ABE  REQUIRED  TO  BE  MADE  BY  FOREIGN 
CORPORATIONS  UNDER  THE  FOREIGN  CORPORATION  LAWS 
OF  OHIO  AND  INDIANA. 

(American  Straw  Board  Co.,  June  16,  1902.) 

"I  would  like  to  have  an  opinion  from  the  at- 
torney of  the  Manufacturers'  Association  on  the 
following : 

' '  First :  Whether  or  not  the  States  of  Ohio  and 


81 

Indiana,  or  either  of  them,  have  laws  requiring 
foreign  corporations  to  make  reports  of  their 
property  and  business  with  the  said  state  under 
penalty  ? 

" Second:  Whether  or  not  there  are  such  laws 
we  ought  to  make  the  required  reports,  and  what 
reports  are  required?" 

The  statutory  provisions  of  those  states  are  as  fol- 
lows: 

OHIO. 

This  statute  provides  that  every  foreign  corpora- 
tion shall  file  a  sworn  statement  containing  the  follow- 
ing facts:  ijajj 
"1.     The.number  of  shares  of  authorized  capital 
stock  of  the  company  and  the  par  value  of  each 
share. 

"2.  The  name  and  location  of  the  office  or 
offices  of  the  company  in  Ohio,  and  the  name  and 
address  of  the  officers  or  agents  of  the  company  in 
charge  of  its  business  in  Ohio. 

1  '3.  The  value  of  the  property  owned  and  used 
by  the  company  in  Ohio,  where  situated,  and  the 
value  of  the  property  of  the  company  owned  and 
used  outside  of  Ohio. 

"4.     The  proportion  of  the  capital  stock  of  the 
company  which  is  represented  by  property  owned 
and  used  and  by  business  transacted  in  Ohio." 
There  is  a  privilege  tax  of  one-tenth  of  one  per  cent, 
upon  the  proportion  of  the  authorized  capital  stock 
of  the  corporation  represented  by  property  owned  and 
used  and  business  transacted  in  Ohio. 

The  law  provides  for  a  penalty,  for  non-compliance 
with  the  law,  of  $1,000  for  each  month,  and  also  pro- 
vides that  no  action  shall  be  maintained  by  any  such 
corporation  upon  its  contracts  during  the  time  of 
such  non-compliance.  It  is  also  made  a  misdemeanor 
for  any  person  to  solicit  business  for  any  such  corpora- 
tion until  it  complies  with  the  law. 


82 


INDIANA. 

This  statute  provides,  under  penalty,  that  agents  of 
foreign  corporations,  before  entering  upon  the  duties 
of  their  agency,  shall  deposit  in  the  clerk's  office  of 
the  county  where  they  propose  doing  business,  the 
power  of  attorney  or  other  authority  under  which  they 
act  as  agents. 

The  statute  also  provides  that  such  agents  shall  also 
file  a  duly  authenticated  copy  of  the  order,  or  resolu- 
tion of  the  directors  or  managers  of  the  corporation, 
authorizing  citizens  and  residents  of  Indiana  to  sue 
in  Indiana  and  obtain  service  of  process  on  such 
agent. 

The  act  of  1901  provides  that  every  foreign  corpora- 
tion shall  maintain  a  public  office  in  Indiana  for  the 
transaction  of  its  business,  where  proper  books  shall 
be  kept;  that  an  agent  shall  be  designated  upon  whom 
service  of  process  can  be  had;  that  a  certified  copy 
of  the  certificate  or  character  shall  be  filed  with  the 
Secretary  of  State,  together  with  a  sworn  statement 
showing  the  proportion  of  the  capital  stock  of  said 
corporation  represented  by  its  property  located  and 
business  transacted  in  Indiana  with  the  fee  required 
of  domestic  corporations.  There  is  a  penalty  of  $1,000 
for  non-compliance. 

The  question  of  whether  or  not  a  foreign  corporation 
is  required  to  comply  with  these  laws,  in  each  case 
depends  upon  whether  it  is  "doing  business"  in  those 
states,  and  what  is  " doing  business"  is  dependent 
upon  the  facts  and  circumstances. 

Upon  what  constitutes  "doing  business"  I  have 
from  time  to  time  given  numerous  opinions  to  the 
Association. 


83 


AS  TO  WHETHER  SALESMEN  WHO  BENDER  FRAUDULENT  EX- 
PENSE ACCOUNTS  CAN  BE  PROSECUTED  CRIMINALLY  AND 
UNDER  THE  LAWS  OF  WHAT  STATE. 

(Hibbard,  Spencer,  Bartlett  &  Co.,  June  17,  1902.) 

"A  traveling  salesman  in  Iowa  was  employed 
under  an  oral  contract  by  a  Chicago  wholesaler. 
By  the  terms  of  this  contract  the  salesman  was 
required  to  keep  an  accurate  account  of  the  money 
expended  by  him  for  his  traveling  expenses,  these 
expenses  to  be  refunded  to  the  salesman  at  stated 
intervals  by  his  employer  upon  presentation  of  an 
itemized  expense  account.  A  set  of  printed  in- 
structions, from  which  the  following  is  an  extract, 
was  handed  to  the  salesman: 

' '  '  We  expect  to  pay,  and  are  quite  willing  to  pay, 
all  legitimate  traveling  expenses  (such  as  Kail- 
road,  'Bus  and  Stage  Fares,  Excess  Baggage,  Liv- 
ery, Hotel  Bills, — for  lodging  and  meals  only — 
Telegraph  and  Postage),  that  are  necessarily  in- 
curred in  the  transaction  of  our  business,  at  just 
the  figures  which  the  salesman  actually  pays.  No 
salesman  can  honestly  charge  more,  and  we  aim 
to  engage  only  honest  men.  Please  keep  an  ex- 
act itemized  account  each  day,  just  as  you  would 
if  you  were  keeping  a  cash  account  in  the  house 
instead  of  on  the  road. ' 

"  Having  such  an  agreement  with  and  such  in- 
structions from  his  employer,  the  salesman  sent 
in  a  false  itemized  statement  of  his  expenditures, 
in  which  certain  items  were  materially  exagger- 
ated. For  instance, — he  charged  $10  as  'Railway 
Fare'  where  $5  only  was  expended.  Five  dollars 
was  charged  as  'Hotel  Bill,'  when  as  a  matter  of 
fact  $2  only  was  expended.  Relying  upon  the 
accuracy  of  the  account,  the  employer  remitted 
the  full  amount  claimed  by  the  salesman. 

"Did  the  salesman  commit  a  crime!  If  so,  what 
crime,  and  against  the  laws  of  which  state?" 
In  my  opinion  the  salesman  is  guilty  of  the  crime 


84 

of  obtaining  money  by  false  pretenses,  and  the  offense 
is  committed  in  the  state  where  the  property  is  ob- 
tained. The  method  of  obtaining  the  money  and  place 
where  paid  is  not  entirely  clear  from  the  above  state- 
ment. Assuming  that  the  remittance  was  made  in  Chi- 
cago, in  cash  or  by  check  or  draft,  on  a  bank  in  Chi- 
cago, which  was  subsequently  cashed,  the  offense,  in 
my  opinion,  was  committed  in  Chicago.  Such  is  the 
weight  of  authority: 
See: 

Sec.  12  Ency,  of  Law  (2nd  Ed.),  pp.  847,  848. 

1  McClain's  Criminal  Law,  p.  696; 

8  Ency.  Pleading  &  Practice,  p.  858 ; 

U.  S.  v.  Plympton,  Fed.  Gas.,  16057 ; 

Commonwealth  v.  Wood,  142  Mass.,  459; 

State  v.  Schaeffer,  89  Mo.,  271. 


THE  OBLIGATION  TO  PAY  EMPLOYES   WHO   LEAVE  THEIR  EM- 
PLOY BEFORE  THE  REGULAR  PAY  DAY. 

(Eclipse  Gas  Stove  Co.,  July  14,  1902.) 
' '  We  would  be  pleased  to  have  you  advise  us  as 
to  our  obligation  to  pay  help  that  leave  our  em- 
ploy before  our  regular  pay  day.    Our  custom  is 
to  pay  every  two  weeks,  holding  back  one  week's 
time,  and  in  a  number  of  instances  men  have  de- 
manded their  pay  on  the  day  they  leave. ' ' 
Where  the  hiring  is  by  the  week  and  the  servant 
abandons   his   employment  before  the  completion   of 
the  week,  without  just  cause  and  without  the  master's 
consent,  he  is  not  entitled  to  recover  anything  for  the 
services  performed  during  that  week.     The  time  of 
payment  of  wages  depends  on  the  contract.     If  the 
servant  was  hired  upon  the  agreement  that  his  wages 
should  be  paid  at  stated  intervals,  then  they  are  not 
due  until  such  time,  even  though  the  servant  leaves 
before  that  time.    If  there  is  no  agreement  as  to  the 
time  of  payment,  the  wages  are  due  at  the  time  of 
the  completion  of  the  period  of  hiring.     If  there  is 
a  custom  of  the  house  as  to  the  time  of  payment,  the 


85 

servant  is  bound  only  by  such  custom  only  where  it  is 
uniform,  long  established,  generally  acquiesced  in,  and 
so  well  known  as  to  induce  the  belief  that  the  parties 
contracted  with  reference  to  it.  The  custom  cannot, 
however,  vary  the  terms  of  an  express  contract. 

The  so-called  "Weekly  payment  of  wages  act," 
passed  April  23,  1901,  was  held  unconstitutional  in 
Braceville  Coal  Co.  v.  People,  147  111.,  66. 

THE  ASSESSMENT  OF  CAPITAL  STOCK  OF  CORPORATIONS. 

(Illinois  Manufacturers'  Association,  Aug.  19,  1902.) 
The  questions  you  propounded  to  me  for  an  opinion, 
I  answer  as  follows: 

1.  Under  Clause  4  of  Section  3  of  the  Revenue  Act, 
"the  capital  stock,  including  the  franchise,  of  all 
corporations,  organized  for  pecuniary  profit  is  re- 
quired to  be  assessed  by  the  State  Board  of  Equal- 
ization, except  corporations  organized  for  purely 
manufacturing  purposes,  or  for  the  mining  and 
sale  of  coal,  or  for  printing,  or  for  the  publishing 
of  newspapers,  or  for  the  improving  and  breeding 
of  stock. ' ' 

2.  By  said  Clause  4,  it  is  further  provided  that 
"the  capital  stock  of  all  companies  and  associa- 
tions now  or  hereafter  created  under  the  Laws  of 
this  State  (except  those  required  to  be  assessed 
by  the  local  assessors  as  hereinafter  provided), 
shall  be  so  valued  by  the  State  Board  of  Equaliza- 
tion as  to  ascertain  and  determine  respectively 
the  fair  cash  value  of  such  capital  stock,  including 
the  franchise,  over  and  above  the  assessed  value 
of  the  tangible  property  of  such  company  or  asso- 
ciation *  *  *  provided  further  that  companies  and 
associations  organized  for  purely  manufacturing 
purposes  *  *  *  shall  be  assessed  by  the  local  as- 
sessors in  like  manner  as  the  property  of  individ- 
uals is  required  to  be  assessed.'- 

3.  By  Section  32  of  the  Revenue  Act,  it  is  provided 
that  corporations  other  than  those  required  to  be  as- 
sessed by  the  local  assessors 


86 

"shall,  in  addition  to  the  other  property  required 
to  be  listed,  make  out  and  deliver  to  the 

assessor  a  sworn  statement." 

In  that  statement  it  is  necessary  to  specify,  among 
other  things,  the  market  value  or  if  no  market  value, 
the  actual  value  of  the  shares  of  stock.  To  that  value 
there  is  to  be  added  the  total  amount  of  all  indebted- 
ness for  current  expenses.  From  the  total  thus  ascer- 
tained there  is  to  be  deducted  the  assessed  valuation 
of  all  tangible  property.  In  case  of  failure  or  refusal 
to  make  sworn  statement,  it  is  made  the  duty  of 
the  assessor  to  make  a  statement  from  the  best  infor- 
mation which  he  can  obtain.  By  Section  33  of  the 
Revenue  Act,  it  is  provided  that  such  statement  shall 
be  returned  by  the  Assessor  to  the  County  Clerk  and 
by  him  forwarded  to  the  State  Auditor,  and  it  is  made 
the  duty  of  the  Auditor  annually,  on  the  meeting  of 
the  Board  of  Equalization,  to  lay  before  the  Board 
the  statements  required  to  be  returned  to  him, 

' '  and  such  Board  shall  value  and  assess  the  capital 

stock  of  such  companies   or  associations  in  the 

manner  provided  in  this  Act." 

4.  I  have  quoted  the  pertinent  provisions  of  the 
statute  so  that  every  member  of  the  Association  will 
be  able  to  readily  grasp  the  statutory  requirements. 
Such  a  return,  either  by  the  corporation  itself  or  by 
the  local  assessor,  is  not  an  essential  prerequisite  to 
the  valuation  of  the  capital  stock  by  the  State  Board. 
Such  valuation  by  the  State  Board,  where  there  has 
been  a  failure  to  make  such  list  or  return  by  the  cor- 
poration as  well  as  by  the  local  assessor,  will  not  ren- 
der the  tax  levied  on  the  capital  stock  by  the  State 
Board  of  Equalization  void.    This  has  been  expressly 
decided  in  Pacific  Hotel  Company  v.  Lieb,  83  111.,  602. 
That  decision  has  been  approved  in  later  cases,  such 
as  Distilling  and  Cattle  Feeding  Co.  v.  People,  161  111., 
101; 

5.  The  law  providing  for  the  assessment  of  capital 
stock  of  corporations  does  not  apply  to  corporations 
created  under  the  laws  of  other  states,  that  is  to  say, 
foreign  corporations. 


87 

6.  The  law  does  not  apply  to  "companies  and  as- 
sociations organised  for  purely  manufacturing  pur- 
poses." 

7.  Whether  a  corporation  is  one  "organized   for 
purely  manufacturing  purposes"   will   depend  upon 
the  charter  of  the  corporation.     The  Supreme  Court 
said,  in  Distilling  &  Cattle  Feeding  Co.  v.  People,  161 
111.,  101,  103,  that 

"it   goes   without  saying  that   the   purpose   for 
which  a  corporation  is  organised  must  be  ascer- 
tained by  reference  to  the  terms  of  its  charter. ' ' 
And,  again,  in  Evanston  Electric  Illuminating  Co.  v. 
Kochersperger,,  175  111.,  26,  the  court  said: 

"In  order  to  settle  this  question,  resort  must  be 
had  to  its  charter." 

And  the  court  approvingly  quotes  the  language  just 
cited  in  the  prior  decision  in  Distilling  &  Cattle  Feed- 
ing Co.  v.  People.  In  other  words,  the  court  will  look 
not  to  the  actual  business  transacted  by  a  corporation, 
but  to  the  power  given  to  the  corporation  by  its  char- 
ter. If  the  charter  covers  more  than  a  "purely  manu- 
facturing purpose,"  the  company  will  not  come  within 
the  exemption  here  under  discussion.  In  the  Evans- 
ton  Electric  Illuminating  Company  case,  the  charter 
authorized  the  company  "to  furnish  light,  heat  and 
power  for  public  and  private  use."  It  was  proved  on 
the  hearing  that  the  company  ' '  generates  the  electricity 
which  it  furnishes."  The  court,  however,  said  that 
under  the  charter  power,  regardless  of  the  business 
transacted  by  the  company,  it  was  not  one  organized 
for  "a  manufacturing  purpose."  The  obligations  of 
your  members,  therefore,  in  the  premises,  will  depend 
upon  the  language  of  their  respective  charters. 

8.  There  are  several  ways  to  avoid  the  application 
of  the  statute  under  consideration: 

(a)  By  having  the  law  amended.    This  was  in- 
effectually attempted  at  the  last  session  of  the 
legislature. 

(b)  By  organizing  under  the  laws  of  another 
State. 


88 

(c)    By  changing  the  charter  so  as  to  make  it 
cover  a  "purely  manufacturing  purpose." 
If  the  charters  of  the  members  bring  them  within 
the  statute  they  can  readily,  under  our  law,  appro- 
priately amend  their  charters. 

9.  The  amendment  of  the  charter  is  the  simplest  and 
least  expensive  course  to  pursue.  A  charter  reading 
as  follows  would  cover  the  case : 

"The  object  for  which  the  corporation  is  formed 

is  to  manufacture   and  sell  the   so 

manufactured. ' ' 

THE    LIABILITY    OF    A    CARRIER    FOR    THE    LOSS    OF    SAMPLE 
TRUNKS  CARRIED  AS  BAGGAGE. 

(Becker,  Mayer  &  Co.,  October  1,  1902.) 
"Will  you  kindly  procure  for  us  the  opinion  of 
our  general  counsel,  Mr.  Levy  Mayer,  as  to  the 
liability  of  a  railroad  company,  where,  through 
the  palpable  negligence  of  one  of  their  employes, 
a  line  of  sample  garments  left  in  their  care  has 
been  damaged,  and  whether  or  not  they  are  liable 
for  any  damage  arising  through  such  negligence? 
One  of  our  salesmen  checked  his  trunks  to  a  cer- 
tain point  in  South  Dakota,  located  on  the  Chicago 
&  Northwestern  Eailway.    The  station  agent  left 
the  trunks  on  the  platform  and  during  a  severe 
storm  quite  a  few  of  the  samples  were  damaged. 
We  will  be  glad  to  have  Mr.  Mayer's  opinion  as 
to  our  standing  in  court  in  a  case  of  this  nature." 
The  liability  of  a  carrier  for  baggage  entrusted  to 
its  care  is  that  of  an  insurer  and  it  is  liable  for  any 
loss   or  injury  to   such  baggage   unless   the  loss   or 
injury  was  caused  by  the  act  of  God  or  the  public 
enemy,  or  by  inevitable  accident.    The  liability  of  the 
carrier  for  baggage  is  limited  to  such  articles  as  are 
necessary  to  the  comfort  or  use  of  the  passenger  dur- 
ing his  journey.     Samples  carried  by  a  passenger  in 
his  trunk,  with  a  view  to  enabling  him  to  make  sales 
of  goods,  are  more  properly  mere  merchandise  and 
are  not  to  be  included  within  the  term  "baggage."  The 


fact  that  they  are  necessary  to  the  object  of  the  passen- 
ger's journey  does  not  affect  the  rule. 
See  the  following  cases: 

Michigan  Central  R.  R.  v.   Carroiv,  73  111., 
348. 

Hawkins  v.  Hoffman,  6  Hill.  (N.  Y.),  586. 

Penn.  Co.  v.  Miller,  35  Ohio  St.,  541. 

3  Ency.  of  Law  (2d  Ed.),  p.  533,  and  cases 

cited. 

If,  however,  the  carrier,  with  a  full  knowledge  of  the 
character  of  the  trunk,  accepts  it  and  undertakes  to 
carry  it  as  baggage,  it  is  liable  to  the  same  extent  as 
if  it  were  baggage. 

Knowledge  may  in  some  cases  be  presumed  where 
from  the  outward  appearance  of  the  package,  its  con- 
tents are  obvious.  The  carrier  is  not  bound,  however, 
to  make  inquiries. 

Jacobs  v.  Suit,  33  Fed.,  412. 

Mich.  Cent.  R.  R.  v.  Carrow,  73  111.,  348. 

3  Ency.  of  Law  (2d  Ed.),  pp.  533,  540,  541. 
The  statement  of  facts  submitted  is  silent  upon  the 
material  question  as  to  whether  the  railroad  company 
undertook  to  carry  the  trunk  with  knowledge,  actual 
or  constructive,  that  it  contained  sample  garments.  If 
the  company  had  such  knowledge  it  is,  in  my  opinion, 
liable.  If  it  did  not  have  such  knowledge,  then  its 
liability  is  that  of  a  "depositary"  as  distinguished 
from  a  "carrier."  As  a  depositary,  it  is  liable  only 
for  "gross"  negligence,  which  has  been  defined  to 
be  the  absence  or  want  of  slight  care  or  diligence. 
What  constitutes  gross  negligence  will  depend  in  each 
case  upon  a  variety  of  circumstances,  such  as  the  occu- 
pation, habits  and  general  character  of  the  depositary 
upon  the  value  and  character  of  the  thing  deposited, 
and  upon  local  custom  and  usage.  It  is  in  general  a 
question  of  fact  to  be  determined  by  a  jury  upon  all 
the  evidence  in  the  case. 

Cases,  supra. 

Gray  v.  Merriam,  148  111.,  179. 

Shelly  v.  Kahn,  17  111.,  170. 

3  Encyclopedia  (2d  Ed.),  p.  542. 


90 

5  Encyclopedia  (2d  Ed.),  p.  286. 
Mich.  Cent.  R.  R.  Co.  v.  Carrow,  73  111.,  348. 
Smith  v.  N.  &  L.  Railroad,  27  N.  H.,  364. 
Transportation  Co.  v.  Story,  50  Md.,  4. 


WHETHER  CORPORATIONS  ORGANIZED  FOR  PURELY  MANU- 
FACTURING PURPOSES,"  BUT  WHICH  CARRIES  ON  OTHER 
BUSINESS  NOT  AUTHORIZED  BY  ITS  CHARTER,  IS  SUBJECT 
TO  ASSESSMENT  ON  ITS  CAPITAL  STOCK. 

(Illinois  Manufacturers'  Association,  October  11, 

1902.) 

"Referring  to  the  subject  of  taxation  on  capital 
stock  of  Illinois  corporations : 

We  understand  from  opinions  heretofore  given 
by  the  counsel  of  your  Association  that  the  capital 
stock  of  Illinois  corporations,  except  those  engaged 
in  manufacturing,  etc.,  is  subject  to  taxation  by 
the  State  Board  of  Equalization.  We  also  under- 
stand that  the  wording  of  the  charter  determines 
whether  a  corporation  is  to  be  classed  as  exclu- 
sively 'manufacturing'  or  not.  We  are  engaged 
in  manufacturing  and  selling  of  the  manufactured 
product.  In  addition  to  that  we  are  doing  a  gen- 
eral jobbing  business.  We  should  like  to  ascer- 
tain whether  it  would  be  perfectly  safe  for  a  cor- 
poration such  as  ours  to  amend  its  charter  so  that 
it  would  be  classed  as  an  exclusively  manufactur- 
ing corporation,  continuing,  however,  to  deal  in 
articles  not  manufactured  by  it,  extend  credit  to 
customers,  etc." 

In  the  opinions  I  have  heretofore  rendered  I  have 
pointed  out  what  the  Supreme  Court  has  said  on  the 
subject.  Thus,  in  Distilling  &  Cattle  Feeding  Co.  v. 
People,  161  111.,  101,  the  court  said  on  p.  103 : 

' '  It  goes  without  saying,  that  the  purpose  for 
which  a  corporation  is  organized,  must  be  ascer- 
tained by  reference  to  the  terms  of  its  charter ;  and 
it  seems  to  be  clear,  upon  a  careful  examination  of 
the  terms  of  clause  2  of  the  charter  as  above 


91 

quoted,  that  it  was  not  organized  for  purely  manu- 
facturing purposes." 
In  that  case  the  company  was  forjned  to— 

"carry  on  a  general  business  of  distilling,  redis- 
tilling and  rectifying  high  wines,  alcohol,  spirits, 
gins  and  whiskeys  of  every  kind  and  description, 
and  deal  in  the  same  *  *  *  also  to  engage  in  feed- 
ing and  dealing  in  cattle  and  other  livestock. ' ' 
The  court  held  that  "feeding  and  dealing  in  cattle 
and  other  livestock"  is  not  manufacturing,  and  there- 
fore, held  that  the  capital  stock  of  the  company  was 
subject  to  taxation  by  the  State  Board  of  Equalization. 
Similar  language  is   repeated  in  Evanston  Electric 
Illuminating  Co.  v.  Kochsperger  et  al.,  175  111.,  26. 

The  Supreme  Court  has  not,  however,  had  before 
it  the  converse  of  the  proposition,  viz.:  If  a  corpora- 
tion is  organized  purely  for  manufacturing  purposes 
but  engages  in  business  of  a  kind  which  it  not  purely 
manufacturing,  will  its  capital  stock  be  amenable  to 
taxation  by  the  State  Board?  If  it  be  the  law  as  said 
in  Distilling  &  Cattle  Feeding  Co.  v.  People,  that — 

"It  goes  without  saying  that  the  purpose  for 
which  a  corporation  is  organized  must  be  ascer- 
tained by  reference  to  its  charter," 
then  in  my  opinion  it  ought  to  follow  logically  that 
the  capital  stock  of  a  corporation  which  does  a  busi- 
ness not  "purely  manufacturing"  is  not  subject  to 
taxation  by  the  State  Board,  if  the  charter  of  the  com- 
pany limits  its  business  to  one  which  is  ' '  purely  manu- 
facturing." The  fact  that  an  existing  corporation  by 
its  charter  is  authorized  to  do,  and  actually  does  a 
business  not  purely  manufacturing,  but  amends  its 
charter  to  a  purely  manufacturing  purpose,  and  yet 
continues  to  transact  a  business  which  is  not  purely 
manufacturing,  may  be  possibly  construed  by  the  court 
to  be  a  fraud  upon  the  law  and  to  be  no  defense  to  a 
tax  assessed  by  the  State  Board. 

There  is,  however,  a  more  serious  question  to  be 
considered  in  this  connection,  and  it  is  this :  If  a 
corporation  organized  for  purely  manufacturing  pur- 
poses should  carry  on  a  business  not  authorized  by 


92 

its  charter,  the  conduct  of  such  business  would  be 
ultra  vires,  and  contracts  involving  ultr(a  vires  busi- 
ness can  not  as  a  general  rule  be  enforced  in  the  courts, 
if  the  defense  of  ultra  vires  be  interposed. 

There  is  also  a  further  possibility,  and  it  is  this: 
If  a  corporation  should  thus  carry  on  an  ultra  vires 
business,  the  attorney-general  would  have  the  right, 
as  was  done  in  People  v.  Pullman  Palace  Car  Co.,  175 
111.,  125,  to  prevent  by  an  appropriate  remedy,  the 
usurpation  of  corporate  powers.  It  is  true  that  the 
public  authorities  are  not  so  ready  to  interfere  with 
mere  private  corporations  as  with  institutions  of  the 
size  and  character  of  the  Pullman  Palace  Car  Co. 

The  whole  matter,  so  far  as  I  can  read  it,  in  as  well 
as  between  the  lines  of  the  communication  to  which 
this  is  a  reply,  can  be  obviated,  as  the  law  now  stands, 
by  incorporating  in  another  state  and  doing  business 
here,  or  by  dividing  up  the  business,  making  of  one 
part  of  it,  which  is  purely  manufacturing,  a  distinct 
corporation,  and  of  the  other  part  of  it,  which  is  not 
purely  manufacturing,  a  separate  corporation  with  an 
insignificant  capital  stock.  But  there  cannot  be  organ- 
ized in  this  state  two  corporations  having  the  same  or 
similar  names.  Therefore,  if  it  be  determined  to  re- 
tain precisely  the  same  name,  one  of  the  two  corpora- 
tions to  which  I  have  referred  can  be  legally  incor- 
porated in  another  state.  By  thus  dividing  up  the 
business  those  owning  stock  in  one  corporation  can 
hold  the  same  proposition  of  stock  in  the  second  cor- 
poration. Under  the  law  of  this  state  one  corporation 
is  not  permitted  to  acquire  and  own,  as  an  ordinary  in- 
vestment, stock  of  another  corporation.  Under  the 
laws  of  some  states,  like  New  Jersey,  corporations 
there  organized  have  the  legal  right  to  own  stock  in 
other  New  Jersey  corporations,  or  in  corporations  or- 
ganized elsewhere. 

This  opinion  has  grown  to  some  length,  but  I  have 
endeavored  to  anticipate  some  queries  which,  if  they 
have  not  already  arisen,  are  likely  to  arise  in  the 
minds  of  those  who  have  requested  this  opinion. 


93 


THE  FOREIGN  CORPORATION  LAW  OF  KANSAS  AND  WHETHER 
MAKING  OF  CONSIGNMENT  CONTRACTS  CONSTITUTES  DO- 
ING BUSINESS  IN  KANSAS. 

(Illinois  Manufacturers'  Association,  October  11, 

1902.) 

I  have  your  favor,  enclosing  communication  from 
one  of  your  members,  in  which  my  opinion  is  asked  as 
to  whether  or  not  said  member  is  subject  to  the  foreign 
corporation  law  of  Kansas.  The  facts  stated  are  as 
follows : 

"We  maintain  no  offices  or  stores  in  Kansas, 
but  we  are  doing  business  there,  part  of  which 
consists  of  sales  made  to  dealers,  the  orders  being 
received  either  through  traveling  men  or  by  corre- 
spondence, the  goods  being  shipped  from  here  and 
payment  remitted  here. 

' '  To  other  dealers  we  consign  pianos  and  organs 
under  a  contract  providing  that  the  consignee  is 
to  have  the  exclusive  agency  for  the  sale  of  our 
pianos  and  organs  for  a  given  city  or  county. 
The  agreement  with  consignee  provides  that'  he 
is  to  sell  the  instruments  ordered  within  sixty  days 
from  shipment  and  remit  for  same  cash  or  ap- 
proved customers'  contracts,  which  are  to  be  sub- 
ject to  our  approval;  the  customers'  contract  for 
the  pianos  or  organs  sold  to  be  secured  by  the 
same  and  to  be  made  on  blanks  furnished  by  us 
and  guaranteed  by  the  consignee,  and  payable 
usually  at  our  office  in  Chicago.  The  contract  with 
consignee  provides  as  to  the  basis  on  which  goods 
not  sold  are  to  be  returned  and  credited;  that  the 
consignee  is  to  insure  the  goods,  the  policies  to 
be  payable  to  us  in  case  of  loss,  and  that  the  con- 
signee is  to  pay  all  taxes  while  the  goods  are  in 
his  possession.  The  remuneration  of  the  consignee 
is  to  consist  of  such  sums  as  he  can  sell  the  pianos 
or  organs  for  in  excess  of  the  invoice  price.  The 
contract  with  the  consignee  provides  that  it  is 
not  to  be  regarded  as  executed  until  accepted  by 


94 

us  at  our  office  in  Chicago,  and  is  to  be  interpreted 
as  made  within  the  State  of  Illinois. 

"As  to  the  goods  which  are  sold  through  the 
traveler,  or  by  mail,  we  understand  that  this  class 
of  business  is  interstate  commerce,  but  we  would 
like  to  know  the  opinion  of  your  attorney  as  to 
whether  the  consigning  of  pianos  and  organs  as 
above  described  constitutes  interstate  commerce, 
or  whether  it  would  be  construed  as  doing  busi- 
ness in  the  state." 

I  have  examined  the  contract  referred  to,  and  this 
opinion  is  based  upon  the  above  statement,  also  upon 
the  provisions  peculiar  to  the  contract  submitted. 

1.  The  taking  of  orders  by  traveling  salesmen,  sub- 
ject to  the  approval  of  the  home  office,  or  by  mail,  con- 
stitutes interstate  commerce  and  is  in  my  opinion  not 
*  *  doing  business ' '  in  Kansas. 

2.  The  question  whether  or  not  the  sale  of  goods 
through  a  consignee,  in  the  method  above  stated,  and 
specified  in  the  contract,  is  "doing  business"  in  Kan- 
sas, or  whether  it  constitutes  "interstate  commerce" 
is  referred  to  in  my  opinions  of  July  19,  1901,  to  Dar- 
ling &  Co.,  and  of  October  8, 1901,  to  the  Weber  Wagon 
Co.     The  question  is  one  involved  in  doubt  and  the 
decisions  of  the  courts  are  conflicting,  as  will  appear 
from  the  cases  cited  in  those  opinions. 

3.  Now,  as  to  credit  sales,  the  contracts  between 
the  consignee  and  the  company,   (being  the  consign- 
ment contracts)  and  between  the  company  and  its  cus- 
tomers (being  the  credit  sales)  being  accepted  here, 
are  Illinois  contracts  and  in  my  opinion  do  not  consti- 
tute ' l  doing  business ' '  in  Kansas. 

4.  As  to  the  cash  sales,  if  the  cash  sales  made  by 
the  consignees  are  made  in  the  name  and  on  behalf  of 
the  company,  I  am  of  the  opinion  that  such  sales  would 
constitute  "doing  business"  in  Kansas,  and  subject 
the  company  to  the  operation  of  the  foreign  corpora- 
tion law  of  that  State. 

Whether  the  sales  made  by  the  consignee  in  the 
name  of  the  consignee,  constitute  doing  business,  is  a 
more  difficult  question.  By  the  terms  of  the  contract 


95 

the  title  to  the  goods  remains  in  the  consignor  and  the 
consignee  is  made  the  agent  of  the  consignor  for  the 
sale  of  the  goods.  The  consignor  is  the  undisclosed 
principal.  In  view  of  the  strong  tendency  of  the  courts 
to  enforce  the  so-called  foreign  corporation  laws,  I 
am  inclined  to  the  opinion  that  the  cash  sales,  to  which 
I  am  now  referring,  would  be  held  by  the  courts  to 
constitute  "doing  business"  in  Kansas. 


NOTE: — See  opinion  of  March  17,   1904,  to  Wilcox  Mfg.   Co.— Ed. 
LIABILITY   OF  A   CARRIER   FOR   DELAYING   GOODS   IN    TRANSIT. 

(Illinois  Manufacturers'  Association,  October  28, 

1902.) 

"The  Traffic  Committee  would  like  to  obtain  a 
ruling  from  the  General  Counsel  of  this  Associa- 
tion as  to  the  right  of  a  shipper  or  receiver  of 
freight  to  collect  damages  from  a  railroad  com- 
pany when  goods  have  been  delayed  in  transit  an 
unreasonable  length  of  time.     It  is  getting  to  be 
a  common  practice  that  contracts  can  only  be  made 
on  a  specified  limit  to  finish  them;  and  if  goods 
are  delayed  in  transit,  it  frequently  causes  a  heavy 
loss  to  the  contractor.    This  is  a  question  which 
is  coming  up  more  strongly  all  the  time. ' ' 
It  is  the  duty  of  the  carrier  to  transport  goods  de- 
livered to  it  for  transportation  with  all  convenient  dis- 
patch, i.  e.,  within  a  reasonable  time.    What  is  a  rea- 
sonable time  must  be  determined  by  the  length  of  the 
journey,  the  mode  of  conveyance,  the  weather,  the 
nature  of  the  goods,  and  the  amount  of  the  carrier's 
business  at  the  particular  time.     The  question  is  al- 
ways one  of  fact,  to  be  determined  from  all  the  facts 
and  circumstances  of  the  particular  case. 

If  the  delay  is  unreasonable  and  is  not  justified  by 
a  sufficient  legal  excuse,  the  carrier  is  liable  for  the 
damages  caused  by  such  delay.  It  is  a  sufficient  legal 
excuse  if  the  delay  is  caused  by  an  unusual,  temporary 
influx  of  freight,  or  the  road  is  impassable  by  reason 
of  the  elements,  or  a  collision,  not  the  fault  of  the 


96 

carrier  or  its  employes.  It  is  impossible  to  lay  down 
a  general  rule  applicable  to  all  cases.  Every  case  must 
depend  on  its  own  circumstances.  The  above  sugges- 
tions, however,  will  indicate  the  trend  of  the  decisions. 
There  are  many  cases  in  which  the  carrier  has  been 
held  liable. 
See: 

Hutchinson  on  Carriers,  Sec.  328,  et  seq. 

Pitts,  etc.,  R.  R.  Co.  v.  Hazen,  84  111.,  36. 

I.  C.  R.  R.  Co.  v.  McClellan,  54  111.,  58. 

R.  R.  Co.  v.  Roe,  18  111.,  488. 

R.  R.  Co.  v.  Day,  20  111.,  375. 

C.  &  A.  R.  R.  Co.  v.  Simms,  18  111.  App.,  68. 

R.  R.  Co.  v.  Jungten,  10  111.  App.,  295. 


NOTE: — For  liability   of  carrier   for   delay  on  lines  of  connecting 
carrier,  see  opinion  of  October  30,  1903,  to  Austin  Mfg.  Co. — Ed. 


THE   STATE   FACTORY  INSPECTION   LAW   OF   MISSOURI. 

(Parlin  &  Orendorff  Co.,  Nov.  1,  1902.) 
I  have  your  favor  enclosing  communication  from 
Parlin  &  Orendorff  Company,  containing  notice  to  that 
company  from  the  State  Factory  Inspector  of  Mis- 
souri. The  notice  requests  a  compliance  with  Sections 
6435-6406  of  the  Revised  Statutes  of  Missouri  in  refer- 
ence to  placing  guards  around  elevators  and  erecting 
fire  escapes  upon  their  factory.  The  Parlin  &  Oren- 
dorff Company  says: 

"Enclosed  find  notice  from  the  State  Factory 
Inspector  of  the  State  of  Missouri,  as  issued  to 
our  Kansas  City  House.  Will  you  have  the  kind- 
ness to  advise  us  as  to  the  law  in  question,  and 
whether  or  not  it  is  necessary  for  us  to  comply 
with  the  same.  Also  advise  us  if  the  fire  escape 
law  in  this  State  was  not  declared  unconstitu- 
tional. ' ' 

I  have  examined  the  law  in  question.    Section  6435 
provides : 

"Hatchways,  Etc.,  to  be  Guarded. — The  open- 
ings of  all  hatchways,  elevators  and  wellholes  upon 


97 

every  floor  of  every  manufacturing  mechanical  or 
mercantile  or  public  building  in  this  State,  shall  be 
protected  by  good  and  sufficient  trapdoors  or  self- 
closing  hatches  or  safety  catches,  or  strong  guard- 
rails at  least  three  feet  high,  and  all  due  diligence 
shall  be  used  to  keep  such  trap-doors  closed  at 
all  times,  except  when  in  actual  use  by  the  occu- 
pant of  the  building  having  use  and  control  of  the 
same."  (Laws  of  1891,  p.  159.) 
Section  6436  provides: 

"Fire  Escapes. — All  manufacturing, mechanical, 
mercantile  or  other  establishments  in  this  State, 
of  two  or  more  stories  in  height,  in  which  twenty 
or  more  persons  are  employed  above  the  first  floor 
thereof,  shall  be  provided  with  at  least  one  or  more 
outside  iron  fire  escapes.  For  every  twenty  per- 
sons employed  on  every  floor  above  the  second 
floor  of  such  establishment,  there  shall  be  one 
rope  or  portable  fire  escape,  and  each  story  shall 
be  amply  supplied  with  means  for  extinguishing 
fires."  (Laws  of  1891,  p.  159.) 

The  tendency  of  the  courts  all  over  the  country  is 
to  uphold  such  laws.  The  law  in  question  does  not, 
in  my  opinion,  violate  any  of  the  provisions  of  the 
Federal  Constitution.  I  am  inclined  to  think  that  it 
does  not  violate  the  Missouri  Constitution,  but  do  not 
express  any  fixed  opinion  on  the  question.  It  is  one 
that  I  would  prefer  should  be  submitted  to  a  Missouri 
lawyer,  who  is  familiar  not  only  with  th$  decisions  of 
its  highest  courts  upon  "Missouri  Constitution"  ques- 
tions, but  also  with  the  "local  atmosphere,"  which  is 
frequently  of  much  importance. 

The  fire  escape  law  of  Illinois,  passed  May  27,  1897, 
(Session  Laws  of  1897,  p.  222)  was  declared  constitu- 
tional in  Arms  v.  Ayer,  192  111.,  601,  decided  Oct.  24, 
1901. 


98 


THE  BIGHT  OF  THE  RAILROAD  COMPANIES  TO  CHARGE  LESS 
THAN  CAR  LOAD  RATES  ON  GOODS  BELONGING  TO  MORE 
THAN  ONE  OWNER  WHICH  ARE  COMBINED  INTO  A  CAR- 
LOAD. 

(Skandia  Furniture  Co.,  Nov.  6,  1902.) 
"We  wish  that  you  would  submit  to  Mr.  Mayer 
for  careful  consideration  and  early  reply  the  fol- 
lowing questions,  which  are  wanted  for  our  in- 
formation: Do  the  Eastern  or  Official  Classifica- 
tion, which  permits  of  new  furniture  not  otherwise 
specified  to  go  as  second  class  in  car  lots,  allow 
of  us  loading  cars  containing  goods  for  more  than 
one  customer,  the  car,  of  course,  being  consigned 
to  either  a  customer  interested  in  the  car  or  to  a 
Transfer  Co.,  and  who  unload  and  distribute 
goods?  Can  we  include  in  car  we  load  of  goods 
of  our  manufacture  and  like  goods  made  by  our 
neighbors,  all  of  which  are  for  one  customer  or 
are  for  several  customers  as  the  case  might  be? 
Can  we  employ,  or  can  two  or  three  factories  em- 
ploy a  drayman  or  a  Transfer  Co.  to  load  cars,  in 
which  one  or  two  customers  at  the  other  end  are 
interested,  the  car,  of  course,  being  consigned  to 
one  consignee!  Have  the  Joint  Kate  Inspection 
Bureau  of  Chicago  the  right  to  inspect  cars  which 
we  load  and  are  unloaded  at  the  other  end  by  our 
representatives  and  to  set  up  such  cars  if  found 
to  contain  goods  for  more  than  one  customer  and 
make  rate  as  if  goods  had  gone  local? 

"As  we  interpret  the  Classification,  we  are  en- 
titled to  the  use  of  the  car  rate,  if  the  cars  are 
loaded  with  New  furniture,  such  as  we  manufac- 
ture, and  question  of  one-half  the  car  being  for 
one  customer,  the  other  half  for  another  customer 
should  not  debar  us  from  this  car  service  and  the 
usual  car  rates  of  freight. 

"The  Ey.  Co.'s  make  this  special  car  rate  for 
the  reason  that  they  are  saved  the  trouble  of  re- 
ceipting for  and  handling  goods  at  this  end  and 


99 

the  other  end,  which  would  be  the  case  if  shipped 
local. 

"Does  the  Inter-State  Commerce  Act  cover  any 
part  of  this  question,  or  is  there  any  law  that 
covers  the  point  involved?  Have  we  a  righteous 
claim  against  the  Ry.  Co.  on  such  cars  as  they 
have  inspected  and  they  did  set  up,  and  can  we 
legally  collect  from  them  overcharges  or  differ- 
ence between  car  rates  and  less  than  car  rates? 
We  have  for  some  time  combined  less  than  car 
shipments  as  above  described,  and  sent  them  in 
full  cars  to  the  large  Eastern  cities,  cars  being 
loaded  by  ourselves  and  unloaded  by  some  one  at 
the  other  end,  who  are  paid  for  this  service. 

"The  Joint  Inspection  Bureau  have  lately  held 
up  these  cars  and  set  them  up  to  less  than  car 
rates,  entailing  a  very  large  loss  to  us." 
I  have  not  before  me  a  copy  of  the  so-called  East- 
ern or  Official  Classification  referred  to  in  the  letter 
of  the  Skandia  Co.    From  the  facts  stated  in  this  let- 
ter, however,  I  take  it  that  the  question  upon  which 
my  opinion  is  desired  is  whether  or  not  a  railroad 
company  has  the  right  to  charge  a  "less  than  car 
load"  rate  upon  a  car  load  of  goods  shipped  by  one 
consignor  to  one  consignee  because  of  the  fact  that 
such  goods  belong  to  more  than  one  owner,  or  are  in 
fact  intended  for  more  than  one  customer. 

Section  2  of  the  Interstate  Commerce  Act  provides 
that  a  common  carrier  shall  not  be  entitled  to  a  greater 
or  less  compensation  for  the  transportation  of  any 
freight  than  it  charges  or  receives  from  any  other 
person  ' '  for  doing  him  or  them  a  like  contemporaneous 
service  in  the  transportation  of  a  like  kind  of  traffic 
under  substantially  similar  circumstances."  The  ques- 
tion, therefore,  to  be  determined  is  whether  or  not  a 
car  load  shipment,  made  up  of  goods  belonging  to 
different  owners,  stands  upon  the  same  footing  and 
constitutes  "a  like  contemporaneous  service  in  the 
transportation  of  a  like  kind  of  traffic  under  substan- 
tially similar  circumstances,"  as  a  carload  shipment 
belonging  to  one  owner. 


The  carrier  has  the  right  to  classify  freight  and 
charge  a  different  rate  for  each  class.  Such  classifi- 
cation is  not  based  solely  upon  or  determined  by  the 
cost  or  value  of  the  carrier's  service,  or  the  value  to 
the  owner  of  the  property  carried,  but  every  circum- 
stance which  can  fairly  bear  upon  the  question  must 
be  taken  into  consideration  in  making  the  classifica- 
tion or  fixing  the  rate.  Are  there  any  conditions  ex- 
isting in  the  case  of  a  shipment  of  a  car  load  of  goods 
belonging  to  several  owners  which  do  not  exist  where 
such  goods  belong  to  but  one  owner,  and  if  so,  do 
such  conditions  furnish  a  sufficient  basis  for  a  discrimi- 
nation in  respect  to  rates? 

Irrespective  of  contract  between  the  carrier  and 
the  shipper,  it  is  the  duty  of  the  carrier  to  safely 
carry  and  deliver,  and  for  any  breach  of  this  duty, 
or  for  any  loss  or  injury  to  the  goods,  an  action  may 
be  maintained  by  the  owner.  The  carrier  might,  there- 
fore, be  subjected  to  as  many  actions  as  there  are 
owners  of  goods  in  a  car,  and  such  actions  might  be 
in  as  many  different  jurisdictions. 

In  the  case  of  Lundquist  v.  Grand  Trunk  Railway 
Co.,1  the  identical  question  here  under  consideration 
came  before  Judge  Kohlsaat,  of  the  United  States 
Circuit  Court  for  the  Northern  District  of  Illinois.  The 
bill  in  that  case  was  filed  in  1901  by  a  firm  engaged  in 
the  business  of  shipping  or  forwarding.  They  had 
a  place  of  business  where  they  received  the  goods  of 
parties  desiring  to  have  them  handled  by  the  com- 
plainants, who,  upon  receipt  of  sufficient  goods  from 
various  owners  to  make  a  car  load,  consigned  them  in 
their  own  name  to  their  own  consignee.  It  was  held 
by  Judge  Kohlsaat  that  the  Railroad  Company  was 
entitled  to  charge  complainants  a  "less  than  carload'' 
rate  for  the  reason  that  the  carload  was  made  up  of 
goods  of  more  than  one  owner,  and  the  Railroad  Com- 


1.     See   121   Fed.,  915.— Ed. 


NOTE: — See,  also,  on  same  subject  opinion  of  Dec.  10,  1906,  to  111. 
Mfrs.  Ass'n  and  opinion  of  April  20,  1907,  to  S.  Oppenheimer  &  Co. 
(Opin.  1907.)— Ed. 


101 

pany  was  therefore  subject  to  the  contingent  liability 
of  numerous  actions. 

Outside  of  this  decision  I  cannot  find  that  the 
identical  question  has  ever  been  passed  upon  by  the 
courts  in  this  country.  Whether  the  decision  of  Judge 
Kohlsaat  will  be  followed,  it  is  impossible  to  antici- 
pate. Much  can  be  said  upon  both  sides  of  this  ques- 
tion, because  it  is  by  no  means  free  from  doubt,  but 
with  the  decision  unreversed,  there  is  a  ruling  which 
is  likely  to  be  followed  in  subsequent  cases,  at  least 
in  the  United  States  Circuit  Courts.  The  inquiry  is 
of  considerable  importance,  and  might  well  repay  the 
procurement  of  a  final  decision  in  a  Federal  Court  of 
review,  in  some  properly  prepared  test  case. 

It  will  be  observed  that  these  remarks  apply  to 
inter-state  commerce,  no  question  having  been  put 
about  intra  or  local  state  charges. 


THE  FOKEIGN  COEPOEATION  LAW  OF  TEXAS. 

(Joseph  T.  Ryerson  &  Son,  December  9,  1902.) 

"As  members  of  your  association,  we  desire  to 
make  inquiry  to  ascertain  what  it  is  necessary  for 
us  to  do  in  order  to  legally  do  business  in  the 
State  of  Texas,  i.  e.,  if  there  are  any  regulations 
or  restrictions  on  an  Illinois  corporation  who  are 
selling  material  within  the  State  of  Texas;  we 
wish  to  be  advised." 

I  assume  from  the  above  statement  that  the  method 
of  selling  material  which  is  being  pursued  by  the  com- 
pany is  such  as  to  subject  it  to  the  operation  of  the 
foreign  corporation  laws  of  Texas. 

Sec.  56,  Art.  642,  Chap.  II  (Laws  of  1897,  Ch.  130) 
of  the  Texas  Statute  provides  that  foreign  corpora- 
tions obtaining  permits  to  do  business  in  Texas  shall 
show  to  the  satisfaction  of  the  Secretary  of  State  that 
fifty  per  cent,  of  their  authorized  capital  has  been 
subscribed,  and  at  least  ten  per  cent,  of  the  authorized 
capital  stock  has  been  paid  in  before  such  permit 
is  issued. 


102 

Art.  747,  Chap.  17,  (Laws  of  1897,  Ch.  119)  pro- 
vides that  every  foreign  corporation  desiring  to  do 
business  in  Texas  shall  file  with  the  Secretary  of 
State  a  certified  copy  of  its  charter  and  thereupon  the 
Secretary  of  State  will  issue  a  permit. 

Art.  746  provides  that  no  foreign  corporation  shall 
institute  suit  upon  any  contract  unless  at  the  time  the 
contract  was  made  such  corporation  had  filed  its  char- 
ter as  aforesaid. 

Art.  2434  provides  for  the  payment  of  fees  as  fol- 
lows: 

"Each  foreign  corporation   shall  pay  fees   as 
follows :   If  its  capital  stock  be  one  hundred  thou- 
sand dollars  or  less,  a  fee  of  twenty-five  dollars 
to  procure  a  permit;  if  its  capital  stock  be  more 
than  one  hundred  thousand  dollars,  and  less  than 
five  hundred  thousand  dollars,  it  shall  pay  a  fee 
of  fifty  dollars ;  if  its  capital  stock  be  five  hundred 
thousand  dollars,  and  less  than  one  million  dol- 
lars, it  shall  pay  a  fee  of  one  hundred  dollars; 
if  its  capital  stock  exceed  one  million  dollars,  it 
shall  pay  a  fee  of  two  hundred  dollars." 
In  addition,  a  foreign  corporation  must  pay  an  an- 
nual franchise  tax  of  $25,  when  the  authorized  capital 
is  $25,000  or  less;  $100,  when  the  authorized  capital 
is  more  than  $25,000  and  not  exceeding  $100,000  and 
in  addition,  $1  on  every  $10,000  of  such  stock  in  ex- 
cess of  $100,000,  and  not  exceeding  $1,000,000  and  a 
further  additional  tax  of  $1  for  every  $100,000  in  ex- 
cess of  $1,000,000.    The  tax  is  payable  to  the  Secretary 
of  State  on  May  1st  of  each  year,  the  first  payment 
being  payable  when  the  corporation  commences  busi- 
ness in  the  State. 

THE  FOREIGN  CORPORATION  LAW  OF  NEW  YORK  AND 
WHETHER  SALES  ON  COMMISSION  CONSTITUTE  DOING 
BUSINESS  THERE. 

(Chas.  W.  Shonk  Co.,  December  13,  1902.) 
"Supplementing  our   letter  of  Nov.   19th,   we 
enclose  herewith  schedule  from  the  Comptroller's 


103 

office  of  the  State  of  New  York,  which  they  desire 
us  to  fill  out  and  return.  When  they  sent  us  this 
statement  we  wrote  them  a  letter,  copy  of  which 
we  enclose  herewith.  Their  reply  to  our  letter 
was  that  we  should  fill  out  the  blank  and  leave  it 
to  them  to  decide  whether  we  were  to  be  taxed. 
You  will  note  in  our  letter  to  them  of  Nov.  10th 
we  have  plainly  stated  that  we  did  not  manufac- 
ture anything  in  the  State  of  New  York,  but  that 
we  did  dispose  of  goods  there  through  our  vari- 
ous solicitors,  the  principal  one  of  which  is  lo- 
cated in  New  York  City." 

In  the  letter  to  the  State  Comptroller,  the  company 
states : 

"We  are  a  corporation  of  the  State  of  Illi- 
nois. We  manufacture  everything  here.  We  do 
not  do  any  business  in  New  York  State  other  than 
what  is  sent  to  us  by  solicitors  here  and  there, 
who  sell  our  signs  on  a  commission  basis.  Our 
New  York  City  agent  maintains  an  office  in  the 
Postal  Telegraph  Building.  We  have  no  assets 
there  other  than  a  limited  number  of  samples  of 
signs. ' ' 

I  assume  that  the  company  keeps  no  stock  of  goods 
in  New  York  except  the  samples  referred  to,  which 
are  merely  kept  for  purposes  of  exhibition;  that  no 
sales  or  contracts  are  made  there;  that  all  the  New 
York  orders  are  taken  subject  to  the  approval  of  the 
home  office  here,  where  the  orders  are  filled;  that  the 
goods  sold  on  a  commission  basis  are  sold  in  the  same 
manner — that  is,  subject  to  the  approval  of  the  home 
office  here,  from  where  the  goods  are  shipped,  and 
that  all  goods  are  manufactured  here  and  are  shipped 
upon  orders  received. 

Under  this  state  of  facts  I  am  of  the  opinion  that 
the  company  is  not  engaged  in  business  in  New  York 
and  need  not  make  the  report  referred  to. 

If  my  assumption  as  to  the  method  of  doing  busi- 
ness in  New  York  is  not  correct,  upon  receipt  of  addi- 
tional information,  I  will  advise  further. 


104 


THE  EIGHT  OF  AN  EMPLOYE  TO  ASSIGN   HIS  WAGES. 

(Simonds  Manufacturing  Company,  Dec.  16,  1902.) 
I  have  your  favor  enclosing  communication  from 
Simonds  Mfg.  Co.,  together  with  copy  of  a  proposed 
law  which  it  is  intended  to  submit  to  the  Illinois  legis- 
lature for  passage. 
The  law  provides: 

"Every    assignment,    hypothecation,    sale    or 
transfer  of  the  unearned  wages  or  salary  of  any 
laborer,  mechanic,  clerk  or  employe  shall  be  void; 
and  payment  of  such  wages  or  salary  earned  after 
the  date  of  such  attempted  assignment,  hypothe- 
cation, sale  or  transfer  may  lawfully  be  made  by 
the  person,  firm,  company  or  corporation   from 
whom  such  wages  or  salary  shall  be  due  and  pay- 
able, notwithstanding  such  previous  assignment, 
hypothecation,  sale  or  transfer." 
The  law  attempts  to  deprive  persons  of  the  right 
to   assign   property  to   be   acquired,   and  thus  takes 
away  from  that  property  one  of  its  most  valuable  char- 
acteristics.     The  law  imposes  a  limitation  upon  the 
freedom  of  contract  and  a  restriction  upon  the  pay- 
ment by  employes  of  their  just  debts.     The  assign- 
ment of  unearned  wages,  based  upon  a  subsisting  con- 
tract, has  frequently  been  recognized  by  the  courts. 
The  right  to  labor  and  to  earn  wages  is  a  property 
right  equally  so  with  their  right  to  acquire  and  own 
tangible    property.      The  right  to    dispose    of    one's 
labor  and  of  its   fruits   accruing  under   an   existing 
contract  is  guaranteed  by  both  State  and  Federal  Con- 
stitution.   The  power  of  the  legislature  to  limit  such 
right  cannot  be  arbitrarily  exercised.     The  proposed 
law,  as  drafted,  would  in  my  opinion  be  an  unlawful 
restriction  upon  the  right  of  the  citizen  to  control  his 
own  property,  and  in  my  opinion  would  probably  be 
held  unconstitutional  by  the  courts. 


105 


THE  FOREIGN   CORPORATION  LAW  OP  OHIO. 

(Sattley  Manufacturing  Company,  Dec,  16,  1902.) 

"We  have  been  asked  to  file  our  annual  report 
as  a  foreign  corporation  with  the  Secretary  of 
State  at  Columbus,  Ohio.  Some  of  this  informa- 
tion asked  for  we  do  not  consider  pertinent,  and 
do  not  wish  to  give  it.  Can  you  tell  us  whether  it 
is  necessary  to  make  the  affidavit  and  report  asked 
for?" 

I  have  examined  the  law  in  question (  Sessions  Laws 
of  Ohio,  1902,  p.  125).  Its  provisions  are  referred  to 
in  an  opinion  rendered  the  Association  September  27, 
1902,  at  the  request  of  the  American  Straw  Board 
Co. 

If  the  Sattley  Co.  is  doing  business  in  Ohio,  within 
the  established  meaning  of  that  phrase,  then  it  is 
subject  to  the  law  in  question.  A  foreign  corporation 
has  no  absolute  right  to  do  business  in  a  state  other 
than  the  state  of  its  incorporation,  but  can  only  do 
so  by  virtue  of  the  comity  of  the  foreign  state.  The 
foreign  state,  therefore,  has  the  right  to  impose  con- 
ditions and  limitations  upon  the  foreign  corporation 
doing  business  in  that  state.  The  law  in  question,  in 
my  opinion,  imposes  valid  regulations  upon  corpora- 
tions coming  within  its  provisions  and  is  a  valid  and 
constitutional  law. 

THE   BONUS  ACT   O/   PENNSYLVANIA. 

(Oliver  Typewriter  Co.,  Dec.  24,  1902.) 
I  have  your  favor  enclosing  communication  from 
Oliver  Typewriter  Co.  in  answer  to  mine  of  the  13th 
inst.  That  company  asks  whether  it  is  necessary  to 
answer  certain  questions  contained  in  the  bonus  re- 
port to  the  State  of  Pennsylvania,  a  copy  of  which  re- 
port is  enclosed.  The  report  in  question  is  required 
under  the  provisions  of  the  so-called  "bonus"  law  of 
Pennsylvania,  passed  May  8,  1901.  On  Oct.  7,  1901, 
I  rendered  an  opinion  to  the  Association  that  that  law 


106 

is,  in  my  opinion  constitutional.  The  law  in  question 
therefore  imposes  valid  conditions  upon  such  compa- 
nies as  come  within  its  scope  and  the  information 
called  for  by  the  law  should  therefore  be  furnished  by 
such  corporation. 

I  have  heretofore,  on  January  15,  1902,  rendered  an 
opinion  to  the  Association  as  to  the  method  as  to  de- 
termining "the  amount  of  capital  wholly  employed  in 
the  State  of  Pennsylvania."  Of  course  the  difficulty 
in  giving  the  information  would  present  no  legal  rea- 
son for  refusing  to  give  it. 


THE  FOREIGN   CORPORATION  LAW  OF  TEXAS. 

(Palmer,  Fuller  &  Co.,  Dec.  29,  1902.) 
"We  are  in  receipt  of  yours  enclosing  an  opin- 
ion of  Mr.  Levy  Mayer,  General  Counsel,  in  refer- 
ence to  the  Foreign  Corporation  Law  of  Texas. 
We  understand,  and  we  would  like  to  know  if  we 
are  right  or  not  in  our  understanding,  that  the 
foreign  corporation  law  of  Texas  does  not  affect 
any  one  who  is  simply  selling  goods  in  the  State 
of  Texas  through  traveling  representatives,  or 
even  through  resident  representatives,  so  long  as 
the  goods  are  shipped  from  Chicago,  billed  from 
Chicago,  charged  from  Chicago  and  are  payable 
in  Chicago.  In  other  words,  we  have  no  office  in 
Texas,  have  no  stock  in  Texas  and  ship  from  Chi- 
cago and  collect  from  Chicago,  simply  doing 
business  in  an  inter-state  way,  as  we  understand 
it,  but  we  would  like  to  be  quite  sure  on  this 
point.  We  notice  in  other  opinions  rendered  by 
Mr.  Mayer  that  to  do  business,  as  we  are  doing  it 
in  Texas,  in  other  states,  is  really  inter-state  busi- 
ness and  that  we  are  not  amenable  to  the  state  cor- 
poration laws  of  other  states  in  the  union,  but 
still  we  do  not  recollect  seeing  anything  on  the 
subject  of  the  Texas  corporation  law  excepting 
this  particular  opinion  to  which  we  make  refer- 
ence. 


107 

Kindly  let  us  know  if  we  are  right  in  assum- 
ing that  we  are  not  in  any  way  amenable  to  the 
Texas  state  law,  taking  into  account  that  we  have 
no  office  and  carry  no  stock  in  Texas,  and  that  we 
do  all  business  from  Chicago,  simply  selling 
goods  through  resident  and  traveling  representa- 
tives in  that  State." 

I  assume  that  the  orders  taken  by  the  traveling  or 
resident  salesmen  in  Texas  are  made  subject  to  the 
approval  of  the  home  office  here. 

Under  this  state  of  facts,  I  am  of  the  opinion  that 
the  business  transacted  by  the  company  in  Texas  con- 
stitutes interstate  commerce,  and  the  company  is  there- 
fore under  no  obligation  to  comply  with  the  Texas 
statutes  in  relation  to  foreign  corporations. 


THE  RIGHT  OF  A  RAILROAD  COMPANY  TO  CHARGE  STORAGE 
ON  FREIGHT  AND  DUTY  TO  NOTIFY  CONSIGNEES  OF  AR- 
RIVAL OF  FREIGHT. 

(Boos  Mfg.  Co.,  Dec.  30,  1902.) 
"We  wish  to  be  advised  whether  counsel  for 
the  association  has  passed  upon  the  subject  of 
storage  charges,  which  under  a  recent  rule  are 
made  by  the  various  railroad  lines  entering  Chi- 
cago on  small  freight  shipments,  if  not  removed 
from  their  freight  houses  within  a  stipulated  time. 
We  have  a  number  of  times  been  victimized  under 
this  new  rule  but  have  apparently  no  recourse 
except  to  pay. 

The  question,  it  appears,  depends  largely  upon 
the  obligation  of  the  railroad  companies  to  no- 
tify consignees  of  the  arrival  of  freight.  We 
believe  it  is  claimed  on  their  side  that  no  such 
obligation  exists.  If  this  is  true,  we  cannot  un- 
derstand how  consignees  are  to  be  made  aware  of 
the  arrival  of  freight  which  when  shipped,  we  will 
say  from  New  York  for  instance,  is  liable  to  be  in 
transit  anywhere  from  three  days  to  three 
weeks. 


108 

In  the  particular  cases  we  have  in  mind  the 
company  claims  to  have  sent  us  notice  in  the  usual 
way  by  mail;  we  claim  that  no  such  notices  were 
received.  The  freight  in  question  lay  at  one  of 
the  freight  houses  here  for  weeks.  In  the  mean- 
tune  we  were  in  correspondence  with  the  shipper, 
wanting  to  know  what  had  become  of  the  goods, 
until  they  were  finally  discovered  by  a  mere  acci- 
dent and  before  we  could  get  possession,  we  were 
obliged  to  pay  an  exorbitant  rate  for  four  weeks' 
storage.  As  there  are  several  concerns  in  Chi- 
cago of  a  name  similar  to  ours,  and  as  clerks  in 
railroad  offices  are  notoriously  careless  in  writing 
addresses,  leaving  out  numbers  and  streets  in 
most  cases  and  misspelling  names  in  others,  it 
is  more  than  likely  that  such  notices,  if  they  were 
sent,  were  miscarried.  We  have  trouble  of  this 
sort  continually. 

Aside  from  the  obligation  to  notify  consignee, 
it  looks  reasonable  that  railroad  lines  entering 
Chicago  should  extend  to  their  patrons  the  same 
facilities  for  doing  business  that  is  done  by  these 
same  lines  in  other  cities.  We  have  in  mind,  for 
instance,  a  railroad  company  that  is  building  a 
warehouse  in  Minneapolis  for  the  accommodation 
of  merchants,  allowing  them  to  store  goods  for 
practically  an  indefinite  time  without  cost,  and 
this  same  company  enforces  the  new  rule  rig- 
idly in  Chicago.  Why  this  discrimination  against 
Chicago?" 

The  rule  is  well  settled  in  this  state  that  in  the 
absence  of  a  special  agreement,  a  railroad  company 
is  under  no  obligation  to  notify  the  consignee  of  the 
arrival  of  freight.  The  duty  of  the  railroad  company, 
as  a  carrier,  ceases  upon  the  storage  of  the  goods  in  a 
safe  and  suitable  warehouse,  and  the  company  is  liable 
thereafter  only  as  a  warehouseman.  The  liability  of 
a  carrier  is  that  of  an  insurer,  while  the  warehouse- 
man is  bound  only  to  use  reasonable  care  and  dili- 
gence for  the  preservation  of  the  property.  It  is  the 
duty  of  the  consignee  to  receive  the  goods  upon  their 


109 

arrival  at  their  destination,  and  if  he  is  not  ready  to 
do  so,  it  is  the  duty  of  the  carrier  to  safely  store  the 
goods. 

R.  R.  Co.  v.  Scott,  42  111.,  132. 

R.  R.  Co.  v.  Alexander,  20  111.,  29. 

Porter  v.  R.  R.  Co.,  20  111.,  407. 

Trams.  Co.  v.  Hallack,  64  111.,  284. 

Cah  v.  R.  R.  Co.,  71  111.,  96. 

After  the  delivery  of  the  goods  at  the  warehouse, 
the  company  has  the  right  to  charge  a  reasonable  com- 
pensation for  its  services,  and  it  may  retain  the  goods 
until  the  charges  have  been  paid. 

R.  R.  Co.  v.  Alexander,  20  111.,  24. 
The  rule  that  the  carrier  is  under  no  obligation  to 
give  notice  to  the  consignee  of  the  arrival  of  freight, 
does  not  apply  where  there  is  a  well  established  cus- 
tom on  the  part  of  the  railroad  company  to  give  notice 
to  the  consignee  upon  the  arrival  of  freight.  The  cus- 
tom, however,  must  be  generally  known  and  well  es- 
tablished and  uniformly  acquiesced  in  for  such  a 
length  of  time  that  it  must  be  considered  that  the  par- 
ties contracted  with  reference  to  it,  and  made  it  a  part 
of  their  contract. 

The  question  as  to  what  are  " reasonable"  charges 
and  as  to  whether  or  not  the  railroad  company  may 
charge  storage  in  one  locality  and  not  in  another,  de- 
pends upon  the  facts  and  circumstances  existing  in 
each  particular  case.  The  railroad  company  must 
treat  all  persons  similarly  situated  without  discrimina- 
tion. Conditions  may  exist,  however,  in  one  locality, 
which  are  absent  in  another,  which  may  furnish  a 
basis  for  discrimination  as  to  charges  or  facilities. 


NOTE: — For  later  opinion  on  this  same  subject,  see  opinion  of  May 
31,  1907,  in  answer  to  query  of  Federal  Electric  Company  (opin.  1907). 
—Ed. 


110 


RIGHT  OF   SHIPPERS   TO   COMBINE  THEIR   SHIPMENTS   TO   OB- 
TAIN CARLOAD  RATES. 

(Wilder  &  Co.,  December  31,  1902.) 
"Our  firm  is  very  much  interested  in  the  opin- 
ion of  Mr.  Levy  Mayer  in  regard  to  several  ship- 
pers combining  in  consigning  a  carload  to  one 
destination  in  order  to  secure  carload  rates.  On 
the  last  page  of  Mr.  Mayer's  reply  we  would  call 
attention  to  this  paragraph: 

'Irrespective  of  contract  between  the  carrier 
and  shipper  it  is  the  duty  of  the  carrier  to  safely 
carry  and  deliver,  and  for  any  breach  of  this 
duty  or  for  any  loss  by  the  owner  the  carrier 
might,  therefore,  be  subjected  to  as  many  actions 
as  there  are  owners  of  goods  in  the  car,  and  such 
actions  might  be  in  as  many  different  jurisdic- 
tions.' 

If  the  B-L  is  issued  to  Wilder  &  Company,  of 
Chicago,  for  one  carload  of  upper  leather  and  is 
shipped  to  Grey,  Clark  &  Engle,  of  Boston, 
Mass.,  how  can  either  the  R.  E.  Co.  or  the  courts 
go  behind  Wilder  &  Company's  ownership  of 
this  car  of  goods'?  Therefore,  how  could  any 
suit  for  damages  be  brought  other  than  by  Wilder 
&  Company  against  the  R.  R.  Co.  ? 

Inasmuch  as  this  question  is  of  vital  import- 
ance to  a  large  number  of  shippers  in  Chicago, 
and  many  of  whom  are  members  of  the  Illinois 
Manufacturers'  Association,  we  would  respect- 
fully request  that  further  action  be  taken  in  the 
matter,  as  in  our  judgment  it  should  not  rest  in 
favor  of  the  R.  R.  Cos.  upon  the  sole  decision  of 
Judge  Kohlsaat." 

When  rendering  my  former  opinion  I  had  in  mind 
the  very  question  now  suggested  by  Wilder  &  Co., 
and  that  was  one  of  the  arguments  made  in  the  case 
before  Judge  Kohlsaat.  The  railroad  companies  con- 
tended that  if  several  individuals  combined  to  obtain 
a  carload  rate  and  their  goods  are  lost  or  damaged, 


Ill 

separate  actions  could  be  maintained  by  each  owner 
irrespective  of  the  fact  whether  the  owners  had  ex- 
press contracts  with  the  railroad  companies  or  not; 
that  the  apparent  shipper  would  be  in  fact  the  agent 
of  the  other  shippers,  and  that  each  principal  would 
have  a  separate  right  of  action.  This  reasoning  was 
sustained  by  Judge  Kohlsaat  and  it  was  one  of  the 
grounds  for  his  defeating  the  contention  of  the  ship- 
pers. 

I  am  familiar  with  the  facts  and  the  arguments  in 
the  case  before  Judge  Kohlsaat,  because  one  of  my 
firm  participated  as  counsel  for  the  shippers. 

The  question  whether  shippers  so  combining  are 
entitled  to  carload  rates  is  not  free  from  doubt,  but 
as  I  have  already  indicated  there  is  but  one  decision 
squarely  upon  the  subject  in  this  country,  and  that  is 
the  one  rendered  by  Judge  Kohlsaat. 

It  may  not  be  inadvisable  to  make  up  a  test  case  in 
another  Federal  circuit,  or  before  Judge  Grosscup, 
and  then  carry  the  matter,  if  necessary,  to  the  upper 
court  for  final  review.  It  is  needless  to  say  that  to 
such  a  case  the  leading  railroad  companies  in  the 
United  States  would  make  practically  a  united  defense, 
in  view  of  the  serious  consequences  of  an  adverse  de- 
cision. 

It  is  for  the  Board  of  Directors  of  the  Associa- 
tion to  determine  whether  it  should  take  up  the  matter, 
and,  if  so,  whether  it  should  take  it  up  at  its  sole  ex- 
pense or  merely  by  way  of  co-operation  and  contribu- 
tion to  those  of  its  members  who  are  particularly  in- 
terested. 


NOTE: — See  note  to  opinion  of  Nov.  6,  1902,  to  Skandia  Furniture 
Co.— Ed. 

RIGHT  OF  LANDLORD  TO  COLLECT  FIRE  INSURANCE  WHERE 
TENANT  KEEPS  GASOLINE  ON  PREMISES  IN  VIOLATION  OF 
POLICY. 

(Illinois  Manufacturers'  Association,  Dec.  31,  1902.) 

"I  am  requested  by  the  Board  of  Directors  to 

ask  you  in  how  far  our  members  are  affected  by 


112 

the  recent  decision  of  the  Supreme  Court  in  what 
is   known  as   the   Thuringia   Insurance   decision. 
Some  of  our  members  are  of  the  impression  that 
the  owner  of  a  building  will  not  be  paid  insur- 
ance if  the  tenant  has  not  conformed  to  his  insur- 
ance policy,  in  the  event  the  building  burns." 
The  decision  in  question  is  that  of  Thuringia  Insur- 
ance Co.  v.  Norwaysz,  decided  by  the  Appellate  Court 
for  this  district  December  16,  1902,    (104  111.  App., 
390),  the  opinion  being  rendered  by  Judge  Freeman. 
In  that  case,  the  plaintiff  procured  from  the  defendant 
insurance  company,  a  policy  of  insurance  on  a  house 
of  which  he  was  the  owner.     The  policy  contained  a 
clause   providing   that   the   keeping   of  gasoline   and 
other  similar  articles  on  the  premises,  rendered  the 
policy  void.    The  premises  in  question  were  occupied 
by  a  tenant  of  the  plaintiff.    The  tenant,  without  the 
knowledge  of  the  landlord,  kept  a  five-gallon  can  of 
gasoline  on  the  premises.   A  fire  occurred,  and  an  ac- 
tion was  instituted  by  the  owner  against  the  insur- 
ance company  to  recover  for  the  loss.   The  court  held 
that  the  act  of  the  tenant  avoided  the  policy,  and  that 
the  plaintiff  was  bound  by  the  acts  of  his  tenant,  and 
therefore  could  not  recover. 


NOTE: — The  decision  of  the  Appellate  Court  was  afterwards  affirmed 
by  the  Supreme  Court  of  Illinois.     See  204  111.,  334. — Ed. 


VALIDITY  OF  ASSIGNMENT  OF  UNEARNED   WAGES. 

(U.  S.  Wind  Engine  &  Pump  Co.,  Dec.  31, 1902.) 

"Under  date  of  Nov.  24th.  we  received  a  letter 
from  Card  &  Eacutt,  of  86  La  Salle  St.,  Chicago, 
as  follows: 

'This  is  to  give  you  legal  notice  that  we  hold 
an  assignment  of  wages  of  C.  C.  Hamble,  an  em- 
ploye of  your  company.  Kindly  protect  our  inter- 
ests in  this  matter,  and  oblige.' 

This  is  all  the  information  we  have  received 
from  them;  it  came  in  a  registered  envelope. 

We  asked  Mr.  Hamble  if  he  had  ever  given 


113 

them  an  assignment  of  his  wages.  He  said  he  did 
so  when  he  was  working  for  the  C.  &  N.  W.  E.  B. 
As  he  has  been  with  us  over  a  year,  it  must  of 
course  be  longer  even  than  that  since  he  gave  the 
assignment. 

Under  the  circumstances  and  without  any  evi- 
dence, except  the  bare  assertion  of  these  people, 
are  we  under  obligations  to  keep  back  this  man's 
money  I ' ' 

An  employe  has  the  undoubted  right  to  assign  his 
unearned  wages,  but  such  assignment  is  not  operative 
unless  made  under,  a  subsisting  contract  of  employ- 
ment. That  is  to  say,  if  the  assignment  in  question 
was  made  by  the  employe  while  in  the  service  of  a 
former  employer,  the  assignment  is  without  efficacy. 
I  advise  that  the  company  ask  to  see  a  copy  of  the 
assignment  and  if  from  an  inspection  it  appears  that 
it  was  given  while  the  employe  was  in  the  service  of 
another  employer,  the  notice  can  safely  be  disre- 
garded. 


PROPOSED  LAW  TO   COMPEL  LABOR  UNIONS  TO  INCORPORATE. 

(Illinois  Manufacturers'  Association,  Jan.  2,  1903.) 
I  have  your  communication  asking  for  an  opinion 
as  to  the  constitutionality  of  the  proposed  law  to  com- 
pel labor  unions  to  incorporate. 

A  corporation  exists  as  such  only  by  virtue  of  a 
grant  from  the  State,  and  the  acceptance  of  such  grant 
by  the  persons  composing  the  corporation.  No  one 
can  be  compelled  to  accept  such  a  grant,  nor  be  com- 
pelled to  become  a  member  of  the  corporation  against 
his  will.  To  compel  labor  unions  to  incorporate  is 
to  compel  individuals  composing  the  union  to  become 
members  of  a  corporation,  and  to  assume  the  burdens 
and  responsibilities  of  that  relation  without  their 
consent,  or  to  prohibit  such  members  from  voluntarily 
associating  themselves  together  for  a  lawful  pur- 
pose. It  is  not  within  the  province  of  the  legislature 
to  say  to  a  person,  "You  cannot  join  a  union  unless 


114 

that  union  is  incorporated."  That  would  be  equiva- 
lent to  saying  that  a  person  desiring  to  become  a  mem- 
ber of  a  labor  union  has  to  become  a  member  of  the 
corporation,  or  cease  to  be  a  "union"  laborer.  Such 
persons  would  thus  be  prevented  from  pursuing  a 
lawful  purpose,  and  would  be  deprived  of  a  right  to 
assemble  together  for  a  purpose  not  in  violation  of 
law.  The  proposed  law  would  interfere  with  the  lib- 
erty of  the  citizen,  the  right  of  lawful  assembly,  and 
the  freedom  of  contract.  This  view  is  supported  by 
authorities.  Chancellor  Kent,  in  his  Commentaries 
(Vol.  2,  p.  277),  says: 

"It   requires   the   acceptance   of  a   charter   to 
create    a    corporate    body;    for    the    government 
cannot    compel   persons    to    become    an   incorpo- 
rated body  without  their  consent,  or  the  consent 
of  at  least  a  major  part  of  them. ' ' 
In  Mason  v.  Finch,  28  Mich.,  282,  the  Supreme  Court 
of  Michigan  laid  down  the  law  as  follows : 

"It  would  not  be  competent  for  the  legislature 
*  *  *  to  compel  any  person  or  society  to  become 
incorporated  without  its  consent. ' ' 
In  Hampshire  v.  Franklin,  16  Mass.,  76,  87,  the  Su- 
preme Court  of  Massachusetts  said : 

' '  No  man  can  be  compelled  by  the  legislature  to 
become  a  member  of  a  corporation  without  his  con- 
sent. ' ' 

See  also  Angell  &  Ames  on  Corporations  (llth  Ed.), 
Sees.  31,  81,  86. 

Again  the  proposed  law,  if  applicable  only  to 
"labor  unions"  and  not  to  all  other  unincorporated 
associations  similarly  situated,  would  probably  vio- 
late the  constitutional  inhibition  against  "class  legis- 
lation." There  is  nothing  in  the  nature  of  a  "labor 
union"  which  requires  special  regulation,  which  does 
not  equally  apply  to  other  unincorporated  associa- 
tions. The  members  of  a  labor  union  are  joined 
together  in  furtherance  of  a  common  enterprise,  in 
which  the  public  at  large  is  not  directly  interested  or 
concerned.  If  the  public  is  affected,  it  is  only  indi- 
rectly. Such  union,  therefore,  is  not  a  public  asso- 


115 

/ 

elation  in  the  same  sense  that  it  is  subject  to  public 
regulation  and  control. 

I  have  heretofore,  on  April  12,  1902,  given  an  opin- 
ion to  the  Association  that  the  members  of  a  labor 
union  are  legally  responsible  for  damages  caused  by 
an  illegal  boycott.  The  compulsory  incorporation  of  a 
labor  union  would  not  make  the  members  of  the  asso- 
ciation any  more  responsible  than  they  are  at  present, 
except  in  so  far  as  the  corporation  might  possess  prop- 
erty. The  creation  of  a  corporation  not  for  pecuniary 
profit  does  not  and  would  not  ordinarily  create  any 
more  financial  responsibility  than  now  exists  on  the 
part  of  the  individuals  who  would  constitute  the  cor- 
poration. 

For  the  reasons  above  stated,  I  am  of  the  opinion 
that  the  proposed  law,  if  enacted,  would  be  unconsti- 
tutional. Even  if  the  law  were  constitutional,  I  do 
not  believe  it  would  accomplish  the  purpose  for  which 
it  would  be  designed.  If  a  law  could  be  devised  to 
compel  the  formation  of  such  corporations,  it  would 
soon  be  discovered  that  such  corporations  could  readily 
avoid  accumulating  or  possessing  any  property. 

DUTY  OF  EXPRESS  COMPANIES  TO  DELIVER  PACKAGES  WITH- 
OUT  ADDITIONAL   COST   TO    CONSIGNEE. 

(Cole  Mfg.  Co.,  Jan.  8, 1903.) 
"The  different  express  companies  are  in  the 
habit  of  turning  a  large  portion  of  their  express 
over  to  Brink's  Express  Co.  for  delivery  and 
Brink's  charge  for  delivering  from  down  town  to 
consignee's  place  of  business  is  often  greater  than 
the  express  company's  charge. 

As  an  example  of  this,  we  have  just  received 
a  small  package  weighing  four  ounces  consigned 
to  the  writer  by  the  Acme  Sign  Printing  Co., 
Dayton,  Ohio,  via  Adams  Express,  charges  pre- 
paid. The  Adams  Express  Co.  turned  this  pack- 
age over  to  Brink's.  They  have  delivered  the 
package  to  us  and  have  collected  20  cents  charges 
for  doing  so.  We  receive  prepaid  express  every 


118 

few  days  which  is  turned  over  to  Brink's  for 
delivery  to  us  by  the  express  companies,  on  which 
Brink's  charges  amount  to  as  much  as  the  entire 
express  charges  should  be. 

We  are  located  at  3218  So.  Western  Ave.,  and 
it  seems  to  us  that  all  express  companies  should 
deliver  packages  with  their  own  teams;  or,  if  by 
Brink's,  without  any  additional  charge  to  con- 
signee at  this  distance  from  their  downtown 
offices." 

In  the  absence  of  an  express  agreement  to  the  con- 
trary, it  is  the  duty  of  an  express  company,  to  whom 
goods  are  delivered  for  transportation,  to  make  an 
actual  personal  delivery  to  the  consignee  at  his  resi- 
dence or  place  of  business,  and  in  no  other  way  can 
the  express  company  discharge  itself  of  its  respon- 
sibility as  a  common  carrier,  unless  performance  has 
been  prevented  by  the  act  of  God  or  the  public  enemy. 
This  rule  does  not  apply  at  unimportant  way  stations 
where  the  business  of  the  express  company  is  so 
small  as  not  to  justify  the  employment  of  messen- 
gers or  delivery  wagons,  and  at  which  place  a  long 
continued  usage  has  dispensed  with  personal  delivery 
and  in  reference  to  which  usage  it  must  be  supposed 
the  parties  contracted.  In  such  a  case,  however, 
prompt  notice  must  be  given  to  the  consignee  of  the 
arrival  of  the  goods. 

If  the  goods  in  question  were  delivered  charges  pre- 
paid to  the  express  company,  addressed  to  the  Cole 
Mfg.  Co.,  the  consignee,  under  a  contract  to  deliver  the 
same  to  that  company,  it  was  the  duty  of  the  express 
company  to  deliver  the  package  at  the  place  of  busi- 
ness of  the  consignee  without  any  additional  charge  to 
the  consignee.  In  such  case  the  express  company  can- 
not deliver  the  goods  to  a  local  company  and  impose 
the  cost  of  personal  delivery  upon  the  consignee.  This 
is  the  general  rule  of  law  applicable.  Whether  there 
is  some  peculiar  rule  or  fact  in  this  case  between  the 
express  company  and  the  consignor,  will  depend  upon 
the  contractual  arrangements  between  them.  I  have 
not  been  furnished  with  a  copy  of  such  contract,  if 


117 

i 

one  exists,  nor  with  a  copy  of  the  bill  of  lading  or 
express  receipt. 

In  support  of  this  opinion,  see  the  following  au- 
thorities : 

Hutchinson  on  Carriers,  Sees.  379-382. 
Baldwin  v.   American  Express   Co.,  23   111., 

197. 
Am.  Merchants  Express  Co.  v.  Schier,  55  111., 

140. 
American  Express   Co.   v.  Baldwin,   26  111., 

504. 

Gulliver  v.  Adams  Express  Co.,  38  111.,  502. 
Am.  Merchants  Union  Ex.  Co.  v.  Wolf,  79  111., 

430. 
Am.  Express  Co.  v.  Wettstein,  28  111.  App., 

96. 
12  Am.  &  Eng.  Ency.  of  Law  (2nd  Ed.),  p. 

553. 

Unless  there  are  some  peculiar  facts  in  this  case,  not 
submitted  to  me,  the  Cole  Mfg.  Co.  is  legally  entitled 
to  a  return  of  the  twenty  cents. 


NOTE: — It  has  since  been  held  in  Bullard  v.  Express  Co.,  107  Mich., 
695,  that  an  express  company  may,  so  long  as  the  public  have  notice 
of  the  custom  and  the  company  acts  in  good  faith  and  with  regard  to 
the  public  requirements,  establish  limits  in  a  city  beyond  which  its 
agents  cannot  be  required  to  go  to  make  delivery;  and  a  person  dealing 
with  the  company  with  knowledge  that  such  limits  exist  cannot  compel 
the  company  to  go  beyond  them  to  make  a  delivery  to  him.  See,  also, 
Vol.  II  Hutchinson  on  Carriers,  3  ed.,  Sec.  717. — Ed. 

I  r 

AS  TO  WHETHEE  SALE  OF  SAMPLES  BY  FOREIGN  CORPORATION 
CONSTITUTES  INTERSTATE  COMMERCE 

(Illinois  Manufacturers'  Association,  Jan.  20,  1903.) 
"I  have  been  requested  to  submit  the  following 
statement  of  facts  to  you  for  an  opinion:  'We 
are  a  corporation:  Suppose  we  have  a  sample 
room  either  in  Texas  or  Colorado,  sell  goods  from 
there  and  deliver  them  from  Chicago,  and,  in  ad- 
dition, semi-annually  sell  off  our  samples,  to  be 
delivered  from  the  sample  room,  but  the  bill  for 
which  is  rendered  from  Chicago.  Does  that 


118 

bring  us  under  any  law  of  these  States,  so  we 
would  be  obliged  to  pay  taxes  for  doing  business 
in  those  States!'  Kindly  advise  me  as  to  what 
reply  to  make. ' ' 

If  the  company  in  question  would  eliminate  from  its 
method  of  doing  business  the  semi-annual  sale  of  the 
samples,  I  would  be  of  the  opinion  that  it  was  engaged 
in  interstate  commerce,  and  therefore  not  subject  to 
the  foreign  corporation  laws  of  other  States. 

The  precise  question  as  to  whether  the  sale  of  sam- 
ples in  the  method  above  set  forth  constitutes  "doing 
business"  has  not,  so  far  as  I  am  aware,  ever  been 
passed  upon  by  the  courts.  Mere  single  and  isolated 
transactions  do  not  constitute  l  i  doing  business ' '  where 
there  is  no  present  intention  to  carry  on  business  in 
the  future.  If,  however,  periodical  sales  are  made 
of  the  samples  situated  in  the  foreign  State,  and  it  is 
intended  to  make  such  periodical  sales  in  the  future, 
the  question  is  a  more  difficult  one. 

The  transaction  is  extremely  close  to  the  border  line 
which  divides  interstate  commerce  from  that  which  is 
intra-state,  or  domestic,  and  in  the  absence  of  judicial 
interpretation  I  would  not  regard  it  as  entirely  safe 
to  disregard  the  requirements  of  the  foreign  corpo- 
ration law.  If  the  periodical  sale  of  the  samples  be 
dispensed  with,  the  business  would  be  interstate  com- 
merce. If  the  profits  derived  from  the  sale  of  the 
samples  do  not  equal  the  expense  of  complying  with 
the  foreign  corporation  law,  the  course  to  be  pursued 
would  seem  clear. 

THE  BONUS  ACT  OF  PENNSYLVANIA  AND  WHETHER  IT  IS  AP- 
PLICABLE TO  CORPORATIONS  TAKING  ORDERS  BY  TRAVEL- 
ING SALESMEN  SUBJECT  TO  THE  APPROVAL  OF  THE  HOME 
OFFICE. 

(Steele-Wedeles  Co.,  Jan.  20,  1903.) 
"We  are  in  receipt  to-day  of  the  enclosed  let- 
ter from  the  Auditor  General  of  Pennsylvania, 
which  is  in  answer  to  ours  of  the  17th  ult.     Will 
you  kindly  advise  us  if  in  your  opinion  we  can 


119 

make  such  an  affidavit  as  we  are  requested  to 
make  therein?  Please  understand  that  we  do  not 
maintain  an  office  or  a  branch  store  in  Pennsyl- 
vania. Our  traveling  salesman  occasionally 
takes  an  order  there,  which  is  approved  by  our 
Chiago  office,  and  the  goods  are  shipped  from 
here." 

The  affidavit  demanded  by  the  Secretary  of  State 
is  provided  for  in  the  so-called  Bonus  Act  of  Penn- 
sylvania, passed  May  8,  1901.  On  October  7,  1901,  I 
gave  an  opinion  to  your  Association,  at  the  request 
of  The  N.  K.  Fairbank  Company,  to  the  effect  that 
that  Act  was  constitutional.  The  Act  in  question  im- 
poses a  tax  upon  the  amount  of  property  of  all  foreign 
corporations  located  or  employed  wholly  within  the 
State  of  Pennsylvania,  i.  e.,  upon  the  property  which 
the  corporation  owns  or  possesses  in  Pennsylvania 
for  the  purpose  of  carrying  on  its  business.  The  Act, 
however,  only  applies  to  such  corporations  as  are 
engaged  in  business  within  the  limits  of  the  State  of 
Pennsylvania,  and  cannot  be  held  to  apply  to  such 
corporations  as  are  engaged  solely  in  interstate 
commerce. 

From  the  statement  of  Steele-Wedeles  Co.  I  take 
it  that  the  only  business  transacted  by  that  company 
in  Pennsylvania  is  transacted  through  the  medium 
of  traveling  salesmen,  who  take  orders  subject  to  the 
approval  of  the  home  office  in  Chicago,  where  the  or- 
ders are  filled  and  the  goods  shipped.  If  this  assump- 
tion is  correct,  I  am  of  the  opinion  that  the  Steele- 
Wedeles  Co.  is  engaged  in  interstate  commerce  and 
therefore  is  under  no  obligation  to  make  the  affidavit 
in  question. 

EFFECT  OF  CANCELLATION  OF  CHAETEB  OF  ILLINOIS  CORPO- 
RATION   FOR   FAILURE   TO   FILE   ANNUAL   REPORT. 

(Illinois  Manufacturers'  Association,  March  23,  1903.) 
"Where  a  charter  has  been  canceled  under  the 
Act  Approved  April  21,  1899,  for  failure  to  make 
report,  what  procedure  would  you  advise? 


120 

Is  the  question  of  constitutionality  now  before 
the  Supreme  Court  for  decision? 

How  does  the  forfeiture  of  the  charter  affect 
the  standing  of  a  corporation  if  called  to  appear 
in  court  to  collect  accounts  or  defend  its  rights? 

Has  the  Secretary  of  State  offered  any  oppor- 
tunity for  delayed  reports  to  be  received  to  avoid 
the  forfeiture?" 

The  matter  is  covered  by  my  opinions  to  the  Asso- 
ciation under  dates  of  October  22,  1900,  November  6, 
1901,  and  September  19, 1902.  In  those  opinions  it  was 
stated  that  I  deemed  it  beyond  the  powers  of  the  Sec- 
retary of  State,  without  judicial  proceedings,  to  cancel 
the  charter  of  a  corporation  for  a  failure  to  file  an 
annual  report. 

The  attempted  cancellation  of  a  charter  of  any  cor- 
poration by  the  Secretary  of  State,  I  think,  is  of  no 
effect  and  would  not  prevent  such  corporation  from 
suing  or  defending  in  the  courts. 

The  law  was  amended  May  10,  1901,  in  force  July  1, 
1901  (Session  Laws  of  1901,  p.  115).  Section  7  of  the 
law,  as  amended,  provides : 

"That  any  corporation  which  is  pursuing  an 
active  business  under  its  charter,  failing  to  make 
said  report  at  the  time  provided  by  law  may,  at 
any  time,  within  one  year  from  such  default,  be 
reinstated  upon  the  records  in  the  office  of  the 
Secretary  of  State,  upon  the  payment  of  a  fee  in 
the  sum  of  twenty  dollars  for  such  reinstatement 
and  filing  in  said  office  an  affidavit  stating  all  the 
facts  required  in  section  three  (two)  of  this  Act, 
and  in  addition  thereto,  the  fact  that  it  was  at  the 
time  of  such  default  and  still  is  engaged  in  active 
business  under  its  charter." 

In  view  of  the  fact  that  the  fee  is  only  one  dollar 
for  filing  the  affidavit,  I  have  heretofore  advised,  and 
again  advise,  that  the  affidavit  should  be  filed.  The 
Secretary  of  State  is,  under  the  amendment  of  1901, 
according  delinquents  the  opportunity,  upon  payment 
of  $20,  of  being  reinstated  upon  his  records. 

The  question  under  consideration  is  now  pending  in 


121 

the  Supreme  Court  of  Illinois  and  a  decision  is  ex- 
pested  shortly. 


NOTE:— See  note  to  opinion  of  Oct.  22,  1900,  to  111.  Mfrs.  Ass'n. — 
Ed. 


THE  TRANSFERABILITY  OF  MILEAGE  TICKETS  AND  EIGHT  OF 
RAILROAD  COMPANY  TO  TAKE  UP  THE  SAME  FOR  MIS- 
USER. 

(Adam  J.  Press  Co.,  March  23,  1903.) 

I  have  your  favor  enclosing  communication  from 
Adam  J.  Press  Co.  That  company  states  that  it  has 
purchased  from  a  railroad  company  for  one  of  its 
traveling  salesmen  a  two  thousand  mile  ticket;  that 
such  ticket  was  issued  to  the  traveling  salesman  by 
name ;  that  an  attempt  was  made  by  another  salesman 
of  the  company  to  use  the  ticket  and  thereupon  it  was 
taken  up  by  the  railroad  company.  My  opinion  is 
asked  as  to  whether  or  not  the  ticket  in  question  can 
rightfully  be  used  by  a  person  other  than  the  one  to 
whom  it  was  issued  and  whether  or  not  the  railroad 
company  is  obligated  to  redeem  the  part  of  the  ticket 
which  is  unused. 

The  conditions  printed  on  the  ticket,  or  the  rules  and 
regulations  of  the  railroad  company  are  not  stated.  A 
railroad  company  has  the  right  to  restrict  the  use  of 
the  ticket  to  the  original  purchaser,  where  a  reduction 
is  made  from  regular  rates,  as  in  the  case  of  mileage 
tickets.  The  words  "not  transferable"  or  similar 
words,  will  have  that  effect,  and  a  third  party  can 
acquire  no  rights  by  virtue  of  such  ticket.  The  mile- 
age ticket,  therefore,  issued  to  a  salesman  by  name  can 
only  by  used  by  that  person.  Whether  or  not  the  com- 
pany has  the  right  to  take  up  the  ticket  in  the  hands 
of  a  person  not  entitled  to  use  the  same,  or  has  merely 
the  right  to  refuse  to  accept  it,  depends  upon  the  con- 
ditions upon  the  ticket  and  the  rules  of  the  company. 
As  a  general  rule  the  company  has  the  right  to  forfeit 
the  ticket. 


122 

Hutchinson  on  Carriers,  2d  ed.,  Sec.  580  d. 

25  Ency.  of  Law  (2nd  Ed.),  p.  1091. 
It  is  made  the  duty  of  the  railroad  company  by  stat- 
ute in  this  State  (Rev.  Stat.,  Chap.  114,  Sec.  116)  to 
provide  for  the  redemption  of  unused  tickets. 


WHETHER  AN  ILLINOIS  CORPORATION  IS  SUBJECT  TO  TAXA- 
TION IN  THE  STATE  OF  NEW  YORK  ON  A  BANK  DEPOSIT 
CARRIED  IN  NEW  YORK  CITY. 

(Parlin  &  Orendorff  Co.,  March  24,  1903.) 
"As  a  member  of  the  Illinois  Mfg.  Assn.  we 
wish  to  ask  if  we  are  subject  to  taxation  in  the 
State  of  New  York  on  a  bank  deposit  carried  in 
New  York  City.  We  are  notified  of  an  assess- 
ment on  personal  property.  We  do  no  business 
within  the  State  of  New  York,  carrying  no  stock, 
accepting  no  orders,  but  confining  ourselves  out- 
side of  banking  to  the  strictly  interstate  com- 
merce. ' ' 

I  cannot  tell  from  the  facts  stated  under  what  par- 
ticular law  of  New  York  the  assessment  is  levied  or 
what  the  assessment  is  upon.  A  state  has  no  right  to 
tax  a  foreign  corporation  upon  its  business  or  fran- 
chises where  such  corporation  is  engaged  solely  in 
interstate  commerce,  nor  can  a  tax  be  levied  in  such 
a  case  upon  the  capital  employed  by  such  a  corpora- 
tion within  the  state. 

A  state,  however,  has  the  right  to  levy  a  tax  upon 
property  having  a  situs  within  the  state,  even  though 
the  business  of  such  corporation  is  exclusively  inter- 
state commerce.  Money  in  bank  is  not  property  in  the 
sense  of  having  a  situs  at  the  place  where  the  bank  is 
located.  The  relation  between  the  bank  and  the  de- 
positor is  that  of  debtor  and  creditor,  the  money  de- 
posited belongs  to  the  bank,  and  the  banker  is  like  any 
ordinary  person  so  far  as  the  question  under  consid- 
eration is  concerned. 

The  situs  of  debts  follows  the  place  of  residence 
of  the  creditor.  If,  therefore,  a  depositor  living  in 


123 

Illinois  has  money  on  deposit  to  his  credit  at  a  bank 
in  New  York,  such  credit  is  subject  to  taxation  in  Illi- 
nois, but  not  in  New  York. 

Railroad  Company  v.  Pennsylvania,  15  Wall., 
300,  and  cases  cited  in  Vol.  7,  Rose's  Notes 
toll.  S.  Eep.'s,  p.  894. 
City  v.  Mackey,  22  Fed.,  602. 
Insurance  Co.  v.  Board  of  Assessors  (La.),  16 

L.  E.  A.,  56,  and  45  L.  E.  A.,  524. 
25  Ency.  of  Law,  (2d  ed.),  p.  146. 
Eorer  on  Interstate  Law,  pp.  277-8. 
People  v.  Commissioners,  23  N.  Y.,  224. 


THE  FOREIGN  CORPORATION  LAW  OF  COLORADO. 

(J.  W.  Sefton  Mfg.  Co.  and  Edwards-Stanwood  Shoe 

Co.,  March  24,  1903.) 

I  have  your  favor  enclosing  correspondence  with 
J.  W.  Sefton  Mfg.  Co.  and  Edwards-Stanwood  Shoe 
Co.,  and  also  correspondence  between  those  companies 
and  Samuel  S.  Large,  an  attorney  of  Denver,  with  ref- 
erence to  the  foreign  corporation  law  of  Colorado. 

The  Colorado  Act  of  April  6,  1901,  provides  that  a 
foreign  corporation  shall  not — 

"have  or  exercise  any  corporate  powers  or  hold 
or  acquire  any  real  or  personal  property,  fran- 
chises, right  or  privileges,  or  be  permitted  to  do 
any  business,  or  prosecute  or  defend  in  any  suit  in 
this  State,  until  the  said  fees  shall  have  been 
paid. ' ' 
Mr.  Large  says : 

"Our  trial  courts  have  already  determined  that 
the  words  'prosecute  or  defend  in  any  suit  in  this 
State'  mean  literally,  that  a  foreign  corporation 
cannot  maintain  a  suit  whether  it  is  doing  business 
in  Colorado  or  not,  nor  can  it  defend  in  a  suit 
brought  against  it,  whether  the  right  of  action  ac- 
crued prior  to  April  6th,  1901,  or  not,  without  first 
taking  out  a  charter.  In  other  words,  the  question 
of  inter-state  commerce  is  eliminated  entirely,  and 


124 

this  Act  practically  puts  a  tax  upon  the  right  of  a 
foreign  corporation  to  maintain  a  suit  here, 
whether  it  has  been  doing,  or  intends  to  do,  any 
business  here  or  not." 

As  stated  in  my  letter  of  October  8,  1901,  and  Jan- 
uary 15,  1902,  and  in  numerous  other  opinions  ren- 
dered to  your  Association,  the  provision  of  the  Colo- 
rado statute  as  to  the  maintenance  of  suits,  is  appli- 
cable only  to  corporations  "doing  business"  in  the 
State.  If  it  is  so  construed  as  to  prohibit  corporations 
engaged  solely  in  inter-state  commerce  from  instituting 
or  defending  suits  in  Colorado,  it. would  be  a  direct 
interference  with  interstate  commerce,  and  therefore, 
in  my  opinion,  unconstitutional.  If  it  is  beyond  the 
power  of  the  State  to  declare  invalid  contracts  made 
by  a  foreign  corporation,  which  are  transactions  in 
interstate  commerce,  then  the  prevention  of  the  en- 
forcement of  said  contracts  is  equally  beyond  its 
power.  To  permit  this  to  be  done  would  render  nuga- 
tory the  protection  afforded  by  the  constitution. 

No  State  has  the  right  to  interfere  with  inter- 
state commerce.  The  laws  of  a  State  cannot  override 
the  Federal  Constitution.  Therefore,  it  is  impossible 
that  "the  question  of  interstate  commerce  is  elimi- 
nated entirely,"  as  this  is  beyond  the  power  of  the 
State.  While  a  State  has  the  undoubted  right  to  ex- 
clude a  foreign  corporation  from  doing  business  within 
its  domain,  it  cannot  exclude  a  corporation  from 
engaging  in  interstate  commerce.  In  the  conduct  of 
such  business  such  corporations  are  entitled  to  the 
protection  of  the  State  laws  and  a  denial  of  such  pro- 
tection is  a  denial  of  the  equal  protection  of  the  laws, 
contrary  to  the  14th  amendment  of  the  Constitution  of 
the  United  States. 

In  McNaughton  v.  McGirl,  49  Pac.  Eep.,  651  (Mont.), 

the  court  in  speaking  of  the  effect  of  a  State  statute 

upon  a  contract  made  without  the  State  by  a  foreign 

corporation  engaged  in  the  interstate  commerce  said: 

"No  construction  can  be  put  upon  the  Statute 

of  Montana  which  would  render  such  a  contract 

void  without  invading  the  exclusive  right  of  Con- 


125 

gress.  If,  therefore,  this  contract  sued  on  was 
lawfully  made,  notwithstanding  a  statute  which 
declares  or  attempts  to  declare  it  void,  it  follows 
that  any  legislation  of  the  State  which  seeks  to 
prevent  the  enforcement  of  the  contract  is  equally 
an  invasion  of  the  exclusive  right  of  Congress.  It 
must  be  true  that  if  the  State  cannot  declare  the 
contract  void,  it  cannot  prevent  the  enforcement 
of  the  contract." 

In  Prentice  &  Egan  on  the  Commerce  Clause  of  the 
Constitution,  192,  it  is  said: 

1 '  A  State  can  no  more  exclude  from  its  territory 
a  corporation  engaged  in  foreign  interstate  com- 
merce than  it  can  exclude  an  individual  so  en- 
gaged." 
See,  also, 

Cooper  Mfg.  Co.  v.  Ferguson,  113  U.  S.,  727, 
and  notes  to  same  in  Vol.  10,  Rose's  Notes 
to  the  U.  S.  Reports,  p.  1023. 
Prentice  &  Egan  on  the  Commerce  Clause  of 

the  Constitution,  pp.  177,  195. 
Haldy  v.  Tomoor  Co.,  4  Ohio  Dec.,  118,  and 

cases  cited 

Bateman  v.  Western  Co.,  20  S.  W.,  931  (Tex.), 
and  the  authorities  referred  to  in  my  prior 
opinions. 

It  is  not  at  all  unlikely  that  the  lower  courts,  and 
possibly  even  the  Supreme  Court  of  Colorado,  may 
hold  that  a  corporation  engaged  solely  in  interstate 
commerce  cannot  prosecute  or  defend  any  suit  in  Colo- 
rado, but  in  my  opinion  such  rulings  will  not  be  sus- 
tained by  the  Federal  Courts. 


NOTE: — See   note   to   opinion   of   July   20,   1901,   to   Challenge   Ma- 
chinery  Co. — Ed. 


126 


THE  STATUTE  OF  INDIANA  IN  RELATION  TO  REAL  ESTATE 
HELD  JOINTLY  BY  HUSBAND  AND  WIFE  AND  WHETHER  THE 
SAME  IS  SUBJECT  TO  THE  SEPARATE  DEBTS  OF  EITHER 
OF  THEM. 

(J.  W.  Sefton  Mfg.  Co.,  March  24,  1903.) 
"Please  favor  us  by  having  Mr.  Levy  Mayer, 
attorney,  pass  on  the  correctness  of  the  enclosed 
statement  in  letter  from  W.  H.  Hickman,  attorney, 
Muncie,  Indiana,  in  reference  to  the  law  concern- 
ing real  estate  when  held  jointly  by  husband  and 
wife,  if  it  cannot  be  reached  for  separate  debts  of 
either. ' ' 

The  letter  of  Mr.  Hickman,  on  which  an  opinion  is 
asked,  is  as  follows : 

"Rea   Riggin,    aged   31,   married,    operated   a 
Garden  &  Floral  business  about  3  or  4  miles  north 
of  Muncie,  and  has  been  in  the  business,  as  we  are 
advised,  about  one  year.    Riggin  and  wife  jointly 
own  a  farm  of  40  acres,  but  under  the  law  of  In- 
diana, real  estate  held  jointly  by  husband  and  wife 
cannot  be  reached  for  separate  debts  of  either  the 
husband  or  the  wife.    Riggin  is  said  to  be  a  man 
of  good  habits,  and  from  all  we  can  learn  of  him, 
he  is  entitled  to  reasonable  credit." 
An  execution  creditor  of  the  husband,  and  the  sheriff 
holding  the  execution,  may  be  enjoined  by  the  husband 
and  wife  from  levying  upon  and  selling  real  estate 
held  by  them  as  tenants  by  entireties. 

Hulet  et  al.  v.  Inlow  et  ux.,  57  Ind.,  412. 
In  Chandler  v.  Cheney,  37  Ind.,  391,  two  propositions 
are  decided,  as  follows: 

"1.  A  husband  and  wife,  though  not  thus  de- 
scribed in  a  deed  of  conveyance  of  real  estate-  exe- 
cuted by  them,  take  under  such  deed  as  tenants  by 
entireties. 

2.  While  such  an  estate  exists,  no  interest  in  it 
can  be  sold  on  execution  for  the  debts  of  the  hus- 
band or  wife,  but  the  conveyance  creating  it  may 
be  set  aside  for  fraud." 


127 

In  the  same  case  the  Supreme  Court  of  Indiana  said : 
"It  is  a  well  settled  rule  at  common  law,  that  the 
same  form  of  words,  which,  if  the  grantees  were 
unmarried,  would  have  constituted  them  joint  ten- 
ants, will,  they  being  husband  and  wife,  make 
them  tenants  by  the  entirety.  The  rule  has  been 
changed  by  our  statute  above  quoted.  It  requires 
that  the  intention  to  create  a  joint  tenancy  shall 
either  be  expressly  declared,  or  it  must  manifestly 
appear  from  the  tenor  of  the  instrument.  But  a 
conveyance  to  a  man  and  woman,  who  are  then 
husband  and  wife,  creates  an  estate  by  entirety. 
The  same  difference  which  existed  at  common  law 
between  joint  tenants  and  tenants  by  entireties 
continues  to  exist  under  our  statute.  In  both,  the 
title  and  estate  are  joint,  and  each  has  the  quality 
of  survivorship,  but  the  marked  difference  between 
the  two  consists  in  this:  that  in  a  joint  tenancy, 
either  tenant  may  convey  his  share  to  a  co-tenant, 
or  even  to  a  stranger,  who  thereby  becomes  ten- 
ant in  common  with  the  other  co-tenant;  while 
neither  tenant  by  the  entirety  can  convey  his  or 
her  share  so  as  to  affect  their  joint  use  of  the 
property  during  their  joint  lives,  or  to  defeat  the 
right  of  survivorship  upon  the  death  of  either  of 
the  co-tenants;  and  there  may  be  a  partition  be- 
tween joint  tenants,  while  there  can  be  none  be- 
tween tenants  by  entireties." 

In  Bevins  et  al.  v.  Cline's  Admr.,  21  Ind.,  37,  the 
Supreme  Court  said: 

"At  common  law,  if  a  conveyance  be  made 
jointly  to  a  man  and  woman,  who  are  not  married, 
they  take  by  moieties,  as  joint  tenants,  and  either 
can  sever  such  joint  tenancy  by  a  conveyance  of 
his  or  her  moiety;  but  if  a  conveyance  of  land  be 
made  to  a  man  and  woman,  who  are  then  hus- 
band and  wife,  they  take  as  joint  tenants  by  en- 
tireties, not  by  moieties ;  they  are  seized  per  tout 
and  not  per  my.  Each,  as  well  as  both,  is  entitled 
to  the  use  of  the  whole.  Neither  can  sever  the 
joint  estate  by  his  own  act,  as  he  can  in  case  of 


128 

an  ordinary  joint  tenancy,  but  both  must  unite  in 

the  deed  to  effect  a  conveyance  of  an  estate  in  any 

part  of  the  whole.   2  Black.,  supra.  In  the  case  of 

Stucky  v.  Keefe's  Ex'rs,,  2  Casey  (26  Penn.  St. 

Eep.),  397,  decided  in  1856,  the  authorities  on  this 

point  are  collected.    Nor,  it  would  seem,  could  the 

separate  interest  of  either  be  sold  on  execution. 

Indeed,  there  is  no  separate  interest." 

In  Arnold  et  at.  v.  Arnold,  30  Ind.,  p.  305,  the  court 

re-affirmed  the  ruling  in  Davis  v.  Clark,  26  Ind.,  424, 

where  it  was  held  that : 

"At  common  law,  if  an  estate  is  granted,  as  in 
this  case,  to  a  man  and  his  wife,  they  are  neither 
properly  joint  tenants  nor  tenants  in  common ;  for 
husband  and  wife  being  considered  one  person  in 
law,  they  cannot  take  the  estate  by  moieties.  Both 
are  seized  by  the  entirety,  per  tout  and  not  per  my. 
Neither  can  dispose  of  any  part  of  the  estate 
without  the  assent  of  the  other,  but  the  whole  must 
remain  to  the  survivor." 

The  doctrine  is  the  same  where  real  estate  is  con- 
veyed to  a  husband  and  wife,  and  another  person 
jointly;  the  husband  and  wife  will  take  an  undivided 
one-half  of  the  premises,  as  tenants  by  entireties. 

Anderson  v.  Tannehill,  42  Ind.,  141. 
In  Patton,  Admr.,  et  al.  v.  Rankin  et  al.,  68  Ind.,  245, 
the  court  held: 

"We  now  decide  that  a  crop,  raised  on  land  held 
by  husband  and  wife  by  entireties,  is  held  by  them 
in  the  same  manner  and  subject  to  the  same  law 
as  the  land  itself ;  and  such  crop  is,  therefore,  not 
subject  to  levy  and  sale  on  an  execution  against 
the  husband." 

In  Carver  et  al.  v.  Smith  et  ux.,  90  Ind.,  pp.  222- 
224,  the  court  said : 

"This  court  has  always  held  that  upon  a  deed 

to  husband  and  wife,  they  can  take  by  entireties, 

and  that  during  their  joint  lives  there  can  be  no 

sale  of  any  part  on  an  execution  against  either." 

In  Wilken  et  al.  v.  Young  et  al.,  41  N.  E.  Rep.,  68, 

the  Supreme  Court  of  Indiana  said : 


129 

''In  this  state  a  joint  tenancy  can  only  be  cre- 
ated as  provided  by  section  3341,  Eev.  St.,  1894 
(section  2922,  Eev.  St.,  1881).  Where  lands  are 
conveyed  to  husband  and  wife,  and  there  are  no 
words  of  limitation  in  the  deed,  or  where  it  does 
not  manifestly  appear  from  the  tenor  thereof  that 
it  was  intended  to  create  an  estate  in  joint  tenancy, 
they  will  take  as  tenants  by  entirety.  (Hadlock 
v.  Gray,  104  Ind.,  596;  4  N.  E.,  167,  and  authori- 
ties there  cited.)  It  is  equally  well  settled  that 
the  general  rule  controlling  in  a  conveyance  of 
real  estate  to  husband  and  wife  may  be  defeated 
by  conditions,  limitations  or  stipulations  in  the 
instrument  of  conveyance,  when  they  clearly  indi-* 
cate  an  intention  of  the  grantor  to  create  in  the 
grantees  a  different  estate.  A  joint  tenancy  may 
be  created  to  exist  between  husband  and  wife  by 
the  express  terms  of  the  tenor  of  the  deed  of  con- 
veyance. Thornburg  v.  Wiggins,  135  Ind.,  178; 
34  N.  E.,  999,  and  authorities  there  cited." 

In  Thornburg  v.  Wiggins,  supra,  it  is  held : 

"Where  the  granting  clause  of  a  deed  is  as  fol- 
lows: 'This  indenture  witnesseth  that  Lemual 
Wiggins  and  Mary  Wiggins,  his  wife,  of  Ran- 
dolph county,  in  the  State  of  Indiana,  convey  and 
warrant  to  Daniel  S.  Wiggins  and  Laura  Belle 
Wiggins,  his  wife,  in  joint  tenancy,'  etc.,  such  a 
conveyance  makes  the  husband  and  wife  joint  ten- 
ants and  not  tenants  by  the  entirety,  and  the  in- 
terest of  each  as  joint  tenants  of  the  land,  is  sub- 
ject to  execution  which  would  not  be  so  if  they 
held  the  land  as  tenants  by  the  entirety." 

In  Carver  et  al.  v.  Smith  et  ux.,  90  Ind.,  223,  it  was 
held  that: 

"Tenancy  by  entirety  was  not  abolished,  nor 
the  statute  recognizing  it,  R.  S.  1881,  section  2923, 
repealed  by  the  act  of  1881,  enlarging  the  rights 
of  married  women.  R.  S.  1881,  section  5115,  et 
seq." 

Under  the  authorities  above  cited,  if  the  joint  es- 
tate held  by  a  husband  and  wife  is  a  tenancy  by  en- 


130 

tireties,  it  is  not  subject  to  levy  and  sale  upon  execu- 
tion for  the  debts  of  either  husband  or  wife,  if  the 
joint  estate  is  a  joint  tenancy,  a  contrary  rule  applies. 
A  joint  tenancy  to  husband  and  wife  during  coverture,, 
however,  can  only  be  created,  under  the  Indiana  stat- 
ute, by  express  words  in  the  deed  of  conveyance. 


THE  EIGHT  OF  A  COMPANY  TO  USE  A  CORPORATE  NAME  WHEN 
NOT  INCORPORATED  AND  THE  EFFECT  THEREOF. 

(Art  Bedstead  Co.,  April  3,  1903.) 
"We  read  Mr.  Mayer's  opinion  on  the  pro- 
posed law  to  compel  labor  unions  to  incorporate. 
We  notice  he  quotes  in  the  support  of  his  opin- 
ion, Chancellor  Kent,  in  his  Commentaries  (Vol. 
2,  p.  277) :  'It  requires  the  acceptance  of  a  char- 
ter to  create  a  corporate  body;  for  the  govern- 
ment cannot  compel  persons  to  become  an  incor- 
porated body  without  their  consent ;  or  the  consent 
of  at  least  a  major  part  of  them.'  In  view  of  this 
authority  we  think  we  are  not  obliged  to  incor- 
porate. (We  are  not  an  incorporated  company.) 
At  the  same  time,  we  know  we  are  liable  to  a  fine 
if  we  are  not  incorporated.  Is  the  law  constitu- 
tional! We  think  it  has  been  successfully  fought 
but  at  the  same  time,  we  write  to  learn  to  be 
sure  on  the  point." 
It  also  states: 

"The  state  has  never  made  any  effort  to  en- 
force us  to  incorporate. ' ' 

As  I  stated  in  the  opinion  above  referred  to,  it  is 
beyond  the  power  of  a  state  to  compel  any  person 
or  body  of  persons  engaged  in  a  private  enterprise,  to 
become  a  body  corporate.  The  state,  however,  has 
the  undoubted  right  to  prevent  any  persons  from  hold- 
ing themselves  out  to  the  world  as  a  corporation  when 
in  fact  they  are  not  so.  The  words,  "Art  Bedstead 
Company,"  import  the  name  of  a  corporation.  The 
words  "Association,"  "Company,"  or  "Works,"  pre- 
ceded by  other  words,  are  generally  used  as  names  of 


131 

corporations,  and  thus  the  use  of  such  words  implies 
a  corporate  name.  A  copartnership  can  have  no  prop- 
erty in  a  name  importing  the  name  of  a  corporation, 
as  a  trade  name  cannot  be  acquired  in  a  name  calcu- 
lated to  deceive. 

Clark  v.  Aetna  Iron  Works,  44  111.  App.,  510. 
Supreme  Lodge  v.  Tuhlke,  30  111.  App.,  98. 
Kriz  v.  Rod  Pokrok,  46  111.  App.,  418. 
In  the  absence  of  a  restrictive  statute,  the  name 
and  style  of  a  partnership  is  wholly  conventional,  and 
a  firm  may  adopt  any  name  it  sees  fit.    The  statute  of 
Illinois  provides  as  follows: 

"If  any  company,  association  or  person  puts 
forth  any  sign,  or  advertisement,  and  therein  as- 
sumes, for,  the  purposes  of  soliciting  business,  a 
corporate  name,  not  being  incorporated,  or,  being 
incorporated,  puts  forth  any  sign  or  advertise- 
ment assuming  any  other  or  different  name  than 
that  by  which  it  is  incorporated,  or  authorized  by 
law  to  act,  such  company,  association  or  person 
shall  be  fined  not  less  than  ten  dollars  nor  more 
than  two  hundred  dollars,  and  a  like  sum  for 
each  day  he  or  it  shall  continue  to  offend,  after 
having  been  once  fined. ' ' 

The  Appellate  Court  of  this  district  in  Edgerton  v. 
Preston,  15  111.  App.,  23,  in  construing  this  statute, 
said: 

"The  mere  assumption  of  a  name  appropriate 
for  a  corporation  would  be  no  violation  of  the 
statute ;  nor  would  the  putting  forth  of  a  sign  of 
advertisement  in  which  the  corporate  name  is 
assumed,  if  not  done  for  the  purpose  of  soliciting 
business,  constitute  such  violation.  It  is  the  pur- 
pose for  which  the  act  is  done  that  gives  char- 
acter to  the  act.  What  the  legislature  had  in  view 
in  enacting  this  section  of  the  Criminal  Code  man- 
ifestly was  to  prevent  persons  from  obtaining  a 
fictitious  credit  by  advertising  themselves  as  be- 
ing a  corporation  when  they  were  not  incorpo- 
rated. ' ' 
The  use  of  the  corporate  name  must,  therefore,  be 


132 

for  the  purpose  of  soliciting  business.  If  the  name 
is  so  used,  the  liability  under  the  statute  attaches.  This 
law  is  undoubtedly  constitutional. 

WHETHER  A  TELEPHONE  COMPANY  IS  OBLIGATED  TO  FUR- 
NISH A  PARTICULAR  CLASS  OF  SERVICE  WHICH  IT  FOR- 
MERLY MAINTAINED,  BUT  WHICH  IT  HAS  ABANDONED  EX- 
CEPT TO  CARRY  OUT  EXISTING  CONTRACTS. 

(E.  T.  Mason  &  Co.,  April  3,  1903.) 
"We  have  been  using  the  telephone  service  for 
a  good  many  years  and  as  we  sold  out  the  bulk  of 
our  business  a  couple  of  years  since,  we  find  that 
we  are  not  requiring  the  use  thereof  to  the  extent 
as  formerly.    We  have  consequently  made  appli- 
cation for  a  limited  service  of  600  calls,  which  we 
know  that  the  Telephone  Co.  is  making  for  the 
sum  of  $60.00  per  year,  they  say  that  they  are  not 
making  any  new  contracts  for  less  than  $75.00  per 
year  for  600  calls,  but  do  not  deny  that  they  still 
have  some  in  existence  at  that  former  price.  Now, 
we  claim  we  are  entitled  to  the  $60.00  just  as  long 
as  they  have  any  contracts  still  in  force  and  until 
the  expiration  of  any  such  contracts.     Will  you 
kindly  enlighten  us  in  the  matter." 
There  is  no  obligation  imposed  on  the  Telephone 
Company  by  the  ordinance  of  the  City  of  Chicago, 
under   which    the   Telephone    Company    operates,    to 
furnish  "limited  call"  service.     The  Telephone  Com- 
pany, therefore,  in  the  absence  of  contract,  cannot  be 
compelled  to  furnish  such  service.    A  telephone  com- 
pany is  a  public  service  corporation,  and  must  serve  all 
the  public  upon  the  same  terms,  and  without  unjust 
discrimination.    It  cannot,  therefore,  furnish  one  kind 
or  class  of  service  to  one  individual  and  refuse  the 
same  service  for  the  same  price  to  another  similarly 
situated.      If,    therefore,    it    continues    to    furnish    a 
"limited  call"  service  to  one  party,  it  must  furnish  to 
all  and  upon  the  same  terms.     The  Telephone  Com- 
pany has  the  right,  however,  in  good  faith  to  change 
the  price  for  a  class  of  service  which  it  is  not  obligated 


133 

by  law  or  by  contract  to  furnish.  If,  therefore,  it 
chooses  to  abandon  the  ''limited  call"  service,  or  to 
raise  the  price,  it  may  do  so,  provided  the  price  be 
raised  as  to  all.  Of  course,  it  cannot  raise  the  price 
under  existing  contracts.  As  to  those,  it  must  wait 
until  the  contracts  have  expired.  If  the  Telephone 
Company  has  really  decided  to  make  the  increase,  then 
the  fact  that  there  are  unexpired  contracts  for  the  par- 
ticular service  does  not  obligate  the  Telephone  Com- 
pany to  furnish  the  service  during  the  continuance  of 
such  contracts,  provided  no  new  contracts  have  been 
made  since  the  discontinuance  of  the  particular 
schedule. 

NECESSITY    OF    FILING    ANTI-TKUST    AFFIDAVITS    ANNUALLY. 

(Allen  B.  Wrisley  Company,  April  3,  1903.) 

' '  Replying  to  your  circular  of  the  12th  inst.,  we 
would  say  that  we  filed  the  necessary  affidavit  ac- 
companied by  $1.00  on  January  10th,  1902,  in  pay- 
ment for  any  liability  we  might  have  incurred 
during  the  year  1901,  but  we  have  made  no  pay- 
ment as  yet  for  the  year  1902  in  this  present  year. 
Do  you  understand  that  it  will  now  be  necessary 
for  us  to  file  an  affidavit  to  the  effect  that  we  are 
not  a  member  or  party  to  any  agreement,  etc.,  for 
regulating  the  price  of  merchandise  covering  our 
acts  during  the  year  1902?" 

The  law  (Act  of  June  20,  1893,  Laws  of  1893,  p.  89) 
provides  that: 

"It  shall  be  the  duty  of  the  Secretary  of  State, 
on  or  about  the  first  day  of  September  of  each 
year  to  address  to     *     *     *     each     *     *          in- 
corporated company     *  *     a  letter  of  inquiry 
and  to  require  an  answer  under  oath     *  *." 
The  answer  to  the  inquiry  must  be  made  within 
thirty  days  from  the  mailing  of  such  letter  of  inquiry. 
Under  the  provisions  of  this  law,  the  affidavit  in 
question  must  therefore  be  made  each  year,  and  when- 
ever a  letter  of  inquiry  is  received  from  the  Secretary 
of  State. 


134 


LIABILITY  OF   THE   STATE  FOE   HOUSES   KILLED   BY  ORDER   OF 
THE   STATE  BOARD   OF   LIVESTOCK    COMMISSIONERS. 

(Allen  B.  Wrisley  Co.,  April  7,  1903.) 
' l  Has  any  opinion  been  rendered  by  the  general 
counsel  of  the  association  regarding  the  present 
law  of  the  State  of  Illinois  concerning  the  com- 
pensation to  be  paid  for  horses  killed  by  order  of 
the  State!  As  we  understand  it,  the  State  only 
assumes  one-third  of  the  value  of  the  horse  they 
order  killed  and  yet  limit  the  value  arbitrarily  to 
$100,  no  matter  how  valuable  the  horse  may  be. 

Are  we  correctly  informed  in  this  matter  and  is 

this  act  considered  constitutional?" 

There  is  no  law  in  this  State  under  which  the  State 

assumes  one-third  of  the  value  of  the  horse  ordered 

killed.     The  Illinois  law  providing  for  compensation 

for  the  killing  of  horses  by  order  of  the  State  Board 

of  Livestock  Commissioners  is  contained  in  Sections 

48  and  55,  Chapter  8  (pp.  154,  156)  Hurd's  Revised 

Statute    of   Illinois,    and    was    passed    in    1885    and 

amended  in  1887.    It  provides  thus: 

"When  the  Board,  upon  the  written  report  of 
the  State  Veterinarian,  .or  any  of  his  assistants, 
determine  that  any  animal  is  affected  with,  or  has 
been  exposed  to  any  dangerously  contagious  or 
infectious  disease,  the  Board,  or  any  member 
thereof,  may  agree  with  the  owner  upon  the 
value  of  such  animal  or  property,  and  in  case  such 
agreement  cannot  be  made,  said  Board,  or  the 
member  acting  in  behalf  of  the  Board,  may  ap- 
point three  disinterested  citizens  of  the  State  to 
appraise  such  diseased  animal  or  exposed  ani- 
mals or  property.  Such  appraisers  shall  sub- 
scribe to  an  oath,  in  writing,  to  fairly  value  such 
animal  in  accordance  with  the  requirements  of 
this  act,  which  oath,  together  with  the  valuation 
fixed  by  said  appraisers,  shall  be  filed  with  the 
Board  and  be  preserved  by  them.  Upon  such  ap- 
praisement being  made,  it  shall  become  the  duty 


135 

of  the  owner  to  immediately  destroy  such  animals 
and  dispose  of  the  same  in  accordance  with  the 
order  of  said  Board,  or  member  thereof,  and 
upon  failure  to  do  so,  said  Board,  or  member 
thereof,  shall  cause  such  animal  or  animals  or 
property  to  be  destroyed  and  disposed  of,  and 
thereupon  the  said  owner  shall  forfeit  all  right  to 
receive  the  compensation  allowed  by  said  apprais- 
ers and  provided  for  by  this  act."  (Sec.  48.) 

"All  claims  against  the  State  arising  from  the 
slaughter  of  animals  as  herein  provided  for,  shall 
be  made  to  said  Board  of  Commissioners,  under 
such  rules  and  regulations  as  they  may  prescribe, 
and  it  shall  be  the  duty  of  said  Board  of  Commis- 
sioners to  determine  the  amount  which  shall  be 
paid  in  each  case  on  account  of  animals  so  slaugh- 
tered, which  in  cases  of  animals  of  the 
equine  species,  shall  be  based  on  their  fair  cash 
market  value,  not  to  exceed  $100  per  head,  and  re- 
port the  same   to  the   Governor;   and  the   Gov- 
ernor shall  endorse  thereon  his  order  to  the  State 
Auditor,  who  shall  thereupon  issue  his  warrant  to 
the  State  Treasurer  for  the  same."    (Sec.  55.) 
A  State  may,  in  the  proper  exercise  of  its  police 
power,  authorize  the  destruction  of  such  property  as 
has  become  a  public  nuisance,  as  has  an  unlawful  ex- 
istence, as  is  obnoxious  to  public  health,  public  morals 
or  public  safety,  without  making  any  compensation 
whatsoever  to  the  owner  therefor,  notwithstanding  the 
prohibition  in  Section  1,  Article  14  of  the  amendments 
to  the  Constitution  of  the  United  States,  which  pro- 
vides that  no  State  shall  "deprive  any  person  of  life, 
liberty  or  property  without  due  process  of  law. ' ' 

It  is,  however,  the  actual  existence  of  disease  and 
exposure  thereto,  which,  under  the  Statute,  gives  the 
power  to  destroy,  and  unless  that  fact  exists,  the  kill- 
ing of  the  horses  is  not  an  act  .done  under  the  authority 
of  the  law.  If,  therefore,  the  Board  of  Livestock 
Commissioners  determine  that  contagious  disease  and 
exposure  thereto  do  exist,  and  in  consequence  order 
the  destruction  of  the  animals,  the  burden  is  upon  the 


136 

Board  of  Commissioners  to  establish  affirmatively  the 
actual  existence  of  such  disease  and  exposure.  If  the 
disease  and  exposure  do  not  actually  exist,  the  act  of 
Board  of  Commissioners  cannot  be  justified  un- 
der the  law,  and  the  Commissioners  will  be  personally 
liable  in  damages. 

As  the  State  has  no  authority  under  its  police  power, 
where  contagious  disease  and  exposure  thereto  do  not 
exist,  to  order  the  destruction  of  horses,  the  State  has 
no  power,  in  the  absence  of  such  contagious  disease 
and  exposure,  to  limit  the  amount  that  can  be  recov- 
ered for  the  horses  ordered  killed.  In  other  words,  the 
real  test  is,  do  the  contagious  diseases  and  exposure 
exist?  If  they  do  exist,  a  law  which  made  no  provi- 
sion whatever  for  compensation  would  be  valid.  If 
they  do  not  exist,  then  the  Commissioners  act  at  their 
peril,  and  no  law  can  constitutionally  limit  the  recov- 
ery to  $100. 

In  Pearson  v.  Zehr,  138  111.,  48,  the  Board  of  Live- 
stock Commissioners  of  Illinois  were  held  liable  under 
the  law  of  1885  in  an  action  brought  against  them  for 
damages,  even  though  they  pleaded  that  they  acted  in 
good  faith,  that  there  were  reasonable  grounds  for 
the  belief  that  the  horses  were  diseased  with  glanders 
and  that  others  had  been  exposed  to  that  contagion; 
that  they  made  an  honest  and  careful  investigation,  to 
the  best  of  their  ability,  and  as  a  result  thereof,  deter- 
mined and  decided  that  some  of  the  horses  were  so 
diseased  and  others  had  been  so  exposed.  The  court 
held  the  Board  liable  in  that  case,  notwithstanding- 
such  defense,  it  having  been  proven  on  the  trial  that 
the  contagious  disease  and  exposure  thereto  did  not  in 
fact  exist.  It  will  be  noticed  that  that  suit  was  brought 
against  the  Board  of  Livestock  Commissioners  and  a 
verdict  against  them  upheld. 

The  Constitution  of  this  State  provides,  in  Section 
26  of  Article  IV.,  that 

"The  State  of  Illinois  shall  never  be  made  a 
defendant  in  any  court  of  law  or  equity, ' ' 
and  since  the  adoption  of  the  Eleventh  Amendment 
to  the  Constitution  of  the  United  States,  the  courts 


137 

have  uniformly  held  that  no  State  could  be  sued  by 
a  private  person  or  corporation  in  a  Federal  Court 
without  the  express  consent  of  the  State. 

The  Legislature  of  Illinois  established  in  1877  a 
Commission  of  Claims  before  whom  claims  against  the 
State  in  certain  classes  of  cases  can  be  presented, 
and  if  favorably  adjudicated  by  the  Commission  of 
Claims,  they  report  to  the  Governor  and  the  Governor 
reports  to  the  Legislature  and  the  Legislature  may 
make  an  appropriation  to  meet  such  adjudicated 
claims.  The  question  whether  a  claim  growing  out  of 
the  Statute  under  consideration  would  come  within 
the  jurisdiction  of  the  Commission  of  Claims  of  Illi- 
nois, is  not  now  presented. 

The  members  of  the  State  Board  of  Livestock  Com- 
missioners are,  however,  liable  in  their  individual  ca- 
pacity if  they  order  the  destruction  of  horses  which  in 
fact  are  not  actually  suffering  from  a  contagious  dis- 
ease and  exposure  thereto.  In  such  case  the  measure 
of  liability,  in  my  opinion,  would  not  be  $100  per  horse, 
but  the  market  value  of  each  horse  so  ordered  killed. 

The  question  under  consideration  in  various  phases 
will  be  found  passed  upon  in  the  following,  among 
other  cases: 

Pearson  v.  Zehr,  138  111.,  48. 

Grimes  v.  Eddy  (Sup.  Co.  Mo.),  26  L.  E.  A., 

638,  and  exhaustive  annotation  thereto. 
Miller  v.  Horton  (Sup.  Ct.  Mass.),  10  L.  E. 

A.,  116. 
Newark,  etc.,  Horse  Car  Co.  v.  Hunt,  50  N.  J. 

Law,  308. 
Loesch  v.  Koehler  (Sup.  Ct.  Ind.),  35  L.  E. 

A.,  682. 
Houston  v.  State  (Sup.  Ct.  Wis.),  42  L.  E.  A., 

39. 
Tappen  v.  State,  146  N.  Y.,  44. 


138 


THE    EIGHT   OF   A   RAILROAD   COMPANY   TO    LIMIT    IN    AN    AR- 
BITRARY WAY  THE  VALUATION  ON  SHIPMENTS. 

(W.  H.  Bice,  April  27, 1903.) 
''Kindly  advise  me  if  Mr.  Mayer,  the  attorney 
for  your  association,  has  ever  passed  on  the  ques- 
tion of  limiting  in  an  arbitrary  way  the  valuation 
on  shipments  by  railroads.    In  our  shipments  we 
are  compelled  to  put  on  our  shipping  tickets  for 
shipments  of  marble  the  following :  *  Valuation  re- 
stricted to  40c  per  cubic  foot.'    This,  of  course, 
is  no  value  at  all,  but  it  is  required  by  the  Rail- 
road Kate  Association,  so  we  are  required  to  use 
it.    We  have  made  a  claim  against  the  C.,  B.  &  Q. 
B.  B.  for  breakage  of  marble  amounting  to  about 
$25.00.  They  now  bring  up  this  clause  and  we  are 
compelled  to  allow  it.    We  get  for  our  $25  the  sum 
of  about  $1.25,  which  does  not  seem  reasonable." 
At  common  law  a  common  carrier  of  goods  is  liable, 
in  case  of  their  loss  or  damage,  as  an  insurer.   In  this 
State  a  common  carrier  may,  however,  by  express  con- 
tract limit  its  strict  common  law  liability.    It  may  by 
special  contract  limit  its  liability  to  such  loss  or  dam- 
age as  may  occur  on  its  own  line  of  carriage,  or  against 
loss  by  fire  without  its  fault,  or  against  other  loss  not 
attributable  to  its  negligence,  or  that  of  its  servants. 
It  may  also  require  the  value  of  goods  offered  for 
transportation  to  be  fixed  by  the  shipper  to  protect 
itself  against  fraud  in  case  of  loss.    But  a  common  car- 
rier cannot,  even  by  express  contract,  exempt  itself 
from  liability  resulting  from  gross  negligence  or  wil- 
ful misconduct  committed  by  itself,  or  its  servants  or 
employes;  nor  can  it  limit  its  liability  in  amount  as 
against  damages  resulting  from  such  negligence. 

The  carrier  cannot  fix  arbitrarily  the  value  of  goods 
delivered  to  them  for  transportation  and  thereby  limit 
their  liability  in  case  of  loss.  It  is  liable  for  the  full 
value  of  the  goods. 

The  parties,  however,  for  a  sufficient  consideration, 
may  agree  upon  the  value  of  the  goods  shipped,  and 


139 

this  value  will  control  in  case  the  goods  are  lost.  A 
lower  rate  of  freight  or  something  equivalent  is  a  suf- 
ficient consideration  for  such  a  contract. 

Where,  however,  a  carrier  affords  shippers  no  op- 
portunity to  contract  for  the  transportation  of  freight 
under  its  common  law  liability  as  an  insurer,  but  re- 
ceives it  only  upon  condition  that  its  liability  in  case 
of  loss,  is  restricted  to  a  certain  valuation,  a  contract 
containing  such  restriction  is  void.  The  fact  that  such 
contract  was  entered  into  knowingly  by  a  shipper  and 
without  demand  for  a  different  contract,  makes  no  dif- 
ference. 

Where  there  are  two  rates  for  carrying  goods — one 
if  carried  under  the  common  law  liability  and  the  other 
if  carried  under  a  special  contract  at  a  reduced  rate, 
restricting  the  value  in  case  of  loss,  the  shipper  must 
have  real  freedom  of  choice  in  making  his  selection,  or 
he  will  not  be  bound  by  the  special  contract. 

A  carrier  may  demand  information  as  to  the  value 
of  the  goods  shipped  to  enable  it  to  decide  on  the  com- 
pensation to  be  charged,  and  the  degree  of  care  to  be 
used.  A  limitation  of  liability  where  the  value  is  not 
truly  stated,  will  be  given  effect,  if  such  limitation  is 
reasonable.  Where  a  shipper  places  a  value  on  his 
goods  and  knowingly  enters  into  a  contract  for  their 
shipments  based  on  such  valuation  he  is  bound  by  the 
contract,  and  will  be  restricted  to  such  valuation. 
While  such  a  contract  does  not  absolve  the  carrier 
from  the  exercise  of  reasonable  care,  yet  the  shipper 
cannot  have  his  property  transported  at  a  low  rate 
because  of  such  valuation,  and  in  case  of  loss  compel 
the  carrier  to  pay  more  than  the  valuation  in  the  con- 
tract. 

If,  in  the  present  case,  the  shipper  was  given  no  op- 
portunity to  have  his  goods  shipped,  under  the  com- 
mon law  liability  as  an  insurer,  but  was  obliged  to  ship 
them  under  an  arbitrary  valuation,  the  contract  is  not 
binding  and  such  shipper  can  recover  the  full  value 
of  the  goods. 

In  support  of  the  opinion  see  the  following  author- 
ities : 


140 

5  Ency.  of  Law  (2nd  Ed.),  p.  328. 
C.  &  N.  W.  Ry.  Co.  v.  Chapman,  133  111.,  90. 
C.,  B.  &  Q.  R.  R.  v.  Miller,  79  111.  App.,  473. 
C.  &  N.  W.  Ry.  Co.  v.  Calumet  Stock  Farm 

Co.,  194  111.,  9. 

Adams  Exp.  Co.  v.  Stettaners,  61  111.,  184. 
C.,  R.  1.  P.  R.  R.  v.  Harmon,  12  111.  App.,  54. 
Wabash  Ry.  v.  Brown,  152  111.,  484. 
C.SA.R.R.  v.  Davis,  159  111.,  54. 
Oppenheimer  v.  U.  S.  Exp.  Co.,  69  111.,  62. 


LIABILITY  FOE  CONSPIRACY  OF  THE  MEMBERS  OF  A  COMBI- 
NATION OF  EMPLOYERS  FORMED  FOR  THE  PURPOSE  OF 
BLACKLISTING  STRIKING  EMPLOYES. 

(William  D.  Allen,  May  13,  1903.) 
"Let  us  suppose  that  a  dozen  firms  in  the  wood 
working  business  got  together  and  formed  an  as- 
sociation of  manufacturers;  that  they  elected  and 
paid  a  secretary,  and  that  there  was  a  strike  in  the 
factory  of  some  of  the  members  of  the  Association. 
We  will  suppose  that  the  Secretary  of  the  Associa- 
tion was  furnished  with  a  list  of  men  out  on  a 
strike  and  that  by  preconcerted  arrangement, 
other  members  of  the  Association  refused  to  hire 
any  of  these  men  on  a  strike;  do  you  think  that 
this  would  render  the  members  of  the  Association 
liable  for  blacklisting?" 

The  question  propounded  involves  two  parts;  one, 
is  there  a  civil  liability,  and  the  other,  is  there  a  crim- 
inal liability?  The  legality  of  an  association  depends 
upon  the  purpose  for  which  it  is  formed.  If  a  criminal 
element  enters  into  the  means  or  objects,  the  result 
would  be  a  criminal  conspiracy.  The  same  acts  may 
constitute  both  a  criminal  and  civil  conspiracy.  The 
crime  of  conspiracy  consists  in  a  combination  of  two 
or  more  persons  to  effect  an  illegal  purpose,  either  by 
legal  or  illegal  means,  or  to  effect  a  legal  purpose  by 
illegal  means. 

In  the  case  of  a  criminal  conspiracy  the  law  pun- 


141 

ishes  as  a  crime  the  mere  agreement  to  effect  an  illegal 
purpose  or,  to  use  illegal  means.  To  sustain  a  civil  lia- 
bility for  a  conspiracy,  the  plaintiff  must  suffer  dam- 
ages. To  sustain  the  charge  of  criminal  conspiracy,  it 
is  not  necessary  to  prove  that  anyone  has  suffered  ac- 
tual damages.  In  this  one  particular  respect,  there- 
fore, a  criminal  conspiracy  might  be  made  out  where  a 
civil  conspiracy  could  not  be  established. 

Different  courts  have  passed  upon  the  legality  of 
associations  formed  for  a  variety  of  purposes  similar 
to  those  covered  by  the  question  under  consideration. 
The  decisions  of  the  courts,  however,  are  not  at  all  har- 
monious. 

I  assume  that  my  opinion  is  asked  not  with  reference 
to  what  the  law  ought  to  be,  but  as  to  what  the  courts 
of  Illinois  would  probably  hold.  No  case  involving 
the  precise  facts  embodied  in  the  question  has  been 
decided  by  either  the  Appellate  or  Supreme  Court  of 
Illinois. 

In  Doremus  v.  Hennessy,  62  App.,  391,  decided  in 
1895,  a  civil  action  was  brought  for  a  conspiracy.  In 
that  case  Mrs.  Hennessy  kept  a  laundry  office  in  Chi- 
cago. She  procured  the  laundering  to  be  done  by  va- 
rious persons  who  were  operating  laundries.  The 
Laundrymen's  Association  demanded  that  she  should 
increase  her  prices.  She  declined.  The  Association 
thereupon  induced  various  parties  who  were  doing  the 
laundering  for  her  to  break  their  contracts  and  not  to 
launder  work  for  her,  and  in  consequence  her  laundry 
agency  was  broken  up  and  ruined.  She  secured  a  judg- 
ment for  $6,000,  which  was  sustained  first  by  the  Ap- 
pellate Court  and  then  by  the  Supreme  Court.  In  176 
111.,  608,  the  Supreme  Court  said: 

"No  persons,  individually  or  by  combination, 
have  the  right  to  directly  or  indirectly  interfere  or 
disturb  another  in  his  lawful  business  or  occupa- 
tion, or  to  threaten  to  do  so,  for  the  sake  of  com- 
pelling him  to  do  some  act  which,  in  his  judg- 
ment, his  own  interest  does  not  require.  Losses 
wilfully  caused  by  another,  from  motives  of  malice, 
to  one  who  seeks  to  exercise  and  enjoy  the  fruits 


142 

and  advantages  of  his  own  enterprise,  industry, 
skill  and  credit,  will  sustain  an  action.  It  is  clear 
that  it  is  unlawful  and  actionable  for  one  man, 
from  unlawful  motives,  to  interfere  with  another's 
trade  by  fraud  or  misrepresentation,  or  by  mo- 
lesting his  customers  or  those  who  would  be  cus- 
tomers, or  by  preventing  others  from  working  for 
him  or  causing  them  to  leave  his  employ  by  fraud 
or  misrepresentation  or  physical  or  moral,  intimi- 
dation or  persuasion,  with  an  intent  to  inflict  an 
injury  which  causes  loss.  * 

Appellant's  and  those  persons  who  refused  to 
do  appellee's  (Mrs.  Hennessy's)  work,  had  each 
a  separate  and  independent  right  to  unite  with  the 
organization  known  as  the  Chicago  Laundrymen's 
Association,  but  they  had  no  right,  separately  or 
in  the  aggregate,  with  others,  to  insist  that  the  ap- 
pellee should  do  so,  or  to  insist  that  appellee  should 
make  her  scale  of  prices  the  same  as  that  fixed  by 
the  association,  and  make  her  refusal  to  do  this 
a  pretext  for  destroying  and  breaking  up  her  busi- 
ness. A  combination  by  them  to  induce  others  not 
to  deal  with  appellee  or  enter  into  contracts  with 
her  or  do  any  further  work  for  her  was  an  action- 
able wrong. ' ' 

In  Jackson  v.  Stan  field  (Ind.),  23  L.  B.  Ann.,  588,  an 
action  was  brought  for  damages  and  for  an  injunction, 
on  the  ground  that  the  defendants  entered  into  an  un- 
lawful combination  to  injure  the  plaintiffs  in  their 
business  as  lumber  merchants.  The  defendants  consti- 
tuted the  "Retail  Lumber  Association  of  Indiana." 
One  of  the  purposes  of  the  association  was  to  with- 
draw the  patronage  of  its  members  from  any  whole- 
saler who  sold  lumber  to  one  who  was  not  a  retailer,  as 
defined  by  the  by-laws  of  the  Association.  The  court 
held  the  Association  unlawful  and  said : 

"A  conspiracy  formed,  and  intended  directly  or 
indirectly  to  prevent  the  carrying  on  of  any  legal 
business  or  to  injure  the  business  of  any  one  by 
wrongfully  preventing  those  who  would  be  custom- 
ers from  buying  anything  from  the  representa- 


143 

tives  of  such  business,  by  threats  or  intimidation, 
is  in  restraint  of  trade  and  unlawful. ' ' 
In  Boutwell  v.  Marr  (Vt.),  43  L.  E.  Ann.,  803,  the 
plaint  iff,  who  was  a  granite  manufacturer,  sued  the 
defendants,  who  were  members  of  the  Granite  Manu- 
facturers' Association.     The  by-laws  of  the  associa- 
tion provided  that  no  member  should  deal  or  do  busi- 
ness with  any  person  dealing  in  granite  not  a  member 
of  the  Association,  under  penalty  of  a  fine. 
The  Supreme  Court  of  Vermont  said : 

"It  is  clear  that  every  one  has  a  right  to  with- 
draw his  own  patronage  when  he  pleases,  but  it  is 
equally  clear  that  he  has  no  right  to  employ  threats 
or  intimidation  to  divert  the  patronage  of  another. 
If  it  be  true  as  a  general  proposition  that  several 
may  lawfully  unite  in  doing  to  another's  injury, 
even  for  the  accomplishment  of  an  unlawful  pur- 
pose, whatever  each  has  a  right  to  do  individually, 
it  by  no  means  follows  that  the  combination  may 
not  be  brought  about  as  to  make  its  united  action 
an  unlawful  means.  The  defendants  insist  that,  as 
members  of  the  association,  they  had  a  right  to  re- 
solve to  keep  their  work  among  themselves,  and 
that,  in  the  absence  of  anything  tending  to  show  an 
attempt  on  their  part  to  influence  the  action  of 
others,  they  cannot  be  held  liable.  It  may  be 
true  that  if  the  defendants,  acting  independently 
of  any  organization,  and  moved  solely  by  similar- 
ity of  interest  and  views,  had  united  in  withdraw- 
ing their  patronage,  the  effect  upon  the  plaintiffs ' 
business  would  have  been  the  same,  and  yet  the  de- 
fendants have  incurred  no  liability.  But,  in  the 
case  supposed,  the  united  action  would  result  from 
the  free  exercise  of  individual  choice.  It  will  be 
seen  upon  further  inquiry  that  this  cannot  be  said 
of  the  action  of  an  organization  like  that  operated 
by  the  defendants." 

It  was  contended  in  the  Vermont  case  that  as  the 
members  of  the  Association  had  voluntarily  assumed 
its  obligation,  there  was  no  coercion  upon  them  to 
withdraw  their  patronage.  The  court  held,  however,  a 


144 

violation  of  the  by-laws  being  punishable  by  a  fine  or 
penalty,  that  this  was  equivalent  to  coercion  of  the 
members  of  the  Association. 

In  Bailey  v.  Plumbers'  Assn.  (Tenn.),  46  L.  E.  Ann., 
561,  the  Supreme  Court  held  that  the  legal  right  of 
each  individual  plumber  to  purchase  supplies  and  ma- 
terials from  any  dealer  or  dealers  he  may  choose,  will 
not  sustain  the  by-laws  of  an  Association  which  permits 
its  members  to  make  purchases  only  from  such  dealers 
as  sell  exclusively  to  members  of  the  Association.  The 
court  said: 

"But,  in  our  opinion,  it  does  not  follow  from  this 
undoubted  freedom  of  individual  member  and  of 
individual  dealer  that  all  the  members  may,  as 
ruled  in  those  cases,  lawfully  enter  into  a  general 
and  unlimited  agreement,  in  the  form  of  by-laws, 
that  they  and  all  of  them  will  make  their  purchases 
from  only  such  dealers  as  will  sell  to  members  ex- 
clusively.   The  premise  does  not  justify  the  con- 
clusion.   The  individual  right  is  radically  different 
from  the  combined  action.     The  combination  has 
hurtful  powers  and  influences  not  possessed  by  the 
individual.     It  threatens  and  impairs  rivalry  in 
trade,  covets  control  in  prices,  seeks  and  obtains 
its  own  advancement  at  the  expense  and  in  the  op- 
pression of  the  public.    The  difference  in  legal  con- 
templation between  individual  right  and  combined 
action  in  trade  is  seen  in  numerous  cases. ' ' 
In  Brown  v.  Jacobs  (Gra.),  57  L.  E.  Ann.,  547,  it  was 
held  that  a  combination  of  mercantile  dealers  which  re- 
quired another  who  was  dealing  in  similar  goods,  to 
sell  at  prices  fixed  by  the  Association,  or  failing  to  sell 
at  such  prices,  to  prevent  its  members  from  selling 
goods  to  him,  was  contrary  to  public  policy  and  void. 

I  have  pointed  out  the  foregoing  illustrated  cases 
from  among  a  considerable  number  holding  the  same 
way.  To  show  the  conflict  that  exists,  I  now  refer  to 
a  few  cases  which  hold  a  contrary  doctrine. 

In  Bohn  v.  Lumbermen's  Assn.  (Minn.),  21  L.  E. 
Ann.,  337,  a  large  number  of  retail  lumber  dealers 
formed  an  association  and  agreed  that  they  would  not 


145 

deal  with  any  manufacturer  or  wholesaler  who  should 
sell  lumber  direct  to  the  consumer,  at  any  point  where 
a  member  of  the  Association  was  carrying  on  a  retail 
yard.  This  case,  it  will  be  noticed,  is  exactly  like 
Jackson  v.  Stanfield,  supra,  decided  by  the  Supreme 
Court  of  Indiana.  The  Minnesota  court,  however,  held 
that  such  an  agreement  did  not  constitute  an  action- 
able conspiracy,  and  said: 

"What  one  man  can  lawfully  do  singly,  two  or 
more  may  lawfully  agree  to  do  jointly.  The  num- 
ber who  unite  to  do  the  act  cannot  change  its  char- 
acter from  lawful  to  unlawful.  The  gist  of  a  pri- 
vate action  for  the  wrongful  act  of  many  is  not 
the  combination  of  conspiracy,  but  the  damage 
done  or  threatened  to  the  plaintiff  by  the  acts  of 
the  defendant.  If  the  act  be  unlawful,  the  com- 
bination of  many  to  commit  it  may  aggravate  the 
injury,  but  it  cannot  change  the  character  of  the 
act." 

In  MacAuley  v.  Tierny  (R.  I.),  37  L.  E.  Ann.,  455, 
the  Supreme  Court  of  Rhode  Island  held  directly  to 
the  contrary  of  the  holding  of  the  Supreme  Court  of 
Tennessee  in  the  case  of  Bailey  v.  Plumbers'  Assn.  of 
Memphis,  referred  to  above.  The  Supreme  Court  of 
Rhode  Island  held  that  notice  by  a  plumbers'  associa- 
tion that  it  will  withdraw  its  patronage  from  wholesale 
dealers  who  sell  to  any  one  not  a  member  of  the  Asso- 
ciation, is  not  unlawful,  although  the  cause  and  excuse 
for  notice  are  the  selfish  purpose  of  the  Association  to 
rid  its  members  of  the  competition  of  those  who  are 
not  members.  The  court  said: 

* '  To  maintain  a  bill  on  the  ground  of  conspiracy, 
it  is  necessary  that  it  should  appear  that  the  ob- 
ject relied  on  as  to  the  basis  of  the  conspiracy,  or 
the  means  used  in  accomplishing  it,  were  unlawful. 
What  a  person  may  lawfully  do,  a  number  of  per- 
sons may  unite  with  him  in  doing,  without  render- 
ing themselves  liable  to  the  charge  of  conspiracy^ 
provided  the  means  employed  be  not  unlawful. 
The  object  of  the  members  of  the  association  was 
to  free  themselves  from  the  competition  of  those 


146 

not  members,  which,  as  we  have  seen,  is  not  un- 
lawful. The  means  taken  to  accomplish  that  ob- 
ject were  the  agreement  among  themselves  not  to 
deal  with  wholesale  dealers  who  sold  to  those  not 
members  of  the  association,  and  the  sending  of 
notices  to  that  end  to  the  wholesalers.  This,  as  we 
have  also  seen,  was  not  unlawful.  Hence  it  follows 
that,  as  the  object  of  the  combination  between 
the  members  of  the  association  was  not  unlawful, 
nor  the  means  adopted  for  its  accomplishment  un- 
lawful, there  is  no  ground  for  the  charge  of  con- 
spiracy, and  the  fact  of  combination  is  wholly  im- 
material. ' ' 

The  doctrine  announced  in  the  Minnesota  and  Rhode 
Island  cases  has  been  expressly  disapproved  in  Jack- 
son v.  Stanfield,  the  Indiana  case;  Bailey  v.  Plumbers' 
Assn.,  the  Tennessee  case,  and  in  Brown  v.  Jacobs,  the 
Georgia  case.  One  line  of  cases  proceeds  upon  the 
theory  that  what  one  may  lawfully  do  as  an  individual 
a  number  may  do  collectively,  through  the  instrumen- 
tality of  association;  while  the  other  line  of  cases 
holds  that  the  individual  act  is  radically  different  from 
the  combined  action.  A  combination  possesses  power 
which  an  individual  does  not.  Many  of  the  courts  have 
therefore  held  that  while  persons  may  lawfully  refuse 
to  deal  or  have  business  relations  with  another,  a  num- 
ber of  persons  cannot  join  together  and  refuse  to  deal 
or  have  business  relations  with  such  person ;  that  such 
person  is  entitled  to  the  exercise  of  individual  freedom 
on  the  part  of  everyone. 

In  Ertz  v.  Produce  Exchange  (Minn.),  48  L.  B.  Ann., 
90,  the  Supreme  Court  of  Minnesota,  on  February  8, 
1900,  that  had  decided  the  Bohn  case  on  July  20,  1893, 
said  of  the  Bohn  case : 

"It  is  to  be  noted  that  the  defendants  in  the 
Bohn  case  had  similar  legitimate  interests  to  pro- 
tect, which  were  menaced  by  the  practice  of  the 
wholesale  dealers  in  selling  lumber  to  contractors 
and  consumers,  and  that  the  defendants '  efforts  to 
induce  parties  not  to  deal  with  offending  wholesale 
dealers  were  limited  to  members  of  the  association 


147 

having  similar  interests  to  conserve,  and  that  there 
was  no  agreement  or  combination  or  attempt  to 
induce  other  persons  not  members  of  the  associa- 
tion to  withhold  their  patronage  from  such  whole- 
sale dealer.    In  this  respect  the  (Bohn)  case  dif- 
fers materially  from  the  one  at  bar,  in  which  the 
complainant  does  not  show  that  the  defendants 
had  any  legitimate  interests  to  protect  by  their  al- 
leged combination.  On  the  contrary,  it  is  expressly 
alleged  in  the   complaint  that  the  combination, 
which  was  carried  into  execution,  was  for  the  sole 
purpose  of  injuring  the  plaintiff's  business,  and 
the  defendants  conspired  to  induce  the  plaintiff's 
patrons  and  persons,  other  than  the  defendants,  to 
refuse  to  deal  with  him.    Such  alleged  acts  on  the 
part  of  the  defendants  are  clearly  unlawful." 
It  will  be  noticed  from  what  is  said  in  Ertz  v.  Prod- 
uce Exchange  that  the  Supreme  Court  of  Minnesota, 
like  one  or  two  other  courts,  attempts  to  make  a  dis- 
tinction in  favor  of  efforts  on  the  part  of  an  Associa- 
tion to  force  their  own  numbers  to  conform  to  their 
views,  and  to  hold  against  the  right  of  an  association 
to  force  others,  who  are  not  members,  to  conform  to 
the  views  of  the  Association.    Other  cases  hold  where 
there  is  no  element  of  coercion,  intimidation  or  op- 
pression on  the  part  of  the  Association  to  enforce  its 
views  or  bylaws,  against  its  members,  that  then  the 
action  of  the  Association  is  merely  voluntary  and  not 
actionable. 

Many  other  cases  which  I  have  examined  might  be 
cited.  They  are  referred  to  in  the  cases  from  which  I 
have  quoted  at  length,  and  also  in  the  annotations  in 
the  Lawyers'  Reports  Annotated.  One  or  two  further 
citations  will,  however,  be  appropriate. 

In  Commonwealth  v.  Carlisle  (Pa.),  Brightly  Rep., 
36,  it  was  held  that  a  combination  of  employers  to  de- 
press the  wages  of  journeymen  below  what  they  would 
be  if  there  had  been  no  recurrence  to  artificial  means, 
was  an  indictable  conspiracy. 

In  Cote  v.  Murphy  (Pa.),  23  L.  R.  Ann.,  135,  it  was 
subsequently  held  by  the  Supreme  Court  of  Pennsyl- 


148 

vania  that  a  combination  of  employers  to  resist  an  ad- 
vance in  wages  determined  upon  by  an  association  of 
employes,  by  refusing  to  sell  any  person  who  concede 
such  advance,  is  not  an  unlawful  conspiracy.  That 
court  held  because  the  Pennsylvania  statute  gives  to 
employes  the  right  to  combine  for  an  advance  in  wages, 
that  by  implication  at  least,  the  employers  ought  to 
have  and  the  court  concedes  them  the  right  to  combine 
to  resist  an  advance  in  wages. 

In  Brewster  v.  Miller's  Sons  (Ky.),  38  L.  R.  Ann., 
505,  the  Supreme  Court  of  Kentucky  held  it  not  unlaw- 
ful for  the  undertakers  of  a  community  to  associate 
themselves  together  and  agree  to  refuse  to  render  serv- 
ices to  one  who  has  refused  or  failed  to  pay  a  bill  due 
to  a  member  of  the  Association. 

To  the  same  effect  see: 

Schulter  v.  Brewing  Co.,  96  Ky.,  224,  and 

Very  v.  Chicago  Live  Stock  Exchange,  54  111.  App., 
233,  where  it  was  held  not  unlawful  to  combine  together 
for  protection  against  dishonest  debtors. 

The  court,  by  Mr.  Justice  Gary,  sententiously  re- 
marks in  an  extremely  brief  opinion : 

"If  he  had  bought  twenty  head  of  cattle  of 
Keenan  &  Sons,  and  did  not  pay  for  them,  the 
members  of  the  department  ought  to  stop  dealing 
with  him,  and  the  defendant  was  right  in  notifying 
its  members  of  the  facts  and  their  duty. ' ' 

In  my  opinion,  the  legal  rules  in  Illinois  which  will 
be  applied  to  cases  of  the  kind  in  question  are  as  fol- 
lows : 

(a)  Persons  may  combine  for  legitimate  purposes, 
such  as  protection   against   dishonest   debtors.     Dis- 
honest or  inefficient  employes  would  be  a  legitimate 
purpose. 

(b)  An  individual  may  refuse  to  deal  with  a  par- 
ticular person  or  class  of  persons,  and  base  such  re- 
fusal upon  mere  whim  or  caprice,  but  a  number  of  per- 
sons cannot  combine  to  do  so,  where  the  object  of  the 
combination  is  to  compel  the  adoption  of  a  certain  scale 
of  price  or  wages,  whether  such  compulsion  is  directed 


149 

to  the  members  of  the  Association  or  to  those  not  mem- 
bers. 

(c)  Wherever    fraud,    intimidation,    force    or    op- 
pression is  used  by  an  association,  its  action  is  unlaw- 
ful.   If  pressure  is  brought  to  bear  on  persons  outside 
of  the  Association,  by  withdrawal  of  patronage  or  other 
means  to  compel  the  outsider  to  conform  to  the  rules  of 
the  Association,  such  action  is  unlawful. 

(d)  Where  a  fine  or  penalty  is  imposed,  on  pain  of 
expulsion,  upon  members  to  compel  them  to  conform 
to  the  rules  or  by-laws  of  the  Association,  this  amounts 
to  coercion  and  the  action  of  the  Association  ceases  to 
be  the  voluntary  action  of  its  individual  members,  and 
if  such  action  of  the  Association  is  otherwise  unlawful, 
the  members  of  the  Association  will  be  liable. 

(e)  Every  person  is  entitled  to  pursue  his  lawful 
trade  or  calling.    That  is  part  of  his  civil  rights.    The 
right  to  labor  is  a  natural  right.    The  employer  has  the 
right  individually  to  refuse  to  hire  any  particular  per- 
son or  class  of  persons,  even  though  such  refusal  is 
based  upon  caprice  or  even  malice.    Employers,  how- 
ever, have  not  the  right  to  combine  together  and  refuse 
to  hire  a  particular  person  or  class  of  persons,  unless 
such  action  is  necessary  to  the  maintenance,  preserva- 
tion or  furtherance  of  the  employers'  legal  rights.    The 
putting  in  operation  of  a  blacklist  is  not  a  legal  right. 
Employers  have  the  right  to  exchange  lists  of  employes 
who  are  discharged  for  inefficiency  or  bad  conduct,  to 
the  same  extent  as  they  would  have  the  right  to  ex- 
change information  as  to  dishonest  debtors,  or  as  to 
devices  or  equipment  which  prove  defective.     Thus, 
railroad  companies  have  the  right  to  exchange  lists  of 
engineers   who    are   afflicted   with   color-blindness    or 
whose  hearing  is  impaired. 

See: 

Hundley  v.  Louisville  Ry.  Co.,  48  S.  W.,  429, 
(decided  by  the  Court  of  Appeals  of  Ken- 
tucky, Dec.  13,  1898). 

(f)  If  employers  go  outside  of  the  bounds  of  self- 
protection  and  agree  not  only  to  furnish  information, 


150 

but  capriciously  not  to  employ  persons  because  they 
have  been  on  a  strike,  such  conduct  would  be  actionable. 
This  because  the  employe  has  the  right  to  peaceably 
strike  in  order  to  better  his  condition  or  advance  his 
wages.  The  blacklisting  of  such  employes  by  an  Asso- 
ciation of  employers,  penalizes  the  right  to  strike.  It 
is  voluntarily  putting  into  motion  of  an  agency  calcu- 
lated to  inflict  an  injury  to  another,  who  stands  in  no 
relation,  contractual  or  otherwise,  with  the  wrong-doer. 
It  is  not  done  for  the  preservation  of  any  right  of  the 
employer,  but  solely  to  injure  the  employe  and  prevent 
him  from  obtaining  employment. 

The  courts  have  almost  uniformly  held  that  employes 
have  the  right  to  combine  and  refuse  to  work  for  one 
who  does  not  employ  union  labor.  This  does  not  con- 
stitute conspiracy  and  is  not  actionable. 

Allen  v.  Flood  (1898),  H.  L.  App.  Gas.,  1. 

Davis  v.  Engineers,  51  N.  Y.  S.,  180. 

Ref.  Club  v.  Laborers,  60  N.  Y.  S.,  388. 

Carson  on  Conspiracy,  pp.  157,  178. 

Carew  v.  Rutherford,  106  Mass.,  13. 

Comm.  v.  Hunt,  4  Mete.,  Ill  (Mass.). 
(g)  It  would  seem  because  laborers  have  the  right 
to  combine  and  refuse  to  work  for  a  man  who  does 
not  employ  union  labor,  or  in  order  to  better  their 
condition  or  advance  their  wages,  that  employers 
ought  to  have  a  co-relative  right  to  combine  and  refuse 
to  employ  any  particular  class  of  men.  It  is  intimated 
by  some  of  the  courts  that  the  rights  of  an  employer 
and  employe  in  this  respect  are  not  synonymous,  and 
that  the  distinction  arises  from  the  nature  of  the  right 
to  labor,  which  is  said  to  be  founded  in  natural  law, 
and  that  the  rights  of  an  employer,  as  such,  depend 
upon  contract;  that  the  combination  of  the  laborer 
is  founded  in  right,  while  that  of  the  employers  is 
founded  in  interest;  that  right  and  interest  are  not 
synonymous. 
See: 

State  v.  Opdyke,  reported  in  Carson  on  Con- 
spiracy, p.  176. 


151 

Mattison  v.  L.  8.  &  M.  S.  Ry.  Co.,  3  Ohio  Dec., 

526. 

Blumenthal  v.  Shaw,  77  Fed.,  954. 
Cogley  on  Strikes  and  Lockouts,  p.  293. 
1  Eddy  on  Combinations,  pp.  501,  506. 
(h)    Blacklisting  is  made  a  crime  by  the  Statutes 
of  Illinois.    Section  96  of  the  Criminal  Code  provides : 
"If  any  two  or  more  persons  conspire  or  agree 
together  *    *   *   for  the  purpose  of  establishing  a 
so-called  boycott  or  blacklist   *        *   they  shall  be 
deemed  guilty  of  a  conspiracy,  and  every  such  of- 
fender, whether  as  individuals  or  as  the  officers 
of  any  society  or  organization,  and  every  person 
convicted  of  conspiracy  at  common  law,  shall  be 
imprisoned  in  the  penitentiary  not  exceeding  five 
years,  or  fined  not  exceeding  $2,000,  or  both." 
Without  entering  upon  a  scientific  discussion  as  to 
why  there  should  be  such  irreconcilable  conflict  be- 
tween the  rules  of  law  applicable  to  employes  and  those 
applicable  to  employers,  it  is  my  conclusion  that  the 
facts  contained  in  the  query  to  which  this  is  a  reply, 
if  properly  proved,  would  constitute  both  a  civil  and 
criminal  offense. 

The  length  of  this  opinion  is  due  largely  to  the  fact 
that  I  have  endeavored  to  answer  a  considerable  num- 
ber of  other  inquiries  which  are  in  line  with  the  par- 
ticular communication  to  which  this  reply  is  ad- 
dressed. 


VALIDITY    OF    A    CONTRACT    BETWEEN    EMPLOYEE    AND    EM- 
PLOYE AND  DAMAGES  FOE  BEEACH  OF  SAME. 

(Kinley  Mfg.  Co.,  May  14, 1903.) 
"We  enclose  herewith  a  memorandum  of  an 
agreement  which  one  of  our  correspondents  makes 
with  employes  entering  their  service.  Will  you 
kindly  refer  this  to  your  attorney  and  ask  him 
if  there  is  anything  in  this  contract  which  would 
not  hold  under  the  Illinois  laws." 


152 

The  agreement  is  as  follows : 

''Memorandum  of  Agreement 
Between 


And 


In  consideration  of  my  receiving  employment 
by Company,  and  in  further  con- 
sideration of  the  fact  that  it  takes  a  full  week's 
time  after  employment  to  work  for  the  company 
to  advantage,  I  hereby  agree : 

1.  To  work  for  them  subject  to  their  general 
shop  rules. 

2.  To  give  them  one  week's  notice  of  my  in- 
tention of  leaving  their  employ  before  leaving,  in 
order  to  enable  them  to  employ  another  person  in 
my  place  and  have  him  become  thoroughly  famil- 
iar with  the  work. 

3.  In  case  I  leave  their  employ  without  giving 
the  requisite  notice  to  forfeit  one  week's  wages 
by  way  of  liquidated  damages. 

I  have  read  the  'General  Shop  Rules'  and  'In- 
structions to  Avoid  Accidents '  which  are  posted  in 
the  factory. 

I  represent  that  I  am years  of  age. 


Signature  of  employe." 

The  so-called ' '  Memorandum  of  Agreement ' '  is  with- 
out efficacy  and  destitute  of  legal  effect.  It  is  lack- 
ing in  mutuality  and  is  what  is  known  in  the  law  as 
a  unilateral  contract.  It  is  not  binding  on  either  party 
and  no  action  can  be  maintained  for  its  breach.  There 
is  no  agreement  on  the  part  of  the  company  to  employ. 
The  agreement  is  all  one-sided  and  the  employer 
agrees  to  do  absolutely  nothing.  The  promises  of 
the  employe  therefore  being  without  corresponding 
obligations  on  the  part  of  the  employer,  are  not  bind- 
ing. 

Vogel  v.  Pekoe,  157  111.,  339. 

Weaver  v.  Weaver,  109  111.,  225. 


153 

Wilkinson    v.    Heavenrich,    26  N.    W.,    139 
(Mich.). 

Am.  Cotton  Oil  Co.  v.  Kirk,  15  C.  C.  A.,  540 
(and  note). 

Bishop  on  Contracts,  Sees.  78  and  318. 

Chitty  on  Contracts,  p.  15. 

If  the  contract  were  mutual  and  binding,  the  parties 
may  stipulate  that  the  employe  shall  give  reasonable 
notice  of  his  intention  to  abandon  his  employment  and 
where  the  damages  for  failure  to  give  notice  are  not 
readily  ascertainable,  the  courts  will  give  effect  to  a 
forfeiture  clause  in  the  contract,  not  as  a  penalty  but 
as  liquidated  damages,  as  the  courts  will  not  enforce 
penalties. 

To  be  valid,  a  contract  with  a  forfeiture  clause  must 
be  a  definite  and  binding  contract  of  employment,  and 
the  services  of  such  a  nature  that  the  damages  occa- 
sioned on  account  of  a  failure  to  give  notice  are  not 
readily  ascertainable. 

The  use  of  the  term  ' '  liquidated  damages "  in  a  con- 
tract is  not  conclusive  that  it  is  not  a  penalty  in  any 
particular  case. 

Henessy  v.  Metzger,,  152  111.,  505. 
The  rule  is  well  settled  in  this  State  that  the  parties 
may  agree  upon  any  sum  as  compensation  for  the 
breach  of  a  contract,  which  does  not  exceed  the  amount 
of  the  damage  suffered,  but  when  the  sum  agreed  upon 
is  manifestly  greater  than  the  actual  damages,  and  the 
damages  are  such  as  can  be  readily  shown,  such  sum 
so  inserted  in  the  contract  will  be  regarded  merely  as 
a  penalty,  and  only  the  actual  damages  can  be  recov- 
ered. 

Schofield  v.  Tompkins,  95  111.,  190. 

Radloff  v.  Haase,  96  111.  App.,  74. 

Popper^  v.  Meagher,  148  111.,  192. 

Gobble  v.  Under,  76  111.,  157. 

Morris  v.  Tillson,  81  111.,  607. 

Reeves,  Admr.  v.  Stipp,  91  111.,  609. 


154 


LIABILITY  OF  VENDOR  OF  COKE  FOR  LOSS  OF  COKE  EN  ROUTE 
WHEN  SOLD  BY  OVEN  WEIGHTS. 

(Butler  Street  Foundry  &  Iron  Co.,  May  21,  1903.) 
"We  buy  coke  f.  o.  b.  cars  Chicago,  oven  weights 
to  govern.  We  find  that  on  an  average  cars  of 
about  twenty  tons,  oven  weight,  run  short  about 
one  ton  if  weighed  on  our  wagon  scales.  We  have 
repeatedly  called  attention  of  the  different  com- 
panies of  whom  we  buy  to  this  shortage,  and  in- 
variably they  tell  us  'coke  is  sold  that  way.' 

Are  we  obliged  to  accept  oven  weights,  when 
our  scales  show  repeatedly  that  oven  weights  are 
not  correct,  or  that  there  is  a  shrinkage  en  routs  ? ' ' 
If  the  contract  between  the  company  and  the  coke 
dealer  is  made  on  the  basis  of  "oven  weights"  those 
weights  must  govern  in  accordance  with  the  contract. 
That  the  contract  is  made  on  such  a  basis  is  apparent 
from  the  statement:    "We  buy  coke  f.  o.  b.  cars  Chi- 
cago, oven  weights  to  govern"  and  the  statement  of 
the  companies  that  "coke  is  sold  that  way." 

The  question  is  one  wholly  of  contract.  Of  course, 
if  there  is  loss  en  route  not  caused  by  shrinkage,  the 
railroad  company  would  be  liable  for  such  loss. 


THE    SCOPE   OF    THE   LITIGATION    WITH   THE    CHICAGO    TELE- 
PHONE  COMPANY. 

(Illinois  Malleable  Iron  Co.,  May  21,  1903.) 
"Concerning  the  Telephone  Company  and  their 
charges,  would  ask,  Can  you  not  have  your  bill 
amended  so  as  to  allow  more  of  your  members 
to  be  benefited  by  it?  We  are  afraid  it  will  not 
help  us.  Our  factory  is  on  Diversey  avenue, 
which  is  a  mile  and  a  half  north  of  North  avenue, 
so  we  are  too  far  north;  and  we  are  also  too  far 
west  to  be  benefited  by  your  bill. 

We  were  only  paying  $125  a  year  for  our  fac- 
tory telephone  until  we  put  in  the  metallic  circuit, 


155 

when  they  raised  us  to  $175.  We  have  two  of 
them  at  $175  a  year  at  our  factory.  Can  you  not 
amend  your  bill  to  give  us  relief  at  our  office  1  We 
have  a  switchboard  and  two  trunk  lines  and  three 
house  telephones,  and  you  know  how  they  pile  up 
the  charges  on  them;  yet  the  way  your  last  bill 
was  drawn  it  gave  us  no  relief. 

We  think  you  should  make  it  broad  enough 
this  time  to  give  relief  to  your  members  in  gen- 
eral." 

The  first  bill  of  the  Illinois  Manufacturers'  Associa- 
tion now  pending  before  Judge  Tuley,  applies  only  to 
such  persons  as  have  metallic  circuit  business  tele- 
phones within  certain  limits.  For  them  an  injunction 
has  been  procured  against  a  charge  in. excess  of  $125 
per  year. 

A  bill  was  recently  filed  on  behalf  of  those  members 
of  the  Association  whose  places  of  business  are  located 
within  one  mile  from  the  outside  limits  of  the  first 
district,  and  for  them  a  stay  has  been  procured  against 
a  charge  exceeding  $150  per  year.  There  are  some 
eight  hundred  plaintiffs  in  these  two  suits. 

It  is  not  possible  to  enlarge  the  scope  of  either  of 
those  bills  without  violating  the  rules  of  equity  plead- 
ing. The  purpose  of  a  bill  must  be  single  and  definite, 
and  cannot  include  a  number  of  distinct  causes  of 
action. 

There  are  no  proceedings  now  pending  relative  to 
switch-board  contracts,  nor  relating  to  residence  tele- 
phones, nor  relating  to  those  outside  the  mile  beyond 
the  designated  limits. 


AS  TO  WHETHER  THE  REPORTS  REQUIRED  UNDER  THE  ILLI- 
NOIS ANTI-TRUST  STATUTE  APPLY  TO  FOREIGN  CORPORA- 
TIONS. 

(Curtain  Supply  Co.,  May  21, 1903.) 
"Will  you  please  advise  whether  the  reports 
that  we  have  to  make  to  the  Secretary  of  State  on 
the  Anti-trust  proposition  apply  to  Foreign  cor- 


156 

porations.    Our  corporation  is  a  New  Jersey  cor- 
poration, licensed  to  do  business  in  this  State." 
The  Act  requiring  the  affidavit  provides : 

"That  it  shall  be  the  duty  of  the  Secretary  of 
State,  on  or  about  the  first  day  of  September  of 
each  year,  to  address  to  the  president,  secretary 
or  treasurer  of  each  incorporated  company  doing 
business  in  this  State,  whose  post-office  address  is 
known  or  may  be  ascertained,  a  letter  or  inquiry 
as  to  whether  the  said  corporation  has  all  or  any 
part  of  its  business  or  interest  in  or  with  any  trust, 
combination  or  association  of  persons  or  stockhold- 
ers, as  named  in  the  preceding  provisions  of  this 
Act  and  to  require  an  answer  under  oath,  of  the 
president,  secretary  or  treasurer,  or  any  director 
of  said  company;  a  form  of  affidavit  shall  be  en- 
closed in  said  letter  of  inquiry, ' '  etc.  4 
This  section  further  provides  a  penalty  of  $50  for 
each  day  after  refusal  to  make  such  affidavit  within 
thirty  days  from  the  mailing  of  said  notice— 

"or.  the  Attorney  General  may,  by  proper  pro- 
ceedings in  a  court  of  law  or  chancery,  proceed 
to  forfeit  such  charter  of  such  incorporated  com- 
pany or  association  incorporated  "under  the  gen- 
eral laws  or  by  any  special  law  of  this  State,  anoT 
to  revoke  the  rights  of  any  foreign  corporation 
located  herein,  to  do  business  in  this  State." 
The  statute,  therefore,  by  its  terms,  specifically  re- 
quires the  anti-trust  affidavit  to  be  made  for  all  cor- 
porations, foreign  as  well  as  domestic. 

The  Supreme  Court  of  Illinois,  in  People  v.  Butler 
Street  Foundry  &  Iron  Co.,  201  111.,  236,  held  that  the 
above  law  was  constitutional.  The  question  has  not 
been  decided  by  the  United  States  Supreme  Court. 
Heretofore  the  State  officials  have  not  endeavored  to 
enforce  the  law  in  question  as  against  foreign  corpora- 
tions. When  such  an  attempt  is  made  an  opportunity 
may  be  afforded  to  get  the  matter  into  the  Federal 
Courts.  Whether  the  outcome  in  the  United  States 
Supreme  Court  will  be  other  than  that  in  the  State 
Supreme  Court,  is  of  course  an  open  question. 


157 


LIABILITY     OF    A    RAILROAD     COMPANY     FOR     APPROPRIATING 
COAL  IN.  TRANSIT. 

(Ludowici  Roofing  Tile  Company,  May  21, 1903.) 

' '  We  believe  that  the  too  long  tolerated  attitude 
of  the  railroads  relative  to  private  ownership  is 
largely  responsible  for  the  present  state  of  af- 
fairs. If  grain  is  bought  at  an  elevator  or  steel 
at  a  mill  a  railroad  company  does  not  refuse  to 
issue  a  bil  of  lading  to  the  owner  for  his  property. 
But  if  the  property  is  coal  bought  at  the  mines 
the  bill  of  lading  is  frequently  withheld.  A  bill 
of  lading  when  issued  for  grain  or  steel  repre- 
sents property  and  is  negotiable.  A  bill  of  lading 
for  coal  has  no  value  in  the  estimation  of  a  rail- 
road company  and  the  sacred  property  rights  of 
private  owners  are  daily  violated  by  the  so-called 
confiscation  of  this  coal ;  as  truly  robbery  as  if  coal 
yards  were  forcibly  entered  and  coal  removed. 
This  outrageous  practice  has  been  tolerated  so 
long  that  possession  rather  than  purchase  has 
come  to  be  considered  as  constituting  owner- 
ship of  coal.  This  moral  delinquency  has  infected 
producers  and  dealers  until  the  real  owner  has 
very  little  to  say  as  to  the  disposition  of  his  prop- 
erty. 

We  would  urge  that  first  the  question  of  the 
rights  of  private  owners  to  retain  possession  of 
and  direct  the  handling  of  their  coal  be  definitely 
settled  in  the  courts  by  suits  against  the  railroads 
for  confiscating  coal,  and  second,  that  the  associa- 
tion through  its  special  committee  and  legal  ad- 
viser prepare  a  form  of  contract  which  will  be  a 
contract  in  effect  as  well  as  in  word,  and  that 
no  other  form  shall  be  used  by  members  of  the 
association." 

A  railroad  has  no  greater  right  to  confiscate  coal 
than  it  has  to  confiscate  any  other  species  of  prop- 
erty entrusted  to  its  care.  If,  therefore,  it  wrongfully 
appropriates  coal  to  its  own  use,  it  is  civilly  liable  in 


158 

damages  to  the  owner  for  the  value  of  such  coal.    There 
can  be  no  legal  custom  justifying  the  seizure. 

Whether  the  person  taking  the  coal  for  the  railroad 
company  can  be  held  criminally  liable  presents  a  more 
difficult  question,  and  one  that  is  not  entirely  free  from 
doubt.  It  is  a  question  that  has  never  been  adjudicated 
in  the  courts. 

Section  170  of  the  Criminal  Code  of  Illinois  (1  S.  & 
C.  Rev.  Stat.,  p.  1318)  provides: 

"If  any  bailee  of  any  bank  bill,  note,  money  or 
other  property,  shall  convert  the  same  to  his  own 
use,  with  intent  to  steal  the  same,  or  secretes  the 
same  with  intent  to  do  so,  he  shall  be  deemed  guilty 
of  larceny. ' ' 

Section  1  of  the  Act  of  June  19,  1891  (Laws  of  1901, 
p.  100),  provides: 

"That  whoever,  being  a  bailee  of  any  chattel, 
money  or  valuable  security,  shall  fraudulently  take 
or  convert  the  same  to  his  own  use  or  to  the  use 
of  any  other  person  other  than  the  owner  there- 
of, although  he  shall  not  break  bulk  or  otherwise 
determine  the  bailment,  shall  be  guilty  of  larceny, 
and  may  be  convicted  thereof  upon  an  indictment 
for  larceny. ' ' 

The  taking  of  coal  by  the  employes  of  a  railroad  com- 
pany for  the  use  of  the  company  comes  within  the 
scope  of  the  foregoing  provisions.  A  custom  of  the 
company  to  appropriate  coal  in  its  possession  as  a 
carrier  does  not  justify  the  taking,  and  such  custom  is 
not  legal. 

Hendry  v.  State,  22  So.,  647  (Fla.). 
Comm.  v.  Doane,  1  Cush.,  5 ; 
See,  also, 

KM  Stone  Co.  v.  Mack,  12  0.  C.  D.,  177. 
To    constitute    the    crime    of   larceny,   however,    a 
felonious  intent  is  necessary.    The  taking  or  conver- 
sion must  be  animo  furandi;  that  is,  with  an  intention 
to  steal. 

Phelps  v.  People,  55  111.,  334 ; 
Mason  v.  State,  32  Ark.,  238; 
Young  v.  State,  36  S.  W.,  272  (Tex.) 


159 

If  the  railroad  company  converted  the  coal  with  the 
intention  of  paying  for  the  same,  this  would  probably 
not  constitute  a  felonious  conversion  as  the  intention 
to  steal  it  not  present.  The  question  of  intent,  how- 
ever, is  a  question  of  fact  for  the  jury.  The  main  dif- 
ficulty is  the  securing  of  legal  proof  not  only  in  respect 
to  the  taking  but  with  respect  to  the  felonious  intent. 

It  is  asked  that  a  form  of  contract  be  prepared  to 
be  used  by  members  of  the  association.  I  have  not 
been  furnished  with  the  form  of  contract  now  in  use, 
and  I  cannot,  therefore,  advise  whether  or  not  such 
contract  fully  provides  for  the  rights  of  the  coal-buyer. 
The  provisions  of  the  contract  cannot,  however,  affect 
the  liability  of  the  railroad  company  for  the  confisca- 
tion of  the  coal. 

It  is  not  stated  whether  the  contract  referred  to  is 
the  contract  with  the  railroad  company  or  with  the 
coal  company.  In  either  event,  it  must  be  borne  in 
mind  that  the  agreement  would  have  to  be  assented 
to  by  both  parties,  and  conditions  favorable  to  the 
buyer  might  not  be  assented  to  by  the  other  party  who 
may  occupy  the  commanding  position. 

RIGHT   OF   PERSON   WHOSE    NAME   IS   BLOWN    IN   BOTTLES   TO 
PREVENT  THE  FURTHER  USE  OR  REFILLING  OF  THE  SAME. 

(Huss  &  Edler,  May  23,  1903.) 
"Will  you  please  let  us  know  whether  a  party 
having  a  design  patent  on  a  bottle,  with  their 
name  blown  in  the  bottle,  can  stop  anyone  from 
buying  above  mentioned  bottle  empty  from  second- 
hand dealers  and  using  it  if  one  puts  their  own 
label  on  bottle  designating  the  contents  and  using 
one's  own  name  and  not  using  name  or  brand  of 
original  packer  who  owns  design  patent  on  said 
bottle." 

The  facts  stated  are  not  sufficient  to  form  an  opin- 
ion, nor  is  it  stated  whether  the  new  contents  are  of 
like  kind  to  the  old.  If  the  bottles  are  sold,  a  pur- 
chaser obtains  a  valid  title  and  can  use  the  bottles  as 
his  own  property,  subject  to  certain  exceptions  herein- 


160 

after  stated.  If  the  bottles  are  sold  conditionally,  a 
bona-fide  purchaser  from  the  vendee  obtains  a  valid 
title,  even  though  the  condition  be  not  complied  with. 

If,  however,  there  is  an  agreement  on  the  part  of 
the  person  to  whom  the  bottles  are  delivered,  to  re- 
turn the  bottles,  the  title  does  not  pass,  and  a  pur- 
chaser from  such  person  obtains  no  title. 
People  v.  Cannon,  139  N.  Y.,  32. 
Westcott  v.  Thompson,  18  N.  Y.,  363. 
21  Ency.  of  Law  (1st  ed.),  pp.  567  et  seq. 

Whether  or  not  the  person  who  purchases  bottles 
from  a  second-hand  dealer  (assuming  that  he  obtains 
a  valid  title)  can  use  bottles  for  the  same  purposes  as 
the  original  bottler,  is  not  clearly  settled. 

The  French  courts  of  justice  have  several  times  had 
the  question  before  them. 

In  the  Court  of  Amiens,  in  1872,  it  was  held  that 
where  siphons  of  gaseous  waters  bear  the  mark  of  a 
manufacturer,  another  in  the  same  business  has  not  a 
right  to  avail  himself  thereof  for  his  products,  al- 
though he  founds  his  claim  so  to  do  on  the  constant 
practice  of  the  trade  permitting  the  employment  of 
siphons  returned  by  consumers,  in  exchange  for  others 
sold  to  them. 

Pie  v.  Poulet,  20  Annales,  46. 

In  the  Tribunal  Civil  of  the  Seine,  in  1879,  it  ap- 
peared in  evidence  that  the  defendants  had  obtained 
portions,  of  a  genuine  famous  article,  and,  supplying 
the  other  portions  made  by  himself,  he  marked  the  ar- 
ticle thus  completed  with  the  symbol  of  the  first  in- 
ventor. He  thus  succeeded  in  foisting  an  inferior  ar- 
ticle on  purchasers,  and  at  the  same  time  damaged  the 
reputation  of  the  owner  of  the  mark.  The  court  said  it 
was  fraud  to  use  the  mark,  even  on  the  genuine  por- 
tion. 

In  the  Tribunal  Correctiouel  of  Toulouse,  in  1881, 
there  was  a  case  of  selling  in  genuine  bottles  invested 
with  false  labels  and  fluid.  The  defendant  was  held 
liable  under  the  penal  code. 

Ministere  Public  and  F.  Prot.  &  Co.  v.  Corries, 
26  Annales,  1895. 


161 

The  courts  of  England  have  had  several  cases  of 
this  character  before  them. 

In  Rose  v.  Loftus,  47  L.  J.  N.  S.,  Ch.  567,  an  in- 
junction was  issued  to  restrain  the  defendant  from 
filling  bottles  with  articles  of  his  own  manufacture, 
having  indelibly  impressed  thereon  the  name  of  another 
trader  who  manufactured  an  article  of  like  description, 
even  though  such  trader  placed  on  such  bottles  a  label 
having  his  own  name  thereon. 

In  Barrett  v.  Gomm  (Ct.  of  App.),  March  2,  1883 
(74  Law  Times  Journal,  p.  388) : 

"B.  and  G.  were  rival  manufacturers  of  min- 
eral waters,  which  each  of  them  sold  in  Lament's 
patent  bottles,  having  blown  or  engraved  on  the 
glass  Lament's  name  and  trade  mark,  and  also 
the  name  and  trade  mark  of  B.  or  G.,  as  the  case 
might  be.  Each  of  them  also  placed  on  the  neck 
of  every  bottle  sent  out  by  him  an  adhesive  label 
bearing  his  name.  Two  bottles  of  soda  water 
were  found  at  an  inn,  having  the  plaintiff's  name 
and  trade  mark  on  the  glass,  but  the  defendant's 
label  on  the  neck.  There  was  no  evidence  to 
show  that  the  bottles  contained  the  defendant's 
soda  water,  or  that  he  had  filled  or  sold  them, 
and  he  denied  having  filled  or  sold  them  know- 
ingly. Held  (reversing  the  decision  of  Bacon,  V. 
C.),  tha't  no  injunction  could  be  granted  on  the 
evidence.  Semple,  per  Jessel,  M.  R.,  that,  if  a 
manufacturer  of  mineral  waters  gets  in  place  of 
his  own  bottles  foreign  bottles  bearing  in  the  glass 
another  man's  name  and  trademark,  he  is  entitled 
to  refill  them  with  his  own  mineral  waters,  and  to 
sell  them  so  refilled;  at  all  events  if  he  placed 
on  them  an  adhesive  label  of  his  own  so  as  to  com- 
pletely cover  the  engraved  name  and  trademark 
of  the  person  who  originally  filled  and  sold  the 
bottles." 

In  Welch  v.  Knott,  4  Kay  &  Johnson,  747,  the  plain- 
tiffs, being  manufacturers  of  soda  water,  stamped  on 
their  bottles  their  trade  name,  and  pasted  colored  la- 
bels over  the  corks  bearing  their  signature  with  certain 


162 

marks  constituting  their  trade  marks.  The  defendant 
purchased  a  lot  of  secondhand  bottles,  which  had  been 
sold  to  the  public,  with  the  name  of  the  plaintiff 
moulded  thereon.  It  was  the  custom  of  the  trade,  on 
selling  bottles  of  soda  water,  to  take  in  return  for  the 
bottles  sold  an  equal  number  of  similar  bottles,  with- 
out regard  to  what  names  might  be  moulded  thereon. 
A  temporary  injunction  was  issued.  It  was  held  that 
the  injunction  must  be  dissolved  on  the  ground  that  it 
was  not  shown  that  the  bottles  were  sold  when  refilled, 
with  any  intention  to  deceive,  or  with  probability  of  de- 
ception, although  if  a  probability  of  deception  had 
been  caused  though  unintentionally,  it  is  intimated  an 
injunction  would  issue. 

In  Rose  v.  Henley,  cited  47  L.  J.  Ch.,  577,  the  plain- 
tiff was  a  manufacturer  of  lime  juice,  who  sold  his  ar- 
ticle in  bottles  moulded  specially  for  him.  The  defend- 
ant systematically  collected  the  plaintiff's  empty  bot- 
tles and  sold  them  refilled  with  lime  juice  not  of  the 
plaintiff's  preparation.  An  injunction  was  issued,  re- 
straining the  defendant  from  doing  so. 

In  Australia,  the  case  of  Hostetier  v.  Anderson  was 
decided  (1  Australian  Jurist,  p.  4).  There  the  plain- 
tiffs, being  American  manufacturers  of  bitters,  sold 
the  bitters  in  bottles  having  the  words  "Dr.  Hostet- 
ter's  Stomach  Bitters."  The  defendants  bought  up 
a  considerable  quantity  of  the  plaintiffs'  moulded  bot- 
tles, and  sold  them  refilled  with  other  bitters  and  la- 
beled "Celebrated  Stomach  Bitters,"  but  the  labels  did 
not  in  form  or  color  resemble  those  used  by  the  plain- 
tiffs. An  injunction  was  issued  on  the  ground  that  the 
use  of  the  bottles  in  question  was  designed  to  make 
the  customer  believe  that  he  was  purchasing  the  gen- 
uine Hostetter  bitters. 

In  Evans  v.  Von  Laer,  32  Fed.,  153,  the  defendant 
purchased  empty  bottles,  formerly  filled  with  com- 
plainant's lime  juice,  upon  which  was  blown  upon  the 
bottom,  the  name  of  complainant.  The  bottles  were 
refilled  by  the  defendant  with  his  own  lime  juice,  and 
defendant 's  own  label  placed  upon  the  bottle. 

The  court  said : 


163 

"While  the  defendant  may  buy  in  the  market 
these  bottles,  and  sell  them  again,  filled  with  any- 
thing but  lime  juice,  I  do  not  think  he  should  be 
permitted  to  put  his  own  lime  juice  into  a  bottle 
stamped  with  the  complainant's  name  and  sell  it. 
This  may  be  said  to  be  calculated  to  lead  the  pub- 
lic to  believe  that  they  are  buying  the  complain- 
ant's lime  juice,  when,  in  point  of  fact,  they  are 
buying  some  other  person's." 

To  the  same  effect,  see  Sawyer  Crystal  Blue  Co.  v. 
Hubbard,  32  Fed.,  388,  where  the  defendant  was  re- 
strained from  using  bottles  with  the  complainant's 
name  on  them  for  the  same  purpose  as  formerly  used 
by  the  complainant. 

In  Hostetter  v.  Distilling  Co.,  46  Fed.,  188,  the  de- 
fendant sold  bitters  in  bulk,  and  advised  his  customers 
to  refill  bottles  formerly  containing  plaintiff's  bitters 
with  the  bitters  sold  in  bulk.  Held  that  defendant 
should  be  enjoined. 

In  1884,  in  the  Circuit  Court  of  the  United  States 
for  this  District,  there  was  a  similar  case.  The  de- 
fendant had  bought  from  junk  dealers  genuine  bottles 
that  had  contained  " Warner's  Safe  Kidney  and  Liver 
Cure, ' '  and  had  filled  them  with  some  base  concoction, 
and  affixed  counterfeits  of  the  labels.  He  was  mulcted 
in  damages  and  costs. 

Warner  v.  Roehr,  reported  in  the  Chicago  "Tribune" 
of  March  20,  1884,  and  referred  to  in  volume  29  Fed. 
Cas.,  p.  266. 

See  Brown  on  Trade  Marks,  pp.  454-5. 

See  also  Sebastian's  Law  of  Trade  Marks,  pp. 

158-9. 
Cox's  Manual  of  Trade  Mark  Cases,  157,  551, 

608,  652. 

Hopkins  on  Unfair  Trade,  p.  202. 
It  is  apparent,  from  the  foregoing  cases,  that  the  re- 
filling of  moulded  bottles  with  the  same  fluid  as  that 
originally  contained  therein,  without  any  distinctive 
marks  or  labels,  will  be  enjoined. 

Whether  or  not  the  court  will  enjoin  the  use  of 
such  bottles,  where  the  person  so  using  places  his  own 


164 

label  thereon,  is  a  more  difficult  question,  and  one  not 
definitely  settled.  If  there  is  an  intention  to  deceive,  or 
the  use  of  the  bottles  is  with  the  design  to  defraud,  or 
to  impose  upon  the  public,  the  courts  will  interfere.  A 
great  deal  depends  upon  the  surrounding  facts  and 
circumstances. 

The  principal  question  is  this :  Is  the  public  de- 
ceived, or  likely  to  be  ? 

The  so-called  Bottlers'  Law  of  Illinois,  of  1873,  was 
declared  unconstitutional,  in  Lippman  v.  People,  175 
111.,  101.  To  remedy  the  imperfections  in  that  law, 
the  Legislature  of  Illinois,  on  May  11,  1901  (Session 
Laws  of  1901,  p.  316),  passed  a  new  law.  Section  1 
of  that  law  provides  for  the  registration  and  publica- 
tion of  designs  and  trade  marks  on  bottles,  kegs,  etc. 

Section  2  makes  it  unlawful  for  any  person,  with- 
out the  written  consent  of  the  owner,  to  keep  for  sale 
any  bottle,  keg,  etc.,  which  shall  have  been  registered 
and  published  under  Section  1,  or  to  use  or  fill,  with 
any  substance,  commodity,  or  product,  for  the  sale 
therein  of  such  substance,  commodity,  or  product,  any 
such  bottle,  keg,  etc.,  or  to  wantonly  break  or  destroy, 
or  to  buy,  sell  or  dispose  of  or  traffic  in  any  such  bot- 
tle, keg,  etc.,  or  to  deface,  erase,  obliterate  or  cover 
up  or  otherwise  remove  or  conceal  any  such  brand  or 
trade  mark  for  the  purpose  of  destroying  or  remov- 
ing the  evidence  of  the  ownership  of  such  article. 

Section  3  makes  the  acts  defined  by  Section  2  prima 
facie  unlawful. 

Section  4  provides  for  penalties  for  a  violation  of  the 
Act. 

Section  5  provides  for  the  issuance  of  a  search  war- 
rant. 

Section  6  provides  for  the  issuance  of  injunctions  to 
restrain  violations  of  the  Act. 

The  above  law  was  recently  declared  constitutional 
by  Judge  Chytraus  of  the  Superior  Court  of  Cook 
County,  and  the  case  is  on  its  way  to  the  Supreme 
Court,  and  will  be  probably  submitted  at  the  June 
term,  1903. 

Of  course  the  law  in  question  only  applies  where  the 


165 

owner  of  the  bottles,  etc.,  has  not  parted  with  title  to 
the  same.  If  he  has  not  parted  with  such  title,  and  the 
law  is  upheld,  then  persons  other  than  the  registered 
owner  cannot  refill  such  bottles,  and  when  so  filled  sell 
the  same. 


NOTE: — The  decision  of  Judge  Chytraus  was  reversed  by  the  Su- 
preme Court  and  the  law  in  question  declared  unconstitutional.  See 
Horwich  v.  Walker  Gordon  Laboratory  Company,  205  111.,  497. — Ed. 


WHETHER  AN  ORDER  TAKEN  BY  A  TRAVELING  SALESMAN  AND 
ACCEPTED  BY  THE  HOUSE  CONSTITUTES  A  CONTRACT  AND 
WHETHER  THE  VENDOR  HAS  THE  RIGHT  TO  CANCEL  AN 
ORDER  AFTER  ACCEPTANCE  WHERE  UNFAVORABLE  REPORTS 
ARE  RECEIVED  AS  TO  THE  SOLVENCY  OF  THE  BUYER. 
MEASURE  OF  DAMAGES  FOR  FAILURE  OF  VENDOR  TO  DE- 
LIVER. 

(Senour  Manufacturing  Company,  May  25,  1903.) 

"Our  attention  has  been  attracted  to  an  article 
in  the  Mercantile  Adjuster  for  April  entitled  '  The 
rights  of  wholesale  merchants  in  relation  to  cus- 
tomers with  whom  they  have  accepted  orders  or 
made  contracts  of  sale  when  such  merchants  re- 
ceive unfavorable  commercial  reports  upon  the 
financial  standing  of  such  customers.'  It  goes  on 
to  state  that  these  merchants  have  traveling  sales- 
men who  solicit  orders  from  the  retail  trade,  and 
that  when  these  orders  reach  the  credit  man  of 
the  wholesale  house,  he  examines  into  the  record 
of  the  person  ordering  the  goods,  and  if  in  receipt 
of  unfavorable  reports,  he  refuses  to  fill  the  order. 
The  question  here  is  whether  he  has  the  right  to 
refuse  the  order  or  not. 

The  article  goes  on  to  state  that  there  is  an  in- 
teresting article  in  the  Central  Law  Journal  pub- 
lished Feb.  6th,  1903,  being  No.  6  of  Volume  56 
of  that  publication,  which  decides  that  question 
clearly.  The  case  is  that  of  Kavanaugh  Mfg.  Co. 
v.  Rosen,  92  N.  W.  Rep.,  788.  The  trial  court  gave 
information  to  the  effect  that  the  house  had  the 


166 

right  to  refuse  the  order  if  the  reports  were  un- 
favorable. The  Appellate  Court  reversed  the 
trial  court  and  held  that  it  was  the  duty  of  the 
wholesale  merchant  to  investigate  the  financial 
condition  of  defendants  before  making  contract. 
If  they  fail  to  do  this,  nothing  short  of  a  breach 
of  contract  upon  the  defendant's  part,  or  actual 
insolvency  would  excuse  the  plaintiff  in  fulfilling 
contract.  It  seems  to  us  the  question  to  decide 
here  is,  does  the  taking  of  an  order  by  the  travel- 
ing salesman,  submitting  it  to  the  house,  and  the 
acknowledgment  of  the  receipt  of  the  same  by  the 
wholesale  house,  constitute  making  a  contract?  In 
other  words — does  the  order  sent  to  the  wholesale 
house  by  the  traveling  salesman  and  the  accept- 
ance of  the  same  by  the  wholesale  merchant,  con- 
stitute a  contract  which  he  is  bound  to  fill,  whether 
the  party  from  whom  the  order  was  received  is 
afterwards  found  to  be  unfavorable  as  a  credit 
customer  1 

If  this  is  within  your  province  to  answer  for  one 
of  your  subscribers,  we  will  be  very  glad  to  have 
your  reply." 

If  an  order  is  obtained  by  a  traveling  salesman,  it 
becomes  a  binding  contract  as  soon  as  it  is  accepted 
by  the  seller.  Such  acceptance  is  a  ratification  of  the 
act  of  the  traveling  salesman. 

While  the  goods  remain  in  the  possession  of  the 
seller  he  has  a  lien  on  such  goods  for  the  purchase 
price.  The  seller  waives  this  lien,  however,  if  the 
goods  are  sold  on  credit  or  he  takes  a  note  or  other 
negotiable  instrument  in  conditional  payment. 

The  lien  of  the  seller  may  revive  when  the  term  of 
credit  has  expired,  or  the  note  has  been  dishonored,  or 
the  buyer  becomes  insolvent.  The  lien  continues  only 
so  long  as  the  goods  remain  in  the  possession  of  the 
seller.  After  that  and  until  delivery  to  the  buyer,  the 
seller  has  the  right  of  stoppage  in  transitu.  This  right 
can  only  exist,  however,  where  the  buyer  is  insolvent, 
unknown  to  the  seller  at  the  time  of  the  sale,  or  arising 
afterwards.  The  right  of  stoppage  in  transitu,  is  sim- 


167 

ilar  to  the  right  of  the  seller's  lien.  In  both  cases, 
actual  insolvency  is  indispensable;  anything  less  than 
that  is  not  sufficient.  If,  therefore,  an  order  has  been 
accepted  and  a  binding  contract  has  been  entered  into, 
the  seller  is  not  justified  in  refusing  delivery  and  can- 
not stop  the  goods  in  transit  unless  the  buyer  is  in- 
solvent. Mere  unfavorable  reports  are  insufficient. 
See: 

Tiffany  on  Sales,  pp.  204-226; 

21  Am.  &  Eng.  Ency.  of  Law  (1st  Ed.),  pp. 
601,  607; 

23  Am.  &  Eng.  Ency.  of  Law,  p.  923 ; 

2  Benjamin  on  Sales,  p.  668,  et  seq.; 

Kavanaugh  v.  Rosen,  92  N.  W.  (Mich.),  788. 
As  a  "business"  rather  than  a  "legal"  proposition, 
it  is  a  question  for  the  seller  whether  he  had  not  better 
take  the  chance  of  a  law-suit  for  damages  than  pos- 
sibly lose  the  purchase  price.  In  case  of  an  action  for 
damages  for  breach  of  contract,  the  measure  of  dam- 
ages is  the  difference  between  the  contract  price  and 
what  similar  merchandise  can  be  bought  for  in  the 
market.  If  similar  merchandise  cannot  be  bought  in 
the  market,  the  measure  of  damages  is  the  loss  of  the 
profit. 

WHETHER  A  RAILROAD  COMPANY  IS  OBLIGED  TO  REDEEM 
COUPONS  ON  MILEAGE  TICKETS  WHEN  THE  USER  HAS  NOT 
USED  THE  ENTIRE  MILEAGE. 

(Pitkin  &  Brooks,  May  26,  1903.) 
"In  the  opinion  of  Levy  Mayer,  General  Coun- 
sel, March  23,  1903,  in  reference  to  mileage  tickets 
being  used  by  other  salesmen  than  the  one  to 
whom  issued,  he  states  that  'It  is  made  the  duty 
of  the  Railroad  Company  by  statute  in  this  state 
(Rev.  Stat.,  Chap  114,  Sec.  116),  to  provide  for 
the  redemption  of  unused  tickets.'  In  connection 
with  this  question  we  beg  to  ask,  what  the  law  is 
regarding  the  redemption  of  coupons  issued  to 
salesmen,  to  be  redeemed  by  the  railroad  com- 
pany, according  to  their  rules  (when  the  user 


168 

has  traveled  2,000  miles  or  more),  when  such 
owner  or  user  has  not  traveled  the  2,000  miles 
and  does  not  use  any  more  interchangeable  mile- 
age. Is  the  railroad  company  obliged  to  redeem 
these  coupons?" 
The  law  provides : 

"That  it  shall  be  the  duty  of  the  owner  or  own- 
ers of  railroads  or  steamboats,  by  their  agents 
or  managers,  to  provide  for  the  redemption  of 
the  whole,  or  any  parts  of  coupons  of  any  ticket 
or  tickets,  as  they  may  have  sold,  as  the  pur- 
chaser, for  any  reason,  has  not  used,  and  does 
not  desire  to  use,  at  a  rate  which  shall  be  equal 
to  the  difference  between  the  price  paid  for  the 
whole  ticket  and  the  cost  of  a  ticket  between  the 
points  for  which  the  proportion  of  said  ticket  was 
actually  used;  and  the  sale  by  any  person  of  the 
unused  portion  of  any  ticket  otherwise  than  by 
the  presentation  of  the  same  for  redemption,  as 
provided  for  in  this  section,  shall  be  deemed  to 
be  a  violation  of  the  provisions  of  this  act,  and 
shall  be  punished  as  is  hereinbefore  provided: 
Provided,  that  this  act  shall  not  prohibit  any  per- 
son who  has  purchased  a  ticket  from  any  agent 
authorized  by  this  act  with  the  bona  fide  intention 
of  traveling  upon  the  same,  from  selling  any  part 
of  the  same  to  any  other  person. 

Any  railroad  or  steamboat  company  that  shall, 
by  any  of  its  agents  in  this  state,  refuse  to  re- 
deem any  of  its  tickets  or  parts  of  tickets,  as  pre- 
scribed in  section  five  of  this  act,  shall  pay  a  fine 
of  five  hundred  dollars  for  each  offense,  to  the 
People  of  the  State  of  Illinois;  and  it  shall  be 
unlawful  for  said  company,  subsequent  to  such 
refusal,  to  sell  any  ticket  or  tickets  in  this  state 
until  such  fine  is  paid."  Sees.  116  and  117,  Kurd's 
Rev.  Stat.  of  1901,  pp.  1389,  1390. 
The  railroad  company  is  therefore  entitled  to  de- 
duct the  amount  of  the  regular  rate  between  the  points 
for   which   the   ticket   was    actually   used,    from    the 
amount  paid  for  the  whole  ticket. 


169 


AS  TO  WHAT  CONSTITUTES  THE  LEGAL  BATE  UNDER  THE 
INTERSTATE  COMMERCE  ACT  AND  THE  DUTY  OF  THE  SHIP- 
PER TO  ASCERTAIN  THE  SAME. 

(Hibbard,  Spencer,  Bartlett  &  Company,  May  26, 1903.) 

"Will  you  kindly  note  the  enclosed  copies  of 
correspondence  which  are  quotations  from  differ- 
ent railroads,  naming  different  rates  on  the  same 
property  between  the  same  points.  These  rates 
are  supposed  to  be  made  jointly  and  alike  by  the 
various  routes.  Such  discrepancies  are  of  almost 
daily  occurrence  in  the  conduct  of  our  business, 
and  it  occurs  to  us  that  it  would  be  of  interest  to 
members  of  the  association  to  have  a  legal  opin- 
ion on  the  following  points : 

What  obligation  has  the  shipper  under  the  new 
law  (Elkins  Bill)  to  ascertain  whether  rates  quoted 
are  covered  by  legal  tariff? 

In  case  like  the  one  referred  to,  is  the  shipper 
at  liberty  to  take  the  lowest  quotation  1 

"If  he  bases  his  sale  upon  the  lowest  quotation 
and  it  proves  to  be  an  error,  or  is  not  covered  by 
legal  tariff,  and  he  is  out  of  pocket  thereby,  has 
he  any  recovery? 

In  case  two  tariffs  are  found  naming  different 
rates  on  the  same  goods  between  the  same  points, 
which  is  the  legal  one? 

Is  the  railroad  company  liable  for  demanding  or 
collecting  higher  than  the  legal  tariff  in  the  same 
manner  as  for  collecting  lower  than  the  legal 
tariff?" 

I  also  acknowledge  receipt  of  the  communication  of 
Barrett  Mfg.  Company,  which  is  as  follows : 

"The  question  as  to  what  effect  the  Elkins  law 
will  have  on  both  shippers  and  carriers  is  one 
that  is  being  daily  discussed  by  both  parties  at 
interest,  and  we  would  respectfully  ask  that  the 
matter  be  submitted  to  the  General  Counsel,  Mr. 
Levy  Mayer,  for  an  opinion,  which  we  think  would 
be  of  interest  to  all  members  of  the  Association." 


170 

As  both  communications  relate  to  the  same  subject 
matter,  I  will  answer  both  together. 

The  Interstate  Commerce  Act  was  approved  Febru- 
ary 4, 1887,  and  amended  March  2, 1889. 

Section  1  of  that  Act  defines  what  carriers  are  sub- 
ject to  the  Act,  being  those  engaged  in  commerce  be- 
tween the  States. 

Section  2  prohibits  unjust  discriminations  between 
persons  under  substantially  similar  circumstances  and 
conditions. 

Section  3  prohibits  any  unreasonable  preference  or 
advantage  to  any  person  or  locality,  or  to  any  par- 
ticular description  of  traffic,  or  any  undue  or  unrea- 
sonable prejudice  or  disadvantage.  It  also  provides 
that  carriers  shall  afford  all  reasonable,  proper  and 
equal  facilities  for  the  interchange  of  traffic. 

Section  4  prohibits  a  greater  charge  for  a  short  haul 
than  for  a  haul  for  a  longer  distance. 

Section  5  prohibits  the  pooling  of  freights. 
Section  6  provides  as  follows : 

"That  every  common  carrier  subject  to  the  pro- 
visions of  this  Act  shall  print  and  keep  open  to 
public  inspection  schedules  showing  the  rates  and 
fares  and  charges  for  the  transportation  of  pas- 
sengers and  property  which  any  such  common 
carrier  has  established  and  which  are  in  force  at 
the  time  upon  its  route.  The  schedules  printed  as 
aforesaid  by  any  such  common  carrier  shall 
plainly  state  the  places  upon  its  railroad  between 
which  property  and  passengers  will  be  carried, 
and  shall  contain  the  classification  of  freight  in 
force,  and  shall  also  state  separately  the  terminal 
charges  and  any  rules  and  regulations  which  in 
anywise  change,  affect  or  determine  any  part  of 
the  aggregate  of  such  aforesaid  rates,  and  fares 
and  charges.  Such  schedules  shall  be  plainly 
printed  in  large  type,  and  copies  for  the  use  of  the 
public  shall  be  posted  in  two  public  and  conspicu- 
ous places,  in  every  depot,  station  or  office  of  such 
carrier,  where  passengers  or  freight  respectively 
are  received  for  transportation,  in  such  form  that 


171 

they  shall  be  accessible  to  the  public,  and  can  be 
conveniently  inspected. ' ' 

Section  6  also  makes  the  same  provisions  as  to  pub- 
lishing schedules  by  carriers  receiving  freight  in  the 
United  States  to  be  carried  through  a  foreign  country. 
Section  6  further  provides  that  no  advance  shall  be 
made  in  published  rates,  except  after  ten  days'  public 
notice,  and  no  reduction  except  after  three  days'  no- 
tice. 

Section  6  further  provides : 

' i  And  when  any  such  common  carrier  shall  have 
established  and  published  its  rates,  fares  and 
charges  in  compliance  with  the  provisions  of  this 
section,  it  shall  be  unlawful  for  such  common  car- 
rier to  charge,  demanad,  collect  or  receive  from 
any  person  or  persons,  a  greater  or  less  compen- 
sation for  the  transportation  of  passengers  or 
property,  or  for  any  services  in  connection  there- 
with, than  is  specified  in  such  published  schedules 
of  rates,  fares  and  charges  as  may  at  the  time  be 
in  force. 

Every  common   carrier,   subject  to  the  provi- 
sions of  this  Act  shall  file  with  the  Commission 
hereinafter  provided  for  copies  of  its  schedules 
of  rates,  fares  and  charges  which  have  been  estab- 
lished in  compliance  with  the  requirements  of  this 
section,  and  shall  promptly  notify  said  Commis- 
sion of  all  changes  made  in  the  same.    Every  such 
common  carrier  shall  also  file  with  said  Commis- 
sion copies  of  all  contracts,  agreements,  or  ar- 
rangements with  other  common  carriers  in  rela- 
tion to  any  traffic  affected  by  the  provisions  of  this 
Act  to  which  it  may  be  a  party. ' ' 
The  same  provisions  as  to  publication  of  tariff,  ad- 
vance or  reduction  in  rates,  and  as  to  compensation 
greater  or  less  than  schedules  are  made  with  respect 
to  joint  rates. 

The  remainder  of  Section  6  relates  to  the  remedies 
for  failure  of  the  carrier  to  file  or  publish  its  sched- 
ules as  required  by  law. 


172 

Section  7  prohibits  any  contract  to  prevent  the  con- 
tinuous carriage  of  freights. 

Section  8  provides  that  a  carrier  doing  or  failing  to 
do,  or  permitting  any  act  declared  unlawful,  or  omit- 
ting to  do  any  act  required  to  be  done  shall  be  liable 
to  the  person  injured  for  the  amount  of  damages  caused 
thereby. 

Section  9  provides  for  making  complaints  to  the 
Commissions  or  pursuing  remedies  in  court  for  a  vio- 
lation of  the  Act. 

Section  10  relates  to  the  penalties  for  a  violation  of 
the  Act.  It  further  provides  as  follows : 

"Any  person  and  any  officer  or  agent  of  any 
corporation  or  company  who  shall  deliver  prop- 
erty for  transportation  to  any  common  carrier 
subject  to  the  provisions  of  this  Act,  or  for  whom 
as  consignor  or  consignee  any  such  carrier  shall 
transport  property,  who  shall  knowingly  and  wil- 
fully, by  false  billing,  false  classification,  false 
weighing,  false  representation  of  the  contents  of 
the  package,  or  false  report  of  weight,  or  by  any 
other  device  or  means,  whether  with  or  without  the 
consent  or  connivance  of  the  carrier,  its  agent,  or 
agents,  obtain  transportation  for  such  property  at 
less  than  the  regular  rates  then  established  and  in 
force  on  the  line  of  transportation,  shall  be  deemed 
guilty  of  fraud,  which  is  hereby  declared  to  be  a 
misdemeanor  and  shall,  upon  conviction  thereof  in 
any  court  of  the  United  States  of  competent  juris- 
diction within  the  district  within  which  such  of- 
fense was  committed,  be  subject  for  each  offense 
to  a  fine  of  not  exceeding  five  thousand  dollars  or 
imprisonment  in  the  penitentiary  for  a  term  of  not 
exceeding  two  years,  or  both,  in  the  discretion  of 
the  court. ' ' 

Penalties  are  also  provided  against  the  carrier. 
The  remaining  sections  of  the  Act  relate  to  the  cre- 
ation of  the  Interstate  Commerce  Commission,  pre- 
scribe their  duties  and  provide  various  remedies  for 
violations  of  the  Act. 

Section  1  of  the  Act  of  February  19,  1903,  known  as 


173 

the    "Elkins    Law"    (Session    Laws    57th    Congress, 

Chap.  708,  p.  847)  provides: 

' '  That  anything  done  or  omitted  to  be  done  by  a 
corporation  common  carrier,  subject  to  the  Act  to 
regulate  commerce  and  the  Acts  amendatory 
thereof,  which,  if  done  or  omitted  to  be  done  by 
any  director  or  officer  thereof,  or  any  receiver, 
trustee,  lessee,  agent  or  person  acting  for  or  em- 
ployed by  such  corporation,  would  constitute  a 
misdemeanor  under  said  Acts  or  under  this  Act, 
shall  also  be  held  to  be  a  misdemeanor  committed 
by  such  corporation,  and  upon  conviction  thereof, 
it  shall  be  subject  to  like  penalties  as  are  pre- 
scribed in  said  Acts  or  by  this  Act  with  reference 
to  such  persons,  except  as  such  penalties  are  here- 
in charged.  The  wilful  failure  upon  the  part  of 
any  carrier  subject  to  said  Acts  to  file  and  publish 
the  tariffs  or  rates  and  charges  as  required  by  said 
Acts  or  strictly  to  observe  such  tariffs  until 
changed  according  to  law,  shall  be  a  misdemeanor 
and  upon  conviction  thereof  the  corporation  of- 
fending shall  be  subject  to  a  fine  of  not  less  than 
one  thousand  dollars  nor  more  than  twenty  thou- 
sand dollars  for  each  offense;  and  it  shall  be  un- 
lawful for  any  person,  persons  or  corporation  to 
offer,  grant  or  give,  to  solicit,  accept  or  receive  any 
rebate,  concession  or  discrimination  in  respect  to 
the  transportation  of  any  property  in  interstate  or 
foreign  commerce  by  any  common  carrier  subject 
to  said  Act  to  regulate  commerce  and  the  Acts 
amendatory  thereto  whereby  any  such  property 
shall  by  any  device  whatever  be  transported  at  a 
less  rate  than  that  named  in  the  tariffs  published 
and  filed  by  such  carrier,  as  is  required  by  said 
Act  to  regulate  commerce  and  the  Acts  amenda- 
tory thereto,  or  whereby  any  other  advantage  is 
given  or  discrimination  is  practiced.  Every  per- 
son or  corporation  who  shall  offer,  grant  or  give, 
or  solicit,  accept  or  receive  any  such  rebates,  con- 
cession or  discrimination,  shall  be  deemed  guilty 
of  a  misdemeanor  and  on  conviction  thereof  shall 


174 

be  punished  by  a  fine  of  not  less  than  one  thou- 
sand dollars  nor  more  than  twenty  thousand  dol- 
lars. In  all  convictions  occurring  after  the  pas- 
sage of  this  Act  for  offenses  under  said  Acts  to 
regulate  commerce,  whether  committed  before  or 
after  the  passage  of  this  Act,  or  for  offenses  under 
this  section,  no  penalty  shall  be  imposed  on  the 
convicted  party  other  than  the  fine  prescribed  by 
law,  imprisonment  wherever  now  prescribed  as 
part  of  the  penalty  being  hereby  abolished.  Every 
violation  of  this  section  shall  be  prosecuted  in  any 
court  of  the  United  States  having  jurisdiction  of 
crimes  within  the  district  in  which  such  violation 
was  committed,  or  through  which  the  transporta- 
tion may  have  been  conducted;  and  whenever  the 
offense  is  begun  in  one  jurisdiction  and  completed 
in  another  it  may  be  dealt  with,  inquired  of,  tried, 
determined  and  punished  in  either  jurisdiction  in 
the  same  manner  as  if  the  offense  had  been  actu- 
ally and  wholly  committed  therein. 

In  construing  and  enforcing  the  provisions  of 
this  section  the  act,  omission  or  failure  of  any 
officer,  agent  or  other  person  acting  for  or  em- 
ployed by  any  common  carrier  acting  within  the 
scope  of  his  employment,  shall  in  every  case  be 
also  deemed  to  be  the  act,  omission  or  failure  of 
such  carrier,  as  well  as  that  of  the  person.  When- 
ever any  carrier  files  with  the  Interstate  Com- 
merce Commission,  or  publishes  a  particular  rate 
under  the  provisions  of  the  Act  to  regulate  com- 
merce, or  Acts  amendatory  thereto,  or  participates 
in  any  rates  so  filed  or  published,  that  rate  as 
against  such  carrier,  its  officers  or  agents  in  any 
prosecution  begun  under  this  Act,  shall  be  con- 
clusively deemed  to  be  the  legal  rate,  and  any  de- 
parture from  such  rate,  or  any  offer  to  depart 
therefrom,  shall  be  deemed  to  be  an  offense  under 
this  section  of  this  Act. ' ' 

Section  2  provides  that  in  enforcing  the  provisions 
of  the  Interstate  Commerce  statute,  all  persons  inter- 
ested or  affected  by  the  rate  may  be  made  parties. 


175 

Section  3  provides  for  the  bringing  of  suits  to  en- 
force the  provisions  of  the  Act,  and  for  the  compulsory 
attendance  of  witnesses,  etc. 

It  is  made  the  duty  of  the  carrier  to  print  and  keep 
for  public  inspection  schedules  showing  its  rates  and 
charges,  which  schedules  are  to  be  filed  with  the  Inter- 
state Commerce  Commission. 

The  Elkins  law  provides  that  the  rates  contained  in 
the  schedules  published  and  filed  under  the  Interstate 
Commerce  Act  shall  conclusively  be  considered  the 
legal  rates. 

The  shipper  is,  therefore,  under  the  obligation  to 
ascertain  the  legal  rate  from  an  inspection  of  the 
tariff.  He  cannot  rely  upon  the  quotations  of  the  car- 
riers' agents.  If  he  receives  two  quotations  for  the 
same  shipment,  it  is  his  legal  duty  to  determine  which 
is  the  schedule  rate.  The  schedule  which  is  published 
and  filed  with  the  Commission  is  the  " legal"  tariff. 

Under  the  law  as  construed  by  the  United  States 
Supreme  Court,  carriers  are  not  only  entitled  to  exact 
their  proper  established  rates,  but  they  are  bound  to 
do  so  and  a  lower  rate  stated  in  a  bill  of  lading  issued 
by  the  carrier  to  the  shipper  will  not  be  enforced. 

Gulf  C.  &  8.  F.  R.  Co.  v.  Hefley,  158  IT.  S.,  98. 
Suffern,  Hunt  &  Co.  v.  Ind.  etc.  Ry.  Co.,  1  Int. 

C.  C.  Rep.,  255,  278. 
In  the  case  last  cited  it  is  said : 

' '  Shippers  and  consignees  cannot,  therefore,  de- 
pend for  the  lawful  rate  or  charge  upon  what  may 
be  quoted  by  the  carrier's  agent,  but  they  must 
be  guided  by  the  published  rate  sheets  themselves. 
Such  interpretation  of  the  law  emphasizes  the 
legal  duty  of  the  carriers  to  make  their  schedules 
of  rates  comply  precisely  with  the  mandatory  pro- 
visions in  the  statute  concerning  the  contents  and 
publication  of  such  schedules,  in  order  that  ship- 
pers may,  upon  inspection,  be  enabled  to  readily 
and  accurately  determine  what  rates,  and  what 
transportation  rules  affecting  rates,  are  actually 
in  force  for  any  particular  service." 
Section  8  of  the  Interstate  Commerce  Act  provides 


176 

that  any  carrier  subject  to  the  Act,  who  does  or  causes 
to  be  done  anything  in  the  Act  declared  to  be  unlawful, 
or  omits  to  do  any  act  required  to  be  done,  shall  be 
liable  to  the  person  injured  for  the  full  amount  of  the 
damages  sustained  in  consequence  of  any  such  viola- 
tion of  the  provisions  of  the  Act. 

If  the  carrier  exacts  from  the  shipper  a  charge  in 
excess  of  the  rates  prescribed  by  the  legal  tariff  the 
shipper  can  recover  back  the  excess.  Such  a  payment 
cannot  be  considered  a  voluntary  payment.  The  car- 
rier is  liable  under  the  law  in  the  same  manner  for 
collecting  a  higher  rate  as  for  collecting  a  lower  rate. 
Suffern  v.  Indiana,  etc.,  Ry.  Co.,  7  Int.  C.  C. 
Eep.,  255. 

The  Barrett  Manufacturing  Co.  ask  an  opinion  as  to 
the  effect  of  the  Elkins  Law.  My  opinion  is  not  asked 
on  any  particular  question.  The  provisions  of  the  law 
are  quoted  above. 

If  there  is  any  question  not  answered  in  this  opinion, 
arising  upon  a  reading  of  the  law,  I  shall  be  glad  to 
advise  further. 


FORMATION  OF  SUBSIDIARY  CORPORATION  IN  FOREIGN  STATE 
TO  OBVIATE  COMPLIANCE  WITH  FOREIGN  CORPORATION 
LAW  AND  RIGHT  OF  ILLINOIS  CORPORATION  TO  HOLD  STOCK 
IN  SUCH  CORPORATION. 

(Illinois  Manufacturers'  Association,  May  26,  1903.) 

"As  members  of  the  Illinois  Manufacturers' 
Association,  we  take  the  liberty  of  writing  you 
for  your  opinion  relative  to  the  laws  of  Kansas 
governing  foreign  corporations.  We  are  at  the 
present  time  doing  business  in  Kansas,  but  are 
organized  under  the  laws  of  Illinois.  As  you  are 
aware,  the  laws  of  Kansas  relating  to  foreign  cor- 
porations are  very  severe  regarding  the  payment 
of  a  large  amount  for  license,  the  filing  of  state- 
ments, annual  reports,  etc.,  and  what  we  would 
like  to  know  is  as  to  whether  or  not,  in  your  opin- 
ion, we  can  organize  an  independent  corporation 


177 

in  Kansas,   *        *   with  headquarters  at  Wichita, 
Kansas,  and  complying  with  the  State  laws  gov- 
erning the  domestic  corporations." 
I  express  no  opinion  as  to  whether  or  not  it  is  ad- 
visable to  form  an  independent  corporation  in  Kan- 
sas rather  than  comply  with  the  foreign  corporations 
laws  of  that  State,  but  confine  myself  to  the  question  as 
to  whether  or  not  there  are  any  legal  obstacles  to  the 
formation  of  such  a  corporation. 

There  is  but  one  objection  to  the  formation  of  an 
independent  corporation  in  Kansas.  Under  the  laws 
of  Illinois,  a  corporation  organized  thereunder  cannot 
hold  stock  in  another  corporation,  or  control  another 
corporation  through  the  ownership  of  its  stock.  The 
Illinois  corporation  could  not,  therefore,  legally  own 
or  hold  the  stock  of  the  Kansas  corporation.  Such  own- 
ership could  not  be  attacked,  however,  except  by  the 
State  or  by  the  stockholders  of  the  corporation.  There 
is  no  legal  objection  to  persons  connected  with  or  even 
owning  the  entire  stock  of  the  Illinois  company,  owning 
also  the  stock  of  the  Kansas  company. 


WHETHER  IT  IS  ADVISABLE  FOR  AN  ILLINOIS  CORPORATION 
ESTABLISHING  A  BRANCH  IN  MICHIGAN  TO  COMPLY  WITH 
THE  FOREIGN  CORPORATION  LAW  OF  MICHIGAN  BATHER 
THAN  DO  BUSINESS  THROUGH  THE  MEDIUM  OF  A  PART- 
NERSHIP. RIGHT  OF  ILLINOIS  CORPORATION  TO  HOLD 
STOCK  IN  OTHER  CORPORATIONS. 

(Illinois  Manufacturers'  Association,  May  27,  1903.) 

"We  are  a  corporation  organized  under  Illinois 
laws  as  wholesale  dealers  and  manufacturers  and 
desire  to  go  into  manufacturing  business  in  the 
State  of  Michigan — all  goods  put  up  there  to  be 
sold  by  our  Chicago  house,  deliveries  may  be  made 
direct  from  Michigan  or  goods  may  be  shipped  to 
us  in  Chicago.  No  sales  to  be  made  by  the  Mich- 
igan house.  Is  it  practicable  to  conduct  said  man- 
ufacturing business  in  Michigan  under  our  corpo- 
ration name  as  copartners?  What  embarrass- 


178 

ments,  complications  or  annoyances  (if  any)  might 
arise  under  the  law  by  such  a  course?  Do  you 
advise  rather  to  comply,  as  a  foreign  corporation, 
with  state  laws  of  Michigan? 

Ours  is  strictly  a  close  corporation,  all  the  stock 
being  held  by  its  officers,  who  would  comprise  the 
members  of  the  proposed  firm. ' ' 
There  is  no  legal  objection  to  the  formation  of  an 
actual  partnership  to  be  composed  of  the  members  of 
the  present  corporation  for  the  purpose  of  transact- 
ing business  in  Michigan.  There  being  no  objection 
thereto  on  the  part  of, the  existing  corporation,  its 
name  (which  does  not  appear  on  its  face  to  indicate  a 
corporation)  can  be  legally  used  to  designate  the  pro- 
posed partnership  in  Michigan.  If  a  Michigan  corpo- 
ration is  formed,  the  Illinois  corporation,  in  a  strictly 
legal  sense,  would  have  no  right  as  a  corporation  to 
own  the  stock  of  the  Michigan  corporation.  Under 
our  law  a  corporation  (with  certain  exceptions  not  now 
pertinent)  cannot  own  stock  in  another  corporation. 
Such  ownership,  however,  can  only  be  attacked  by  the 
state,  or  by  a  non-consenting  stockholder.  In  the  case 
of  private  corporations  I  have  never  heard  of  a  case 
where  the  authorities  of  this  state  have  attempted  to 
prevent  the  ownership  of  stock  in  another  corporation. 
In  several  states  other  than  Illinois,  their  corporations 
are  expressly  authorized  to  hold  stock  in  other  corpo- 
rations. 

Of  course,  the  members  of  the  partnership  would 
be  individually  liable,  as  partners,  for  the  debts  of  the 
firm. 

Whether  or  not  it  is  advisable  to  comply  with  the 
corporation  law  of  Michigan  rather  than  to  do  busi- 
ness through  the  medium  of  a  partnership,  is  a  ques- 
tion of  business  policy  and  convenience.  In  either 
event,  it  will  be  necessary  to  pay  taxes  on  both  real 
and  personal  property  located  in  Michigan.  In  case 
of  a  compliance  with  the  foreign  corporation  law  of 
Michigan,  the  corporation  would  have  to  pay  one-half 
mill  on  each  dollar  of  the  proportion  of  its  capital 
stock  represented  by  the  property  owned  and  used  and 


179 

business  transacted  in  Michigan,  which  cannot  be  less 
than  $25. 

Laws  of  Michigan  (Act  No.  206),  1901,  June  6,  1901. 

Why  not  have  the  Illinois  corporation  (if  its  charter 
covers  the  subject-matter)  do  the  proposed  business 
in  Michigan  I  That  would  seem  to  be  the  simplest  way 
under  the  circumstances. 


RIGHT  OF  EMPLOYEE  TO  MAKE  DEDUCTIONS  FROM  THE 
WAGES  OF  EMPLOYES  ON  ACCOUNT  OF  MISTAKES,  ERRORS, 
ETC.  CONSTITUTIONALITY  OF  LAW  PROHIBITING  SUCH 
DEDUCTIONS. 

(Thayer  &  Jackson  Stationery  Co.,  May  28, 1903.) 

''Will  you  please  obtain  the  opinion  of  the  at- 
torney of  the  association  on  the  question  whether 
mistakes,  damages  and  other  losses  caused  by  er- 
rors of  employes  can  be  deducted  from  their  pay, 
when  the  exact  expense  of  the  same  is  known." 
The  legislature  of  1891  passed  an  Act  (Approved 
May  28,  1891,  in  force  July  1, 1891,)  entitled: 

''An  Act  to  provide  for  the  payment  of  wages 
in  lawful  money,  and  to  prohibit  the  Truck  Sys- 
tem, and  to  prevent  deductions  from  wages,  ex- 
cept for  lawful  money  actually  advanced." 
(Kurd's  Rev.  Stat.,  1901,  p.  879,  laws  of  1891,  p. 
212.) 

Sections  1,  2  and  7  of  that  Act,  relating  to  the  so- 
called  " Truck  System,"  were  declared  unconstitu- 
tional by  the  Illinois  Supreme  Court  in  Frorer  v.  Peo- 
ple, 141  111.,  171,  s.  c.,  16  L.  E.  A.,  492. 

Sections  3,  4  and  5  were,  however,  not  passed  upon 
by  the  Supreme  Court,  and  as  they  are  separable  from 
that  part  of  the  Act  declared  unconstitutional,  they  are 
not  affected  by  the  decision. 
Sections  3,  4  and  5  provide — 

'Section  3.  It  shall  be  unlawful  for  any  per- 
son, company,  corporation  or  association  employ- 
ing workmen  in  this  State,  to  make  deductions 
from  the  wages  of  his,  its  or  their  workmen,  ex- 


180 

cept  for  lawful  money,  checks  or  drafts  actually 
advanced  without  discount,  and  except  such  sums 
as  may  be  agreed  upon  between  employer  and  em- 
ploye which  may  be  deducted  for  hospital  or  re- 
lief fund  for  sick  or  injured  employes. 

Section  4.  Any  deductions  made  from  the  wages 
of  any  workman  of  this  State,  except  as  provided 
in  Section  three  (3)  of  this  Act,  may  be  recovered 
in  any  appropriate  action  before  any  court  of  com- 
petent jurisdiction,  together  with  such  reasonable 
attorney  fee  as  the  court  in  its  discretion  shall 
think  proper,  and  no  offset  or  counter-claim  of  any 
kind  shall  be  allowed  in  such  action  or  proceeding. 
Section  5.  All  attempts  to  evade  or  avoid  the 
provisions  of  this  Act,  by  contract  or  otherwise, 
shall  be  deemed  a  violation  thereof,  and  for  every 
violation,  in  addition  to  the  civil  remedy  pro- 
vided for  in  Section  four  (4)  there  shall,  on  con- 
viction, be  a  fine  imposed  of  not  less  than  fifty 
(50)  nor  more  than  two  hundred  (200)  dollars  for 
each  offense." 

Section  3,  therefore,  makes  it  unlawful  for  an  em- 
ployer to  deduct  any  sum  from  wages  due,  except  for 
money  ''actually  advanced  without  discount/'  and  ex- 
cept also,  such  sums  "as  may  be  agreed  upon  between 
employer  and  employe,  which  may  be  deducted  for 
hospital  or  relief  fund  for  sick  or  injured  employes." 
Deductions  for  any  other  purpose  are  made  unlawful. 
The  employer  who  has  paid  the  employe  his  wages  be- 
fore they  are  due,  is  therefore  prohibited  from  making 
any  agreement  with  such  employe  for  the  payment  of 
interest  on  the  amount  advanced. 

The  employer  is  also  prohibited  from  making  an 
agreement  with  his  employes  to  deduct  any  sum  from 
his  wages  no  matter  for  what  cause  the  deduction  may 
be  made.  If.  an  employer  and  employe  entered  into  an 
agreement,  providing  that  the  amount  of  all  damages 
caused  by  the  wilful  or  negligent  conduct  of  the  em- 
ploye should  be  deducted  from  his  wages,  such  agree- 
ment would  be  unlawful  under  the  statute. 

In  my  opinion,  the  law  in  question,  is  an  unlawful 


181 

interference  with  the  freedom  of  contract  and  is  there- 
fore unconstitutional  and  void. 

Comm.  v.  Perry  (Mass.),  14  L.  R.  A.,  325. 
Section  6  of  the  law  provides : 

"Nothing  in  this  Act  shall  be  so  construed  as 
to  include  the  business  of  farmers,  or  farm  labor- 
ers, or  servants." 

This  exception  in  the  statute  falls  within  the  con- 
demnation of  the  United  States  Supreme  Court  in 
Connolly  v.  Union  Sewer  Pipe  Co.,  184  U.  S.,  540.  The 
State  cannot  exempt  from  a  statute  persons  in  a  sim- 
ilar situation,  as  the  persons  sought  to  be  regulated. 
The  State  has  the  right  to  classify,  but  such  classifica- 
tion must  rest  upon  some  reasonable  difference  be- 
tween the  persons  or  subjects  sought  to  be  classified. 
The  classification  cannot  be  arbitrarily  made.  The 
law  must  be  general  and  uniform  in  its  operation,  and 
apply  to  all  who  occupy  a  similar  situation.  In  my 
opinion,  the  exemption  of  farmers,  farm  laborers  and 
servants  from  the  operation  of  the  law,  renders  the 
law  unconstitutional  and  void. 

Connolly  v.  Sewer,  Pipe  Co.,  184  U.  S.,  540. 

Cotting  v.  Kansas  City  Stock  Yards  Co.,  183 
U.  S.,  79. 

Frorer  v.  People,  141  111.,  171. 

Millett  v.  People,  117  111.,  294. 

Braceville  Coal  Co.  v.  People,  147  111.,  66. 

State  v.  Loomis  (Mo.),  21  L.  E.  A.,  789. 
The  question  must  therefore  be  decided  without  ref- 
erence to  statute  law.  The  employer  has  the  right  to 
deduct  from  the  wages  of  the  employe  in  any  case 
where  he  has  a  legal  claim  against  the  employe,  and 
where  such  claim  would  be  available  by  way  of  set-off, 
recoupment  or  counter-claim  in  a  suit  by  the  employe 
for  his  wages.  The  claim,  however,  must  be  a  legal 
claim,  and  one  which  would  form  the  basis  of  an  in- 
dependent suit  against  the  employe.  The  employer  has 
not  the  right  to  make  arbitrary  deductions,  nor  impose 
fines  or  penalties. 

Whether  or  not  the  claim  of  the  employer  is  avail- 
able by  way  of  set-off,  recoupment  or  counter-claim,  de- 


182 

pends  upon  the  nature  of  the  claim.  If  the  damages 
are  ' '  liquidated ' '  they  can  be  set-off,  even  though  they 
arise  out  of  a  different  transaction  than  the  one  in 
suit.  "Liquidated"  damages  are  such  as  are  certain, 
or  which  can  be  made  certain  by  mere  calculation,  or 
such  as  have  been  agreed  upon  in  advance  by  the  par- 
ties, and  which  do  not  require  the  intervention  of  a 
jury  to  ascertain. 

"Unliquidated"  damages  can  be  set  off  or  recouped, 
as  the  case  may  be,  when  the  damages  arise  out  of 
the  same  transaction.  The  employer,  therefore,  has 
the  right  to  deduct  from  the  wages  of  the  employe 
the  amount  of  the  loss  or  damage  for  which  the  em- 
ploye is  legally  liable,  whenever  such  damages  are 
"liquidated,"  no  matter  out  of  what  transaction  the 
liability  may  arise.  Where  the  damages  are  "un- 
liquidated," the  deduction  can  only  be  made  where 
the  liability  grows  out  of  the  subject  matter  of  the 
employment. 

If  the  employer  wrongfully  deducts  any  sum  from 
the  wages  of  the  employe,  he  will  be  liable  for  attor- 
ney's fee  in  a  suit  for  the  wages  due.  (Hurd's  Rev. 
Stat.,  1901,  pp.  879,  1117.) 

The  question  is  not  asked,  and  I  express  no  opinion 
upon  the  effect  in  a  particular  case  of  the  statute  of 
this  State  (Sec.  14,  Chap.  62,  Kev.  Stat.,  1901,  Garnish- 
ment Act),  which  allows  the  head  of  a  family  an  ex- 
emption of  $15.00  per  week  for  wages,  where  the  em- 
ployer has  been  garnished. 

NOTE: — The  Supreme  Court  of  Illinois  on  February  17,  1904,  in 
Kellyville  Coal  Co.  v.  Harrier,  207  111.,  624,  declared  the  sections  above 
referred  to  unconstitutional. — Ed. 


THE  AFFIDAVIT  REQUIRED  UNDER  THE  ANTI-TRUST  LAW  AND 
THE  FORM  OF  THE  SAME. 

(Illinois  Manufacturers'  Association,  May  29,  1903.) 

"If  a  corporation  is  unable  truthfully  to  make 

the  affidavit  called  for  by  the  anti-trust  laws  of 

this  State,  or  is  in  doubt  as  to  its  ability  to  make 


183 

such  an  affidavit  owing  to  time  elapsed  since  the 
date  specified  in  the  affidavit  after  which  no  agree- 
ment should  be  made,  and  the  talks,  partial  agree- 
ments, arrangements  on  various  matters  possibly 
included  in  the  affidavit  that  may  have  taken  place 
and  which  in  the  ordinary  conduct  of  business  are 
almost  sure  to  have  taken  place,  should  such  cor- 
poration ignore  the  affidavit  entirely,  or  would  you 
advise  that  the  affidavit  be  returned  with  some 
such  notation  thereon,  as  follows : 

' = Company  respectfully  submits  that 

it  is  in  doubt  as  to  its  liability  to  make  this  affi- 
davit,' enclosing  the  filing  fee  of  $1.00.  Would 
this  clear  the  corporation  of  all  liability  to  pay 
the  fine  of  $50  per  day?  Would  it  place  the  cor- 
poration in  a  weaker  position,  if  attacked!  Would 
it,  in  your  opinion,  be  likely  to  cause  attack  on 
such  corporations  ?  What  course  would  you  advise 
a  corporation  so  situated  to  follow?" 
The  Act  provides  that  the  officer  of  the  corporation 
shall  make  an  affidavit  that  the  corporation 

"has  not,  since  the day  of—  —(naming  the  day 

upon  which  this  Act  takes  effect),  created,  entered 
into  or  become  a  member  of,  or  a  party  to,  and 

was  not,  on  the day  of ,  nor  at  any  day 

since  that  date,  and  is  not  now,  a  member  of  or 
a  .party  to  any  pool,  trust,  agreement,  combina- 
tion, confederation  or  understanding  with  any 
other  corporation,  partnership,  individual  or  any 
other  person  or  association  of  persons,  to  regu- 
late or  fix  the  price  of  any  article  of  merchandise 
or  commodity;  and  that  it  has  not  entered  into 
or  become  a  member  of  or  a  party  to  any  pool, 
trust,  agreement  or  contract,  combination  or  con- 
federation to  fix  or  limit  the  amount  or  quantity 
of  any  article,  commodity  or  merchandise  to  be 
manufactured,  mined,  produced  or  sold  in  this 
State ;  and  that  it  has  not  issued  and  does  not  own 
any  trust  certificates,  and  for  any  corporation, 
agent,  officer  or  employe  or  for  the  directors  or 
stockholders  of  any  corporation,  has  not  entered 


184 

into  and  is  not  now  in  any  combination,  contract 
or  agreement  with  any  person  or  persons,  corpo- 
ration or  corporations,  or  with  any  stockholder  or 
director  thereof,  the  purpose  and  effect  of  which 
said  combination,  contract  or  agreement  would 
be  to  place  the  management  or  control  of  such 
combination  or  combinations,  or  the  manufactured 
product  thereof,  in  the  hands  of  any  trustee  or 
trustees  with  the  intent  to  limit  or  fix  the  price  or 
lessen  the  production  and  sales  of  any  article  of 
commerce,  use  or  consumption,  or  to  prevent,  re- 
strict or  diminish  the  manufacture  or  output  of 
any  such  article. ' ' 

If  the  corporation  has  not  violated  any  of  the  pro- 
visions of  the  Act,  it  can  truthfully  make  the  affidavit. 
If  it  has  violated  the  Act  it  can  make  the  affidavit  and 
it  will  be  protected  from  prosecution  as  the  law  pro- 
vides : 

"Provided,  that  no  corporation,  firm,  associa- 
tion or  individual  shall  be  subject  to  any  criminal 
prosecution  by  reason  of  anything  truthfully  dis- 
closed by  the  affidavit  required  by  this  Act,  or 
truthfully  disclosed  in  any  testimony  elicited  in 
the  execution  thereof." 

If  the  corporation  is  in  doubt  as  to  whether  or  not  it 
has  violated  the  law,  it  is  not  bound  by  the  form  of 
the  affidavit  which  the  Secretary  of  State  sends  to  each 
corporation.  It  can  add  to  the  affidavit  a  statement 
that  it  has  entered  into  a  certain  arrangement  or  has 
made  a  certain  contract,  and  thus  it  will  be  protected 
from  prosecution  for  the  offense  disclosed. 

In  my  opinion,  no  good  purpose  would  be  subserved 
by  stating  that  the  corporation  is  in  doubt  as  to  its 
ability  to  make  the  affidavit.  Such  procedure  would 
not  be  in  compliance  with  the  law,  and  would  not  pro- 
tect the  corporation  against  the  penalties  of  the  Act. 

Although  the  Supreme  Court  of  Illinois  has  de- 
clared the  law  in  question  constitutional,  the  matter 
has  not  been  adjudicated  by  the  United  States  Su- 
preme Court.  It  is  expected  that  in  due  course  the 
matter  will  be  finally  adjudicated  there. 


185 

AS  TO  WHETHER  THE  THURINGIA  INSURANCE  TO  THE  EF- 
FECT THAT  A  LANDLORD  CANNOT  RECOVER  ON  A  FIRE  IN- 
SURANCE POLICY  WHERE  HIS  TENANT  VIOLATES  ONE  OF 
ITS  PROVISIONS,  IS  GOOD  LAW. 

(Selz,  Schwab  &  Co.,  May  29,  1903.) 
"As  insurance  man  for  this  firm  I  write  for 
further  information  about  the  Thuringia  insurance 
decision.  The  opinion  submitted  by  Mr.  Levy 
Mayer  seems  to  be  a  statement  of  the  fact  but 
offers  no  opinion  as  to  whether  the  decision  in 
this  case  is  considered  good  law,  and  whether  it 
could  not  be  knocked  out." 

This  decision  is  based  upon  the  theory  that  where 
a  landlord  insures  his  premises  and  covenants  that 
there  will  not  be  kept  on  the  insured  premises  any 
naphtha,  benzine  or  other  inflammable  product,  the 
landlord  is  liable  for  the  acts  of  his  tenants  or  other 
persons  who  occupy  the  premises  under  his  authority. 
This  doctrine  is  sustained  by  a  great  many  authori- 
ties. 

In  Liverpool  &  London  Insurance  Co.  v.  Gunther,  116 
IT.  S.,  113,  128,  the  United  States  Supreme  Court  in 
passing  upon  this  question  said: 

"A  violation  of  these  prohibitions  by  any  one 
permitted  by  the  assured  to  occupy  the  premises, 
is  a  violation  by  the  assured  himself.  The  com- 
pany stipulates  that  it  will  not  assume  the  risk 
arising  from  the  presence  of  the  articles  prohib- 
ited, and  if  they  are  brought  upon  the  premises 
in  violation  of  the  policy  by  one  in  whose  pos- 
session and  control  the  latter  have  been  placed 
by  the  insured,  he  assumes  the  risk  which  the  com- 
pany has  refused  to  accept." 

See  also  to  the  same  effect  cases  cited  in  Vol.  II, 
Eose's  notes  to  the  U.  S.  Reports,  p.  18,  and  cases 
cited  in  Thuringia  Ins.  Co.  v.  Norway sz,  104  111.  App., 
390. 

In  my  opinion  the  question  is  correctly  decided. 

NOTE: — The  decision  in  question  was  affirmed  by  the  Supreme  Court 
of  Illinois.     See  204  111.,   334.— Ed. 


186 


AS  TO  WHETHER  THE  ACTS  OF  A  CO-TENANT  IN  KEEPING 
BENZINE  ON  THE  PREMISES,  CAN  AFFECT  THE  RIGHT  OF 
THE  TENANT  TO  RECOVER  ON  HIS  INSURANCE  POLICY. 

(Chas.  Emmerich  &  Co.,  May  29,  1903.) 
"We  note  the  opinion  of  Mr.  Levy  Mayer  in  ref- 
erence   to    the    'Thuringia    Insurance  Decision,' 
printed  copy  of  which  was  recently  sent  us.    Will 
you  kindly  advise  us  if  this  decision  applies  also 
to  co-tenants  if  another  tenant  in  the  building 
violates  the  provisions  of  the  policy?" 
I  do  not  fully  understand  the  question.     If  the  in- 
surance is  taken  out  by  a  tenant  and  the  policy  pro- 
vides that  there  will  not  be  kept  or  allowed  upon  the 
insured  premises  any  naphtha  or  other  inflammable 
product,  the  insured  will  not  be  liable  for  the  acts  of 
a  co-tenant  who  keeps  such  product  in  another  part 
of  the  building  occupied  by  such  co-tenant. 

The  Thuringia  Insurance  Co.  decision  is  based  upon 
the  theory  that  the  landlord  who  insures  his  premises 
and  covenants  that  no  inflammable  product  will  be 
kept  thereon,  is  liable  for  the  acts  of  his  tenants  who 
occupy  the  premises  by  his  permission.  The  rule  can- 
not be  extended  to  acts  of  another  tenant  over  whom 
the  insured  has  no  control  and  who  sustains  no  relation 
to  such  tenant.  The  covenant  in  the  policy  will  relate 
only  to  the  premises  covered  by  the  policy  and  occu- 
pied by  the  insured  or  his  tenants,  and  will  not,  unless 
so  provided  in  the  policy,  be  extended  to  other  prem- 
ises in  the  same  or  adjoining  buildings. 

NOTE: — See  note  to  preceding  opinion. — Ed. 
CONSTITUTIONALITY  OF  THE  CHILD  LABOR  LAW  OF  ILLINOIS. 

(Streator  Bottle  &  Glass  Company,  June  2,  1903.) 

"We  wish  to  have  an  opinion  on  the  legality  of 
the  child  labor  law  passed  at  last  session  of  the 
legislature,  known  as  House  Bill  No.  634,  intro- 
duced by  the  committee  on  labor  and  industrial 


187 

affairs  March  11,  1903.  This  is  an  act  to  regulate 
the  employment  of  children  in  the  State  of  Illinois, 
and  to  provide  for  the  enforcement  thereof.  Sec- 
tion 10  of  this  bill  affects  our  business  very  much. 
By  referring  to  said  bill  you  will  notice  it  reads 
as  follows :  'No  person  under  the  age  of  16  years 
shall  be  employed,  permitted  or  suffered  to  work 
at  any  gainful  occupation  more  than  48  hours  per 
week,  or  more  than  eight  hours  in  any  one  day, 
or  before  the  hours  of  7  o  'clock  in  the  morning,  or 
after  the  hours  of  7  o  'clock  in  the  evening. '  Under 
the  present  law,  we  are  permitted  to  employ  boys 
over  fourteen  years  of  age  in  our  glass  factories 
both  day  and  night.  These  boys  work  at  the  pres- 
ent time  8|  hours  per  day,  and  the  same  at  night. 
The  enforcement  of  this  last  mentioned  law,  passed 
by  the  legislature,  will  work  great  injury  to  our 
business,  as  well  as  several  other  manufacturers 
in  the  same  line  in  the  state  of  Illinois.  We  are 
of  the  opinion  that  the  portion  of  the  new  law, 
which  makes  the  working  hours  of  boys  over  14 
and  under  16,  eight  hours  per  day,  and  between 
certain  hours,  and  prevents  boys  of  the  same  age 
from  working  at  night,  is  class  legislation,  and  not 
constitutional. 

Will  you  kindly  secure  for  us  an  opinion  from 
the  Illinois  Manufacturers'  Association's  attorney, 
covering  the  inquiry  we  have  made1?" 
The  act  was  approved  May  15,  1903  (in  force  July 

1,  1903),  and  is  entitled: 

4 'An  Act  to  regulate  the  employment  of  chil- 
dren in  the  State  of  Illinois,  and  to  provide  for 
the  enforcement  thereof. ' ' 
Section  1  provides  that  no  child  under  14  years  of 

age  shall  be  employed 

"at  any  gainful  occupation  in  any  theatre  ! 
mercantile  establishment,  store,  office,  *  *  man- 
ufacturing establishment  *  *  '  factory  or  work- 
shop or  as  a  messenger  or  driver  therefor  within 
this  state.  That  no  such  child  shall  be  employed 
at  any  work  performed  for  wages  or  other  com- 


188 

pensation  to  whomsoever  payable,  during  any  por- 
tion of  any  month  when  the  public  schools  of  the 
town,  township,  village  or  city  in  which  he  or  she 
resides  are  in  session,  nor  be  employed  at  any 
work  before  the  hour  of  seven  o  'clock  in  the  morn- 
ing or  after  the  hour  of  six  o  'clock  in  the  evening. 
Provided  that  no  child  shall  be  allowed  to  work 
more  than  eight  hours  in  any  one  day. ' ' 
Section  2  provides  that  a  register  shall  be  kept  of 
the  name,  age  and  residence  of  every  child  between 
the  ages  of  14  and  16,  and  provides  that  no  such  child 
shall  be  employed  unless  there  is  first  produced  and 
placed  on  file  an  age  and  school  certificate  as  herein- 
after provided. 

Section  3  provides  that  every  employer  employing 
more  than  five  children  between  the  ages  of  fourteen 
and  sixteen  years,  shall  keep  posted  in  a  conspicuous 
place  in  every  room  in  which  such  help  is  employed,  a 
list  containing  the  name,  age  and  place  of  residence 
of  such  children  in  such  room. 

Section  4  provides  that  no  such  child  shall  be  em- 
ployed unless  there  is  produced  and  kept  on  file  an 
age  and  school  certificate,  as  hereinafter  prescribed, 
and  unless  there  is  kept  on  file  and  produced  on  de- 
mand of  the  factory  inspectors,  a  complete  and  cor- 
rect list  of  all  minors  under  the  age  of  sixteen  so  em- 
ployed who  cannot  read  at  sight  and  write  legibly  sim- 
ple sentences,  unless  such  child  is  attending  night 
school  as  hereinafter  provided. 

Section  5  provides  that  an  age  and  school  certificate 
shall  be  approved  only  by  the  superintendent  or  by  a 
person  authorized  by  him  in  writing,  or  where  there  is 
not  a  superintendent,  by  a  person  authorized  by  the 
School  Board.  The  superintendent  or  principal  of  a 
parochial  school  shall  also  have  the  right  to  approve 
such  certificate  and  shall  have  the  same  powers  to  ad- 
minister oaths  as  the  superintendent  for  children  at- 
tending parochial  schools.  No  person  shall  approve 
a  certificate  for  a  child  about  to  enter  his  own  estab- 
lishment or  a  firm  where  such  person  is  a  member, 
officer  or  employe. 


189 

Section  6  provides  that  a  certificate  shall  not  be 
issued  unless  satisfactory  proof  of  age  is  furnished. 

Section  7  provides  that  the  age  and  school  certificate 
shall  not  be  approved  until  there  is  presented  a  school 
attendance  certificate,  a  duplicate  of  which  shall  be 
forwarded  to  the  State  Factory  Inspector's  Office,  and 
the  form  of  which  is  prescribed  in  the  Act. 

In  the  case  of  a  child  who  is  illiterate,  the  certificate 
shall  state  that  such  child  is  regularly  attending  even- 
ing school. 

Section  8  provides  that  no  child  between  the  ages  of 
fourteen  and  sixteen  who  is  illiterate  shall  be  em- 
ployed while  a  public  evening  school  is  in  session. 

Section  9  prescribes  the  duties  of  the  state  factory 
inspectors  as  to  the  enforcement  of  the  Act. 
Section  10  provides : 

"  Hours  of  Labor.  No  person  under  the  age  of 
sixteen  years  shall  be  employed  or  suffered  or  per- 
mitted to  work  at  any  gainful  occupation  more 
than  forty-eight  hours  in  any  one  week,  nor  more 
than  eight  hours  in  any  one  day;  or  before  the 
hour  of  seven  o'clock  in  the  morning  or  after 
the  hour  of  seven  o'clock  in  the  evening.  Every 
employer  shall  post  in  a  conspicuous  place  in 
every  room  where  such  minors  are  employed  a 
printed  notice,  stating  the  hours  required  of  them 
each  day  of  the  week,  the  hours  of  commencing 
and  stopping  work  and  the  hours  when  the  time  or 
times  allowed  for  dinner  or  for  other  meals  be- 
gins and  ends.  The  printed  form  of  such  notice 
shall  be  furnished  by  the  state  inspector  of  fac- 
tories, and  the  employment  of  any  such  minor  for 
longer  time  in  any  day  so  stated  shall  be  deemed 
a  violation  of  this  section. ' ' 
Section  11  provides : 

"Employments  Forbidden  Children  Under 
Sixteen  Years  of  Age.  No  child  under  the  age  of 
sixteen  years  shall  be  employed  at  sewing  belts, 
or  to  assist  in  sewing  belts,  in  any  capacity  what- 
ever; nor  shall  any  child  adjust  any  belt  to  any 
machinery;  they  shall  not  oil  or  assist  in  oiling, 


190 

wiping  or  cleaning  machinery ;  they  shall  not  ope- 
rate or  assist  in  operating  circular  or  band  saws, 
wood-shapers,  wool-jointers,  planers,  sandpaper 
or  wood-polishing  machinery,  emery  or  polishing 
wheels  used  for  polishing  metal,  wood-turning  or 
boring  machinery,  stamping  machines  in  sheet 
metal  and  tinware  manufacturing,  stamping  ma- 
chines in  washer  and  nut  factories,  operating  cor- 
rugating rolls,  such  as  are  used  in  roofing  facto- 
ries, nor  shall  they  be  employed  in  operating  any 
passenger  or  freight  elevators,  steam  boilers, 
steam  machinery,  or  other  steam  generating 
apparatus,  or  as  pin  boys  in  any  bowling  alleys ; 
they  shall  not  operate  or  assist  in  operating  dough 
brakes,  or  cracker  machinery  of  any  description; 
wire  or  iron  straightening  machinery;  nor  shall 
they  operate  or  assist  in  operating  rolling  mill 
machinery,  punch  or  shears,  washing,  grinding  or 
mixing  mill  or  calendar  rolls  in  rubber  manufac- 
turing, nor  shall  they  operate  or  assist  in  operat- 
ing laundry  machinery;  nor  shall  children  be  em- 
ployed in  any  capacity  in  preparing  any  composi- 
tion in  which  dangerous  or  poisonous  acids  are 
used,  and  they  shall  not  be  employed  in  any  capac- 
ity in  the  manufacture  of  paints,  colors  or  white 
lead;  nor  shall  they  be  employed  in  any  capacity 
whatever  in  operating  or  assisting  to  operate  any 
passenger  or  freight  elevator;  nor  shall  they  be 
employed  in  any  capacity  whatever  in  the  manu- 
facture of  goods  for  immoral  purposes,  or  any 
other  employment  that  may  be  considered  danger- 
ous to  their  lives  or  limbs,  or  where  their  health 
may  be  injured  or  morals  depraved;  nor  in  any 
theatre,  concert  hall,  or  place  of  amusement  where- 
in intoxicating  liquors  are  sold;  nor  shall  females 
under  sixteen  years  of  age  be  employed  in  any 
capacity  where  such  employment  compels  them  to 
remain  standing  constantly." 
Section  12  provides : 

"Prima  Facie  Evidence  of  a  Child's  Employ- 
ment.   The  presence  of  any  person  under  the  age 


191 

of  sixteen  years  in  any  manufacturing  establish- 
ment, factory  or  workshop,  shall  constitute  prima 
facie  evidence  of  his  or  her  employment  therein." 

Section  13  provides  that  it  shall  be  the  duty  of  the 
State  Factory  Inspector  to  enforce  the  act. 

Section  14  prescribes  a  penalty  for  the  offense  of  em- 
ployng  a  child  in  violation  of  the  act,  of  a  fine  of  not 
less  than  $5  nor  more  than  $25.  A  failure  to  produce 
any  age  or  school  certificate  or  lists  required  by  the  act 
is  punishable  by  a  fine  of  not  less  than  $5  nor  more 
than  $50.  A  false  certification  is  punishable  by  a 
fine  of  not  less  than  $5  nor  more  than  $100. 

Any  person,  firm  or  corporation,  whether  for  him- 
self or  another,  who  violates  or  fails  to  comply  with  the 
provisions  of  the  act  or  who  refuses  admittance  to 
premises  or  otherwise  obstructs  the  factory  inspectors 
in  the  performance  of  their  duties,  is  subject  to  a  fine 
of  not  less  than  $5  nor  more  than  $100  for  each  of- 
fense. 

The  act  in  question  is  passed  under  the  police  power 
of  the  state.  The  extent  of  the  exercise  of  that  power 
rests  within  the  wise  discretion  of  the  legislative  body. 
Under  this  power  the  legislature  supervises  the  peace, 
good  order,  health,  morals  and  general  welfare  of  the 
community,  and  the  courts  will  not  review  the  legiti- 
mate exercise  of  this  legislative  discretion. 

In  my  opinion  the  courts  will  hold  that  the  act  under 
consideration  tends  to  promote  the  health  and  morals 
of  the  community.  Laws  similar  in  spirit  have  been 
sustained  by  the  courts — laws  looking  to  the  compul- 
sory education  of  children  by  their  parents  and  to  the 
punishment  of  parental  cruelty  or  neglect.  Of  the 
same  nature  are  laws  limiting  and  regulating  the  em- 
ployment of  children  in  factories  or  workshops.  In- 
cidental to  and  in  virtue  of  its  sovereignty,  the  State 
as  parens  patriae  owes  a  duty  to  all  its  citizens,  and 
this  duty  may  be  legitimately  invoked  for  the  protec- 
tion of  children  or  any  other  dependent  class. 

In  my  opinion  there  is  no  undue  restraint  placed  on 
personal  liberty  by  this  law  because  the  law  does  not 
transcend  the  proper  exercise  of  the  police  power.  I 


192 

do  not  think  that  the  law  can  be  attacked  on  the  ground 
that  it  is  in  restraint  of  the  right  to  contract.  Similar 
laws  have  been  held  constitutional  in  other  states. 

People  v.  McEwen,  141  N.  Y.  129 ;  s.  c.,  25  L. 

B.  A.,  794. 
Commonwealth  v.  Beatty,  15  Pa.  Super.  Ct., 

5. 

Commonwealth  v.  Hamilton,  120  Mass.,  383. 
Cooley's  Constitutional  Limitations,  p.  745. 
The  question  has  not  been  squarely  passed  upon  by 
the  Supreme  Court  of  Illinois.     There  is,  however,  a 
tacit  recognition  of  the  doctrine  in  some  of  the  cases. 
In  Ritchie  v.  People,  155  111.,  98,  where  the  Supreme 
Court  held  the  eight-hour  law  unconstitutional,   the 
court  said: 

"We  do  not  wish  to  be  understood  by  anything 
herein  said  as  holding  that  section  five  (5)  would 
be  invalid  if  it  was  limited  in  its  terms  to  females 
who  are  minors." 

The  court  quotes  with  approval  from  Ex  parte 
Kuback,  85  Cal.,  274,  where  the  Supreme  Court  of  Cali- 
fornia recognized  the  validity  of  laws  for  the  pro- 
tection of  females  and  infants.  A  careful  reading  of 
the  Ritchie  case  will  demonstrate  that  the  court  there 
recognizes  the  principle  that  a  law  regulating  the  em- 
ployment of  minors  is  a  valid  exercise  of  the  police 
power. 

In  view  of  the  express  adjudication  of  the  courts  of 
other  states  and  the  dicta  of  our  Supreme  Court,  I  am 
of  the  opinion  that  the  courts  of  Illinois  will  uphold  the 
present  law. 


THE  LIABILITY  OP  A  CARRIES  FOR  LOSSES  BY  FLOODS  AND 
UPON  WHOM  THE  LOSS  FALLS  AS  BETWEEN  CONSIGNOR 
AND  CONSIGNEE. 

(Selz,  Schwab  &  Co.,  June  18,  1903.) 
Dear  Sir:     I  have  your  communications  enclosing 
correspondence  between  Selz,  Schwab  &  Co.,  their  cus- 
tomers and  the  railroads,  growing  out  of  the  loss  of 


193 

goods  in  transit  during  the  recent  floods.  My  opinion 
is  asked  as  to  whether  or  not  the  railroad  company  is 
liable  for  the  losses  caused  by  the  floods,  and,  if  not, 
whether  the  consignor  or  the  consignee  must  stand 
the  loss.  Common  carriers  are  insurers  of  the  goods 
entrusted  to  their  care  for  purposes  of  transportation, 
and  they  are  liable  for  any  loss  or  damage  which  hap- 
pens while  the  goods  are  in  their  custody.  Where, 
however,  such  loss  or  damage  is  caused  by  the  act  of 
God,  such  as  floods,  storms,  tempests  and  the  like, 
the  carrier  is  not  liable,  and  the  loss  must  fall  upon 
the  owner,  and  not  upon  the  carrier.  The  maxim 
res  perit  suo  domino,  applies.  (Broom's  Legal  Max- 
ims, and  cases  there  cited.) 

In  Coggs  v.  Bernard,  1  Smith's  Leading  Cases,  (9th 
Am.  Ed.)  354,  "act  of  God"  is  defined  with  precision 
to  cover 

"those  losses  that  are  occasioned  exclusively  by 
the  violence  of  nature;  by  that  kind  of  force  of  the 
elements,  which  human  ability  could  not  have  fore- 
seen or  prevented;  such  as  lightning,  tornadoes, 
sudden  squalls  of  wind, ' '  etc. 

The  courts  hold  that  floods,  which  no  human  power 
could  stay,  and  no  foresight  or  prudence  anticipate, 
is  an  act  of  God,  which  will  relieve  a  carrier  who  is 
free  from  negligence  from  liability  for  damages  by 
the  floods  to  goods  in  his  custody.  Smith  v.  W.  G.  Ry. 
of  Alabama,  11  L.  R.  A.,  619. 

The  carrier  is  bound  to  lessen  injurious  effects  of  a 
calamity  caused  by  an  act  of  God,  by  pursuing  a  rea- 
sonable course  of  conduct  towards  the  property  placed 
under  his  charge  for  carriage.  He  should  apply  the 
proper  means  of  preserving  from  destruction  whatever 
may  remain,  as  in  drying,  re-packing,  repairing  and 
separating  the  spoiled  from  the  unspoiled.  But  he 
would  not  be  justified  in  forwarding  merely  for  the 
sake  of  earning  the  freight  on  goods,  which  plainly 
are  too  far  damaged  to  be  worth  to  the  owner  the  cost 
of  further  transportation,  but  the  carrier  should  rather 
send  for  instructions,  or  else  sell  the  goods  on  the 
spot  for  what  they  will  bring ;  for  he  is  bound  to  regard 


194 

his  customer's  interest  as  well  as  his  own  in  such  a 
calamity.  Nor,  again,  is  the  carrier  bound  to  sus- 
pend his  journey  to  the  undue  prejudice  of  other  ship- 
pers, in  order  that  injury  to  the  property  of  one  con- 
signee may  be  repaired ;  for  the  general  welfare  of  the 
property  in  his  care  must  always  be  considered. 
Schouler  on  Bailments  and  Carriers,  Sec.  404. 

In  all  cases  of  loss,  the  onus  probandi  is  on  the  car- 
rier to  exempt  himself  rrom  liability;  for  prima  facie 
the  law  imposes  the  obligation  of  safety  upon  him. 
Story  on  Bailments,  Sec.  529,  and  cases  cited. 

In  Nashville,  etc.,  Ry.  v.  David,  6  Heisk  (Tenn.),  261, 
it  was  shown  that  an  unprecedented  flood  had  occurred 
at  Chattanooga,  on  the  Tennessee  River,  the  water 
having  risen  some  fifteen  feet  above  what  was  known 
as  the  highest  water  mark  at  the  locality  made  by 
previous  overflows  or  freshets  in  the  river.  It  was  also 
shown  that  the  road  and  its  depot  were  located  on 
ground  higher  than  this  water  mark.  The  goods 
reached  Chattanooga  before  the  water  had  become  so 
high  as  to  interfere  with  travel  on  the  road;  but  be- 
fore they  could  be  forwarded  from  that  place,  it  rose 
above  the  track  and  at  last  submerged  the  track  of 
the  road  and  its  depot  some  ten  or  twelve  feet,  whereby 
the  goods  were  injured.  It  was  held  that  under  these 
circumstances,  if  it  also  appeared  that  the  agents  of 
the  road  had  used  such  diligence  as  prudent,  skillful 
men  engaged  in  that  kind  of  business  might  fairly  be 
expected  to  use  under  the  like  circumstances,  to  pro- 
tect and  secure  the  property  confided  to  their  care,  the 
carrier  ought  to  be  excused. 

In  Read  v.  Spaulding,  30  N.  Y.,  930,  where  it  ap- 
peared also  that  the  damage  to  the  goods  had  been 
caused  by  an  extraordinary  rise  in  the  Hudson  River, 
it  was  conceded  without  argument,  and  stated  as  un- 
questionable law,  that  such  an  occurrence  would  ex- 
cuse the  carrier  as  the  act  of  God,  if  it  could  be  shown 
that  no  fault  or  negligence  could  be  imputed  to  him, 
which  has  contributed  to  the  loss. 

The  act  of  God  will  not,  however,  excuse  the  carrier 
where  the  goods  are  destroyed  after  he  has  wrongfully 


195 

refused  to  deliver  them  to  the  consignee  upon  pres- 
entation of  the  bill  of  lading.  Richmond,  etc.,  R.  Co., 
v.  Benson,  12  S.  E.  (Ga.),  357. 

Where  the  destruction  is  due  to  the  act  of  God,  even 
where  the  loss  would  not  have  occurred  but  for  the 
carrier's  unreasonable  delay,  the  weight  of  authority 
seems  to  be  that  the  act  of  God  is  the  proximate  cause 
of  the  loss,  and  the  carrier  escapes  liability.  Hutchin- 
son  on  Carriers,  Sec.  193,  and  cases  cited.  The  United 
States  Supreme  Court  in  Railroad  Co.  v.  Reeves,  10 
Wall.,  176,  has  held  that  in  such  a  case  the  carrier  is 
not  liable.  And  see  Vol.  7,  Rose's  Notes  to  U.  S. 
Rep.,  p.  297. 

The  carrier,  therefore,  under  the  authorities,  not 
being  liable  for  losses  caused  by  floods,  for  the  rea- 
son that  floods  are  considered  an  act  of  God,  the  ques- 
tion remains,  upon  whom  does  the  loss  fall!  The 
loss  falls  upon  the  owner  of  the  goods  at  the  time  the 
loss  occurs.  Who  is  the  owner  depends  upon  the  con- 
tract between  the  consignor  and  the  consignee  (vendor 
and  vendee)  and  the  facts  and  circumstances  of  each 
case.  The  general  rule  is  that  where  a  vendor  de- 
livers goods  to  a  carrier  by  order  of  the  purchaser, 
the  delivery  to  the  carrier  is  a  delivery  to  the  vendee, 
and  the  title  to  the  property  vests  immediately  in  the 
consignee.  Benjamin  on  Sales,  Sec.  409,  and  cases 
cited. 

Where  the  vendor  is  bound  to  send  the  goods  to  the 
purchaser  the  rule  is  well  established  that  delivery  to 
a  common  carrier,  a  fortiori  to  one  specially  desig- 
nated by  the  purchaser,  is  a  delivery  to  the  vendee, 
the  carrier  being,  in  contemplation  of  law  in  such 
cases,  the  bailee  of  the  person  to  whom,  not  by  whom, 
the  goods  are  sent;  the  latter,  when  employing  the 
carrier,  being  regarded  as  the  agent  of  the  former  for 
that  purpose. 

But  if  the  vendor  undertakes  to  make  a  delivery  at  a 
distant  place,  thus  assuming  the  risks  of  carriage,  the 
carrier  is  the  vendor 's  agent,  and  the  title  to  the  goods 
remains  is  the  consignor.  This  may  occur  where  goods 
are  sent  "F.  0.  B.  destination,"  or  sent  on  approval, 


196 

or  with  privilege  of  examination.  The  same  rule  ap- 
plies if  the  goods  are  sent  "C.  0.  D."  Benjamin  on 
Sales,  p.  687,  although  upon  this  proposition  the  de- 
cisions of  the  courts  are  not  harmonious. 

If  the  vendor  agrees  to  deliver  the  goods  at  the 
residence  or  place  of  business  of  the  buyer,  he  incurs 
loss  arising  from  damages  to  the  goods  in  the  course 
of  transportation.  But  where  there  is  no  positive 
agreement  to  that  effect,  a  delivery  to  the  common 
carrier  for  transportation  to  the  vendee,  whether  in 
accordance  with  his  express  or  implied  instructions, 
is  held  to  be  a  delivery  to  the  vendee  himself.  And 
delivery  at  the  carrier's  wharf  or  warehouse,  to  some 
receiving  clerk,  would  ordinarily  be  a  sufficient  de- 
livery to  the  carrier,  in  order  to  pass  title  and  risk  to 
the  vendee.  But  this  is  not  the  case,  where  the  seller 
determines,  or  the  contract  requires  him,  to  make  the 
common  carrier  his  own  agent. 

The  common  method  of  reserving  title  and  pos- 
session after  delivery  to  the  carrier,  is  to  have  the 
bill  of  lading  written  up  in  the  shipper's  name,  and 
the  goods  deliverable  to  the  shipper's  order.  When- 
ever this  is  done,  the  common  carrier  is  an  agent  of 
the  seller,  and  there  is  no  delivery  of  possession  until 
the  bill  of  lading  has  been  endorsed  and  transferred. 

But  in  making  delivery  to  a  common  carrier,  in 
order  to  throw  the  risk  on  the  consignee,  the  con- 
signor must  take  every  precaution  to  insure  a  safe 
delivery  to  the  consignee.  Any  mistake  in  the  ad- 
dress, or  in  the  notice  to  the  carrier  of  the  character 
of  the  goods,  and  the  like,  whereby  loss  of,  or  damage 
to  the  goods  results,  will  make  the  vendor  responsible. 
And  any  deviation  from  the  express  instructions  of 
the  consignee,  or  any  change  by  the  consignor  in  the 
direction  for  transportation  after  the  goods  have  been 
given  to  the  carrier  would  operate  to  retain  the  pos- 
session and  title  in  the  consignor  and  prevent  the 
transfer  of  them  to  the  consignee.  Tiedman  on  Sales, 
Sec.  95. 

The  title  to  the  goods  may  pass  to  the  consignee  by 
delivery  of  the  bill  of  lading  even  though  the  title 


197 

to  the  goods  when  shipped  was  in  the  consignor.  A 
bill  of  lading  is  the  representative  of  the  property  for 
which  it  is  given  and  its  delivery  is  a  symbolical  de- 
livery of  the  goods.  The  fact  that  the  bill  of  lading 
is  made  ''deliverable  to  the  order  of  the  vendor," 
when  not  rebutted  by  evidence  to  the  contrary,  shows 
an  intention  by  the  consignor,  to  preserve  the  jus 
disponendi,  and  to  prevent  the  title  to  the  property 
from  passing  to  the  consignee.  Where  a  draft  for 
the  price  of  the  goods  is  sent  to  the  consignee  for  ac- 
ceptance or  payment,  together  with  the  bill  of  lading, 
the  title  does  not  vest  in  the  vendee  before  acceptance 
or  payment  of  the  draft,  and  the  delivery  of  the  bill  of 
lading,  as  the  case  may  be. 

When  the  vendor  deals  with  the  bill  of  lading  only 
to  secure  the  contract  price  as  e.  g.  by  depositing  it 
with  bankers  who  have  discounted  the  draft,  then  the 
property  vests  in  the  vendee  upon  the  payment  or 
tender  by  him  of  the  contract  price.  Benjamin  on 
Sales,  Sec.  457,  et  seq. 

The  foregoing  cases  demonstrate  that  if  the  loss  is 
caused  by  the  act  of  God,  it  must  fall  upon  the  per- 
son who  has  title  to  the  goods  at  the  time  of  the 
loss,  and  in  whom  the  title  is  depends  upon  the  contract 
and  the  surrounding  facts  and  circumstances  of  each 
particular  case. 

If,  however,  the  floods  in  question  were  not  the 
proximate  cause  of  the  loss,  the  carrier  is  liable,  and 
the  right  of  action  against  him  is  in  the  owner.  In 
each  particular  case,  the  ownership  can  be  readily  de- 
duced from  the  principles  already  given. 

In  support  of  the  above  opinion,  see  the  following 
authorities : 

Blythe  &  Lehman  v.  D.  &  R.  G.  R.  R.,  11  L. 
R.  A.,  615  (Colo.),  and  brief. 

Wald  v.  P.  C.  C.  &  St.  L.  R.,  60  111.  App.,  462 ; 
s.  c.,  162  111.,  545. 

Nashville  R.  R.  Co.  v.  David,  6  Heisk  (Tehn.), 
261. 

Lang  v.  Pa.  Ry.,  154  Pa.,  342 ;  s.  c.,  20  L.  E. 
A.,  36. 


198 

Long  v.  P.  R.  R.,  14  L.  E.  A.,  741  (Pa.). 

Am.  &  Eng.  Ency.  of  Law,  Vol.  5,  p.  234,  cit- 
ing cases. 

Mich.  Cent.  R.  R.  v.  Phillip,  60  111.,  190. 

Webster  v.  Granger,  78  111.,  230. 

Peters  v.  Elliott,  78  111.,  321. 

Stafford  v.  Walter,  67  111.,  83. 

Devine  v.  Edwards,  101  111.,  138. 

Lewis  v.  Bank,  166  111.,  311. 

7«.  Cent.  v.  tfowfc,  41  111.  App.,  287. 

Commercial  Bk.  v.  R.  R.  Co.,  160  111.,  401. 

Thomas  v.  ^irsJ  Na£.  Bk.,  66  Ill.App.,  56. 

Bead  v.  Spaulding,  30  N.  Y.,  630. 

Richmond  v.  Benson,  12  S.  E.  Rep.,  357  (Ga.). 

Taylor  v.  CoZo.,  Ill  Mass.,  363. 

Memphis,  etc.,  R.  Co.  v.  Reeves,  10  Wall.,  176. 

Vol.  7  Rose's  Notes  to  U.  S.  Reps.,  p.  297. 

Vol.  1  Ency.  of  Law  (2nd  Ed.),  596. 

Schouler,  Bailments  and  Carriers,  Sec.  404 
(2nd  Ed.). 

Benjamin  on  Sales  (3rd  Ed.),  pp.  305,  328, 
687,  457. 

Tiedeman  on  Sales  (1st  Ed.),  Sec.  95. 

Tiffany  on  Sales  (1st  Ed.),  pp.  181,  195,  61, 
104,  211. 

Brom's  Legal  Maxims,  p.  234. 

Jones  on  Bailments  (1st  Ed.),  p.  104. 

Story  on  Bailments  (6th  Ed.),  Sec.  529. 

Hutchinson  on  Carriers  (2nd  Ed.),  Sec.  178. 


AS  TO  WHETHER  A  NEW  AFFIDAVIT  WILL  BE  REQUIRED 
UNDER  THE  CHILD  LABOR  LAW  WHICH  GOES  INTO  EFFECT 
JULY  1,  1903. 

(Illinois  Manufacturers'  Association,  June  19,  1903.) 
"If  the  affidavit  required  by  the  present  child 
labor  law  will  be  effective  under  the  statute 
passed  by  the  last  legislature,  taking  effect  July 
1st,  or  whether  a  new  affidavit  will  have  to  be 
procured." 


199 

I  have  examined  "A  Bill  for  an  Act  to  regulate 
the  employment  of  children  in  the  State  of  Illinois, 
and  to  provide  for  the  enforcement  thereof,"  known 
as  House  Bill  No.  634,  being  the  bill  you  refer  to 
as  taking  effect  on  July  1st,  and  also  the  statute  en- 
titled: "An  Act  to  regulate  the  employment  of  chil- 
dren in  the  State  of  Illinois,  and  to  provide  for  the 
enforcement  thereof,"  being  Section  33  et  seq.,  of 
Chap.  48  of  the  Revised  Statutes. 

Under  Section  5  of  the  new  law,  it  is  provided  that : 
"An  age  and  school  certificate  shall  be  approved 
only  by  the  Superintendent  of  Schools,  or  by  a 
person  authorized  by  him,  in  writing. 
Under  Section  6  of  that  Act  it  is  provided  that : 

"An  age  and  school  certificate  shall  not  be  ap- 
proved unless  satisfactory  evidence  is  furnished 
by  the  last  school  census,  the  certificate  of  birth 
or  baptism  of  such  child,  the  register  of  birth 
of  such  child  with  a  town  or  city  clerk,  or  by  the 
records  of  the  public  or  parochial  schools  that 
such  child  is  of  the  age  stated  in  the  certificate; 
Provided,  that  in  cases  arising  wherein  the  above 
proof  is  not  obtainable,  the  parent  or  guardian 
of  the  child  shall  make  an  oath  before  the  Juve- 
nile or  County  Court  as  to  the  age  of  such 
child,  and  the  court  may  issue  to  said  child  an  age 
certificate  as  sworn  to." 

Under  Section  7  of  said  Act,  the  form  of  the  ac- 
knowledgment and  certificate  is  set  out  in  full.  Sec- 
tion 34  of  the  old  act  requires  that  there  shall  be 
placed  on  file: 

"An  affidavit  made  by  the  parent  or  guardian, 
stating  the  name,  date  and  place  of  birth  of  such 
child.  If  such  child  shall  have  no  parent  or 
guardian,  then  such  affidavit  shall  be  made  by 
the  child." 

The  new  law,  therefore,  specifically  provides  before 
whom  such  affidavit  should  be  made  (the  old  law  does 
not) ;  the  new  law  further  provides  that  a  certificate 
shall  also  be  appended  to  the  affidavit  by  the  one  tak- 
ing the  acknowledgment  (the  old  law  does  not).  The 


200 

new  law  also  prescribes  that  before  such  affidavit  is 
approved,  certain  evidence  must  be  produced,  upon 
which  affidavit  and  certificate  is  made  (the  old  law 
does  not).  The  new  law  provides  (Section  15)  that 
"All  other  acts  and  parts  of  acts  in  conflict  with  this 
act  are  hereby  repealed." 

I  am  of  the  opinion,  therefore,  for  the  reasons 
above  indicated,  that  the  affidavits  required  under  the 
law  of  1897  (being  the  old  law  above  referred  to), 
are  not  such  as  are  required  by  the  law  to  take  effect 
July  1. 


WHETHER   ACKNOWLEDGMENT    OF    SALESMAN'S    ORDER    CON- 
STITUTES AN  ACCEPTANCE. 

(Weir  &  Craig  Mfg.  Co.,  July  22,  1903.) 

"We  have  Mr.  Levy  Mayer's  opinion  under 
date  of  May  25th,  in  regard  to  the  acceptance  of  a 
salesman's  order  constituting  a  contract.  We  note 
that  the  Senour  Mfg.  Co.  in  making  their  inquiry 
in  regard  to  this  matter,  say:  'It  seems  to  us  the 
question  to  decide  here  is,  does  the  taking  of  an 
order  by  a  traveling  salesman,  submitting  it  to  the 
house  and  the  acknowledgment  of  the  receipt  of 
the  same  by  the  wholesale  house,  constitute  making 
a  contract?  In  other  words,  does  the  order  sent  to 
the  wholesale  house  by  the  traveling  salesman  and 
the  acceptance  of  the  same  by  the  wholesale  mer- 
chant constitute  a  contract,  etc.' 

Is  there  not  a  difference  between  an  acknowl- 
edgment of  an  order  and  the  acceptance  of  it  ?  You 
will  note  in  the  first  paragraph  of  Mr.  Mayer's 
opinion,  that  he  states  that  the  order  obtained  by 
a  salesman  becomes  a  contract  when  it  is  accepted 
by  the  seller,  but  he  does  not  touch  on  the  point 
as  to  whether  an  acknowledgment  would  make  a 
contract. 

This  is  a  matter  which  has  given  considerable 
trouble  to  every  merchant,  and  it  would  be  well 


201 

if  some  clear  understanding  of  the  subject  could 

be  had." 

To  constitute  a  contract  there  must  be  a  meeting 
of  minds — an  offer  and  an  acceptance.  What  consti- 
tutes a  contract  depends  upon  the  circumstances  of 
the  particular  case.  A  contract  may  be  expressed  or 
be  implied  from  the  circumstances.  An  acknowledg- 
ment of  an  order  taken  by  a  traveling  salesman  may 
or  may  not  constitute  a  contract.  Much  will  depend 
upon  the  language  of  the  acknowledgment.  If  the 
acknowledgment  is  followed  by  a  silence,  this, 
under  certain  circumstances  might  be  considered 
an  acceptance  of  the  order.  If  it  is  apparent, 
however,  from  the  acknowledgment  that  a  further 
communication  is  to  be  forthcoming,  and  the 
intent  not  to  accept  the  order  at  that  time  appears,  the 
acknowledgment  does  not  complete  the  contract.  The 
question,  as  I  have  said,  must  depend  upon  the  facts  in 
each  particular  case.  The  safe  course  to  pursue  is  to 
state  in  the  acknowledgment  that  it  is  not  an  accept- 
ance. 


AS  TO   WHETHER  A  COMMISSION  SALESMAN   HAS  AUTHORITY 
TO  MAKE  CONTRACTS. 

(Francis  Beidler,  July  31, 1903.) 
' '  I  notice  your  various  opinions  sent  the  last  few 
days,  one  of  which  my  special  attention  is  called  to, 
and  that  is  the  obligation  of  salesmen's  contracts. 
I  would  like  to  have  the  information  in  addition 
to  that  as  to  what  the  obligations  on  such  contracts 
are  where  made  by  a  salesman  doing  business  for 
the  house  alone,  but  selling  on  a  commission,  and 
where  orders  are  ordinarily  recognized." 
The  liability  of  the  house  on  orders  taken  by  sales- 
men who  work  on  a  commission  basis  is  no  different 
from  the  liability  on  orders  taken  by  a  traveling  sales- 
man who  works  for  the  house  alone.    If  such  orders 
are  taken  subject  to  the  approval  of  the  house,  the 
contract  is   complete    when   accepted  by  the  house. 


202 

What  constitutes  an  acceptance  has  already  been  re- 
ferred to  in  my  prior  opinions. 

If  a  salesman  takes  an  order  without  submitting  it 
to  the  house,  the  house  is  bound  by  such  order  when 
it  is  within  the  apparent  scope  of  the  salesman's  au- 
thority. If  he  has  actual  authority  to  make  contracts 
the  contract  is,  of  course,  binding.  If  similar  orders 
previously  taken  have  been  recognized  by  the  house, 
this  is  a  recognition  of  such  agent's  authority  which 
will  estop  the  house  from  subsequently  disputing.  But, 
as  I  have  stated,  the  house  is  bound  by  all  contracts 
made  by  the  salesman  within  the  apparent  scope  of  his 
authority,  even  though  as  a  matter  of  fact  he  has  not 
actual  authority. 


AS    TO    WHETHER        PARTY    RATES        CAN    BE    RESTRICTED    TO 
THEATRICAL  PARTIES. 

(Moline  Plow  Co.,  July  22,  1903.) 

"We  had  occasion  recently  to  send  fifteen  of 
our  men  to  Kansas  City  to  repair  the  damage 
caused  by  flood  at  that  point.  When  we  purchased 
the  tickets  we  were  obliged  to  pay  full  round  trip 
rate  of  $18.50,  although  at  the  time  we  insisted 
that  we  should  be  given  the  same  rate  as  is  au- 
thorized for  theatrical  parties  of  ten  or  more.  In- 
asmuch as  time  would  not  permit  taking  the  mat- 
ter up  with  Chicago,  we  were  instructed  by  the 
Division  Passenger  Agent  at  Davenport  to  pay 
the  regular  fare  and  send  receipt  to  Chicago  for 
adjustment,  provided  any  could  be  obtained. 

We  are,  however,  this  morning  in  receipt  of  let- 
ter from  L.  M.  Allen  stating  that  he  regrets  very 
much  that  he  is  unable  to  make  any  refund  on  these 
receipts. 

It  is  our  understanding  that  the  law  provides 
that  there  shall  be  no  discrimination  in  either 
freight  or  passenger  tariffs,  and  we  see  no  reason 
why  fifteen  of  our  men  should  be  charged  in  ex- 


cess  of  the  authorized  rate  for  a  theatrical  party 
of  ten  or  more." 

The  Interstate  Commerce  Act  (Sec.  2)  prohibits  the 
charge  or  receipt  by  a  carrier  of  any  greater  or  less 
compensation  for  the  transportation  of  passengers  or 
property  than  such  carrier  charges  or  receives  for  "a 
like  and  contemporaneous  service  in  the  transporta- 
tion of  a  like  kind  of  traffic  under  substantially  similar 
circumstances  and  conditions." 

It  is  also  provided  by  Section  3  of  the  act  that  it 
shall  be  unlawful  for  any  carrier  to  make  or  give  any 
undue  or  unreasonable  preference  or  advantage  to  any 
particular  person,  etc.,  or  to  subject  any  particular 
person  to  any  undue  or  unreasonable  prejudice  or  dis- 
advantage. The  language  employed  in  Section  3,  de- 
claring it  unlawful  to  make  or  give  any  "undue  or 
unreasonable  preference  or  advantage"  to  any  par- 
ticular person,  etc.,  or  to  subject  the  same  to  any  "un- 
due or  unreasonable  prejudice  or  disadvantage,"  clear- 
ly implies  that  there  may  be  a  preference  or  advantage 
on  the  one  hand,  or  a  prejudice  or  disadvantage  on 
the  other  which  is  not  undue  or  unreasonable,  and, 
therefore,  not  in  contravention  of  the  law.  To  be  with- 
in the  statute  the  discrimination  must  be  "unjust"  and 
the  preference  or  prejudice  must  be  "undue"  or  "un- 
reasonable." The  discrimination  which  is  declared 
"unjust"  is  the  charging  and  collecting  from  any  per- 
son or  persons  a  greater  or  less  compensation  for  any 
service  rendered  in  transporting  passengers  or  prop- 
erty than  is  charged,  collected  or  received  by  the  car- 
rier from  any  other  person  or  persons  doing  for  him 
or  them  a  like  contemporaneous  service  in  the  trans- 
portation of  like  traffic  "under  substantially  the  same 
circumstances  and  conditions."  When  the  traffic  is  not 
of  like  kind,  or  when  the  service  is  not  l '  alike  and  con- 
temporaneous," or  when  the  transportation  is  not  ren- 
dered "under  substantially  the  same  circumstances  and 
conditions,"  differences  in  charges  do  not  constitute 
"unjust  discrimination." 

No  reason  occurs  to  me  in  the  nature  of  their  voca- 
tions, why  discrimination  should  be  made  in  favor  of 


204 

theatrical  parties.  It  seems  to  me  that  the  trans- 
portation of  your  party  of  ten  persons  is  a  like  service 
as  the  transportation  of  a  theatrical  party  of  the  same 
number.  While  the  right  of  the  carrier  to  sell  ' '  party 
rate"  tickets  is  recognized  and  such  sale  does  not  con- 
stitute an  unjust  discrimination,  such  tickets  must  be 
sold  to  all  who  apply  for  them,  or  the  carrier  will  be 
guilty  of  "unjust  discrimination."  It  is  the  duty  of 
the  carrier  to  serve  all  similarly  situated  upon  the 
same  terms  and  conditions.  If,  therefore,  the  carrier 
offers  a  "party  rate"  ticket  to  theatrical  parties  of 
ten  or  more,  I  am  of  the  opinion  that  that  rate  must 
be  offered  to  all  parties  of  ten  or  more. 

In  Larson  v.  Railway  Co.,  1  Int.  Comm.  Rep., 
147,  it  was  held  that  a  railroad  company  could  not 
restrict  the  sale  of  mileage  tickets  to  commercial  trav- 
elers. 

See  also  the  following  authorities : 

Interstate  Commerce  Com.  v.  B.  &  0.  Ry.  Co., 
43  Fed.,  37;  aff.,  145  U.  S.,  263. 

Foster  v.  Ry.  Co.,  56  Fed.,  434. 

Wholesale  Grocers  v.  Ry.  Co.,  1  Int.  C.  B.,  156. 

Smith  v.  R.  R.  Co.,  1  Int.  C.  E.,  208. 
If  the  carrier  exacts  a  rate  from  a  party  of  ten  in 
excess  of  the  "party  rate,"  the  excess  can  be  recovered 
back.    Such  a  payment  cannot  be  considered  as  a  vol- 
untary payment. 

Suffern  v.  Indiana,  etc.,  Ry.  Co.,  7  Int.  C.  C. 
Rep.,  255. 


AS    TO    THE    REASONABLENES    OF    THE    RULE    ALLOWING    48 
HOURS  TO  LOAD  WHERE  THE  CARS  ARE  OF  LARGE  CAPACITY. 

(Max  Levy  &  Co.,  July  22,  1903.) 

"We  beg  to  call  your  attention  to  the  following 
and  shall  be  pleased  to  have  you  refer  the  same 
to  the  General  Counsel  of  the  association  for  his 
opinion. 

Under  the  rules  of  the  different  railroad  com- 
panies, cars  loaded  or  unloaded  beyond  forty-eight 


205 

hours  are  charged  $1  per  day  or  fraction  thereof 
after  such  delay.  The  maximum  capacity  of  cars 
at  the  time  the  rule  was  first  made  by  the  rail- 
roads was  from  40,000  to  60,000  Ibs.  and  from  that 
up  to  120,000  Ibs.  It  seems  to  reason  that  it  takes 
longer  for  a  consignee  or  consignor  to  load  or  un- 
load a  car  holding  from  30  to  60  tons  than  it  does 
to  load  or  unload  one  from  20  to  30  tons,  and  as  all 
our  commodity  is  loaded  in  bulk,  and  we  usually 
load  to  the  maximum  capacity,  we  cannot  see  why 
we  should  not  have  longer  time  to  load  or  unload 
a  car  holding  in  some  cases  double  the  quantity. 
Since  the  railroads  increased  the  capacity  of  the 
cars,  and  in  most  cases  doubled  the  same,  we  think 
that  in  justice  to  the  shipper  it  should  increase  the 
time  for  loading  and  unloading,  in  proportion.  No 
doubt  a  great  many  members  of  the  association 
are  affected  by  this  rule,  as  well  as  we,  and  if  it  is 
within  your  province,  we  should  be  pleased  to  have 
the  matter  taken  up." 

The  matter  is  covered  by  my  opinions  of  April  12, 
1902,  to  Monmouth  Mining  &  Mfg.  Co.,  and  of  January 
30,  1902,  to  Foley  Mfg.  Co.  As  was  there  stated,  the 
question  can  only  be  determined  from  all  the  surround- 
ing facts  and  circumstances.  As  a  matter  of  law, 
forty-eight  hours  is  not  unreasonable.  If  the  rule 
allows  sufficient  time  to  unload  in  ordinary  cases,  with- 
out reference  to  any  rare  or  exceptional  circumstances 
incident  to  a  particular  shipper  at  some  particular 
time,  and  without  reference  to  an  unfavorable  condi- 
tion of  weather,  its  validity  will  probably  be  upheld 
by  the  courts.  Similar  rules  have  been  held  by  the 
courts  of  other  states  to  be  reasonable  as  to  time. 

The  fact  that  the  capacity  of  the  cars  has  been 
largely  increased  since  the  date  when  the  rule  was  put 
in  operation,  would  be  a  strong  circumstance  in  deter- 
mining the  reasonableness  of  the  rule. 


THE   EFFECT   OF  THE   ORDINANCE   OF   THE   CITY  OF  CHICAGO 
PROHIBITING   THE  FORESTALLING  OF   FUEL,  ETC. 

(Barnhart  Bros.  &  Spindler,  July  25,  1903.) 

"Will  you  kindly  ask  your  counsel,  Mr.  Mayer, 
his  interpretation  of  the  section  in  the  recent  ordi- 
nance adopted  by  the  city  council,  intended  to  re- 
strict the  coal  trust.  The  ordinance  is  so  loosely 
drawn  that  it  might  be  used  to  make  infinite  trouble 
to  any  man's  business,  since  it  makes  it  a  punish- 
able misdemeanor  to  say  or  to  do  anything  that 
would  prevent  merchandise  of  any  kind  coming 
into  the  city  of  Chicago.  We  enclose  herewith 
copy  of  the  section  of  the  ordinance  referred 
to." 
The  ordinance  is  as  follows : 

"Sec.  1.  That  any  person,  firm  or  corporation 
who  shall  dissuade  any  other  person,  firm  or  cor- 
poration from  bringing  any  coal,  wood  or  other 
fuel,  or  merchandise  into  the  City  of  Chicago,  or 
shall  practice  any  device,  or  combine  or  conspire 
with  another  or  others,  or  commit  any  act  with 
intent  to  enhance  the  price  of  any  coal,  wood,  or 
other  fuel  or  merchandise  whereby  any  consumer 
or  purchaser  for  domestic  use  in  the  City  of  Chi- 
cago purchasing  any  of  said  coal,  wood  or  other 
fuel  or  merchandise,  shall  be  compelled  to  pay  a 
greater  price  therefore  than  he  otherwise  would 
be  compelled  to  pay,  shall  be  deemed  and  found 
guilty  of  forestalling. 

Sec.  2.  Any  person,  firm  or  corporation  found 
guilty  of  forestalling  as  defined  in  Section  1  of  this 
ordinance,  shall  be  liable  to  a  fine  in  the  sum  not 
to  exceed  $200  for  each  offense,  to  be  recovered 
by  suit  by  the  City  of  Chicago  in  any  court  of  com- 
petent jurisdiction ;  and  it  shall  be  separate  offense 
for  each  and  every  lot  or  parcel  of  said  coal,  wood, 
or  other  fuel  or  merchandise  that  any  such  con- 
sumer or  purchaser  for  domestic  use  shall  be  com- 


207 

pelled  to  purchase  at  a  greater  price  than  he  other- 
wise would  be  compelled  to  pay. 

Sec.  3.  This  ordinance  shall  be  in  full  force 
and  effect  from  and  after  its  passage  and  due  pub- 
lication according  to  law." 

The  ordinance  applies  only  to  such  merchandise  as 
is  of  the  same  nature  as  "coal,  wood  or  other  fuel," 
and  does  not  apply  to  all  kinds  of  merchandise.  To 
constitute  the  offense  of  forestalling  under  the  ordi- 
nance, the  acts  prohibited  must  have  the  effect  of 
compelling  any  consumer  or  purchaser  of  coal,  wood 
or  other  fuel,  or  similar  substance  for  domestic  use  in 
the  City  of  Chicago,  to  pay  a  greater  price  therefore 
than  he  would  otherwise  be  compelled  to  pay. 


THE  KEDEMPTION  OF  COUPONS  OF  INTERCHANGEABLE  MILE- 
AGE  TICKETS. 

(Streator  Clay  Mfg.  Co.,  July  24,  1903.) 
"Bef erring  to  the  opinion  of  Mr.  Levy  Mayer, 
General  Counsel,  in  reference  to  railroad  compa- 
nies' obligation  to  redeem  coupons  when  the  user 
has  not  traveled  2,000  miles,  given  under  date  of 
May  26th,  1903,  beg  to  say,  that  we  do  not  under- 
stand the  opinion  covers  the  question. 

Railroad  companies  under  the  so-called  Western 
Passenger  Association  issue  interchangeable  mile- 
age books,  and  with  each  ticket  purchased  under 
the  contract,  issue  a  coupon  which  is  redeemable, 
providing  the  purchaser  travels  2,000  miles  with- 
in a  specified  time. 

The  question  we  want  to  raise  now  is,  whether 
or  not  the  railroad  company  is  liable  through  its 
so-called  passenger  bureau  to  redeem  these  cou- 
pons in  the  event  the  purchaser  has  not  traveled 
2,000  miles." 

Possibly  I  do  not  understand  the  facts.  I  infer 
that  the  full  rate  is  paid  when  the  ticket  is  purchased, 
and  that  the  redeemable  coupon  is  the  means  of  re- 


208 

ceiving  or  evidences  the  rebate.  If  my  understanding 
of  the  facts  be  correct,  then  the  matter  is  covered  by 
the  prior  opinion. 

The  railroad  companies  are  obligated  under  the  stat- 
ute (Kurd's  Rev.  Stat.  of  1901,  Sec.  16,  p.  1389)  to 
redeem  the  interchangeable  mileage  tickets  at  a  rate 
equal  to  the  difference  between  the  price  paid  for  the 
whole  ticket  and  the  cost  of  tickets  between  the  points 
for  which  proportion  of  said  ticket  was  actually  used. 


THE  LIABILITY  OF  AN  EMPLOYEE  UNDER  THE  CHILD  LABOR 
LAW  WHERE  A  CHILD  IS  INJURED  BY  MACHINERY  UPON 
WHICH  HE  IS  NOT  EMPLOYED. 

(Illinois  Malleable  Iron  Co.,  July  27,  1903.) 

1 1  Concerning  the  new  law  regarding  child  labor ; 
while  we  are  in  sympathy  with  the  law,  and  did 
not  ask  any  one  to  vote  against  it,  yet  we  would 
like  some  information  as  to  the  best  way  of  pro- 
tecting ourselves  from  legal  complications  grow- 
ing out  of  infringements  of  the  law  by  children  in 
our  employ,  who  do  so  contrary  to  our  instruc- 
tions. 

For  instance,  we  notice  that  they  must  not  put 
on  or  off  belts,  and  while  we  shall  have  the  super- 
intendent and  respective  foremen  instructed 
on  this  matter,  yet  we  fear  they  will  do  this,  be- 
cause we  know  it  is  boy-like  to  want  to  do  this 
on  any  machine  they  run. 

If  a  minor  does  work  contrary  to  instructions, 
and  an  accident  should  result  from  it,  would  we 
be  legally  liable1? 

Also,  our  wire  straightener  is  a  very  small  af- 
fair for  straightening  No.  16  wire,  and  it  is  con- 
sidered one  of  the  easiest  jobs ;  and  while  we 
shall  immediately  instruct  that  no  child  under  16 
years  shall  be  employed  at  it,  yet  there  is  a  chance 
of  others  than  the  one  employed  on  the  machine 
occasionally  getting  at  it.  Never,  so  far  as  the 
writer  knows,  has  there  been  an  accident  on  the 


209 

machine,  but  should  an  accident  occur  to  a  child 
that  has  no  business  running  it,  would  we  be 
liable? 

We  remember  one  case  where  we  were  sued  be- 
cause of  a  boy  getting  hurt  in  our  shop,  and  the 
injury  occurred  through  his  going  to  a  machine 
not  his  own,  ond  running  it  without  permission. 
Of  course  he  swore  that  he  was  hurt  on  his  own 
machine,  and  his  lawyer  foolishly  offered  to  take 
the  jury  to  the  factory  and  show  them  the  ma- 
chine he  was  hurt  on.      The  writer  had  our  at- 
torney accept  the  challenge,  and  the  jury  found 
it  impossible  for  him  to  have  been  hurt  on  the 
machine  he  was  working  on.    Hence  in  that  case 
we  won,  but  if  it  had  been  a  prosecution  by  the 
State  because  of  a  boy  working  on  a  machine  that 
the  law  said  he  should  not  work,  and  he  had  done 
so  without  orders,  would  we  have  been  liable?" 
To  constitute  a  violation  of  Section  11  of  the  Child 
Labor  Law,  the  child  must  be  ''employed"  upon  the 
machine  which  he  is  forbidden  to  operate  or  assist  in 
operating.  If  he  goes  outside  the  scope  of  his  employ- 
ment  or  disobeys  the  instructions   of  his   employer, 
and  meddles  with  a  dangerous  machine,  the  employer, 
in  my  opinion,  will  not  be  liable  to  the  penalties  im- 
posed by  the  Child  Labor,  Law. 

Whether  the  employer  is  liable  in  damages  to  the 
child  for  an  injury  caused  by  such  machinery  is  a 
different  question. 

If  the  law  in  reference  to  the  employment  of  chil- 
dren is  violated,  such  violation  is  not  of  itself  suffi- 
cient to  entitle  the  person  injured  to  recover. 

The  violation  of  the  law  is,  however,  at  least  prima 
facie  evidence  of  negligence  where  such  violation  is 
the  natural  and  proximate  cause  of  the  injury.  If 
the  child  is  injured  when  not  "employed"  on  the  ma- 
chine which  causes  the  injury,  no  liability  is  imposed 
under  the  Child  Labor  Law.  The  liability  in  such  a 
case  must  depend  upon  the  general  principles  of  the 
law  relating  to  negligence.  The  liability  of  the  em- 
ployer for  negligence  depends  upon  the  facts  and 


210 

circumstances  of  each  case.  It  is  in  most  cases  a 
question  of  fact  for  the  jury.  The  law  imposes  a 
duty  to  properly  safeguard  dangerous  appliances  so 
as  to  avoid  injury.  If  an  injury  occurs  through  a 
breach  of  this  duty,  the  employer  must  be  held  liable. 
Many  other  considerations  might  affect  the  ques- 
tions of  liability,  but,  as  I  have  said,  the  questions 
most  depend  upon  the  facts  and  circumstances  in  each 
case. 

If,  however,  a  violation  of  the  Child  Labor  Law  is 
not  the  proximate  and  natural  cause  of  the  injury, 
that  law  has  no  bearing  upon  the  question  of  liability. 


WHETHER  THE  ILLINOIS  CHILD  LABOE  LAW  OF  1903  PRO- 
HIBITS THE  EMPLOYMENT  OF  MINORS  ON  ALL  STEAM 
MACHINERY  OR  ONLY  "  STEAM  GENERATING  MA- 
CHINERY. ' ' 

(American  Can  Co.,  July  24,  1903.) 

"Again  referring  to  the  child  labor  law  which 
took  effect  July  1st,  in  this  state,  the  question 
has  arisen  in  regard  to  the  paragraph  in  Section 
11,  regarding  the  employment  of  child  labor  on 
machinery,  as  to  what  the  interpretation  of  the 
clause  which  reads:  ' steam  boilers,  steam  ma- 
chinery, or  other  steam-generating  apparatus/ 
means. 

The  chief  factory  inspector  has  notified  our  su- 
perintendent that  this  means  that  children  should 
not  run  any  kind  of  machinery  which  is  driven 
by  steam  power.  The  opinion  of  the  writer  in 
reading  the  law  would  be,  that  this  would  mean 
that  children  should  not  be  employed  in  operating 
steam  boilers  or  steam  engines,  and  that  it  does 
not  refer  to  belt-driven  machinery. 

We  would  respectfully  ask  for  an  opinion  of 
the  attorney  of  your  association  on  this  question, 
at  your  earliest  convenience." 
Section  11  of  the  Child  Labor  Law  provides: 

11  EMPLOYMENT     FORBIDDEN     CHILDREN     UNDER 


211 

SIXTEEN  YEARS  OF  AGE.  No  child  under  the  age 
of  sixteen  shall  be  employed  at  sewing  belts,  or 
to  assist  in  sewing  belts,  in  any  capacity  what- 
ever; nor  shall  any  child  adjust  any  belt  to  any 
machinery;  they  shall  not  oil  or  assist  in  oiling, 
wiping,  or  cleaning  machinery;  they  shall  not 
operate  or  assist  in  operating  circular  or  band 
saws,  wood-shapers,  wool-jointers,  planers,  sand- 
paper or  wood-polishing,  emery  or  polishing 
wheels  used  for  polishing  metal,  wood-turning  .or 
boring  machinery,  stamping  machines  in  sheet 
metal  and  tinware  manufacturing,  stamping  ma- 
chines in  washer  and  nut  factories,  operating  cor- 
rugating rolls,  such  as  are  used  in  roofing  fac- 
tories, nor  shall  they  be  employed  in  operating 
any  passenger  or  freight  elevator,  steam  boiler, 
steam  machinery  or  other  steam  generating  ap- 
paratus, or  as  pin  boys  in  bowling  alleys;  they 
shall  not  operate  or  assist  in  operating  dough 
brakes,  or  cracker  machinery  of  any  description; 
wire  or  iron  straightening  machinery;  nor  shall 
they  operate  or  assist  in  operating  rolling  ma- 
chinery, punches  or  shears,  washing,  grinding  or 
mixing  mills  or  calendar  rolls  in  rubber  manufac- 
turing, nor  shall  they  operate  or  assist  in  op- 
erating laundry  machinery;  nor  shall  children  be 
employed  in  any  capacity  in  preparing  any  com- 
position in  which  dangerous  or  poisonous  acids 
are  used,  and  they  shall  not  be  employed  in  any 
capacity  in  the  manufacture  of  paints,  colors  or 
white  lead;  nor  shall  they  be  employed  in  any 
capacity  whatever  in  operating  or  assisting  to 
operate  any  passenger  or  freight  elevator;  nor 
shall  they  be  employed  in  any  capacity  whatever 
in  the  manufacture  of  goods  for  immoral  pur- 
poses, or  any  other  employment  that  may  be  con- 
sidered dangerous  to  their  lives  or  limbs,  or  where 
their  health  may  be  injured  or  morals  depraved; 
nor  in  any  theatre,  concert  hall,  or  place  of  amuse- 
ment wherein  intoxicating  liquors  are  sold;  nor 
shall  females  under  sixteen  years  of  age  be  em- 


212 

ployed  in  any  capacity  where  such  employment 
compels  them  to  remain  standing  constantly. ' ' 
(Sess.  Laws  of  Illinois,  1903,  pp.  156-160.) 
I  do  not  pass  upon  whether  the  machinery  in  ques- 
tion comes  within  the  meaning  of  Section  11,  except 
in  so  far  as  it  may  be  covered  by  that  clause  which 
reads : 

"Nor  shall  they  be  employed  in  operating  any 
passenger  or  freight  elevator,  steam  boiler,  steam 
machinery,  or  oilier  steam-generating  apparatus." 
If  the  words  "steam  machinery"  be  so  construed 
as  to  include  all  kinds  of  machinery  driven  or  operated 
by  steam,  it  would  include  every  species  of  machinery. 
The  legislature  has,  however,  in  Section  11  of  the  law, 
described  in  detail  what  classes  and  kinds  of  ma- 
chinery are  within  the  law.  If  by  the  words  "steam 
machinery"  the  legislature  intended  to  include  all  ma- 
chinery operated  by  steam,  it  would  not  be  necessary 
to  set  out  in  detail  the  kinds  of  machinery  that  would 
come  within  the  description  of  the  words  "steam  ma- 
chinery." This  is  indicative  of  the  legislative  intent. 
Further  light  is  thrown  upon  that  intent  by  the  words 
"or  other  steam-generating  apparatus."  This  clearly 
shows  that  the  words  "steam  machinery"  mean  steam- 
generating  machinery. 

I  am  therefore  of  the  opinion  that  the  construction 
placed  upon  the  laws  by  the  Chief  Factory  Inspector 
is  erroneous. 


THE  FOREIGN  CORPORATION  LAW  OF  TEXAS  AND  WHETHER 
THE  CARRYING  OF  A  STOCK  OF  GOODS  IN  TEXAS  IS  ' '  DOING 
BUSINESS"  THEREIN. 

(Illinois  Manufacturers'  Association,  July  27,  1903.) 
"We  are  planning  to  carry  a  stock  of  goods  at 
Dallas,  Texas,  for  shipments  from  that  point  to 
our  Texas  trade,  all  orders  to  be  sent  to  us  here 
at  our  Chicago  office  and  to  be  subject  to  our  ap- 
proval here,  after  which  shipments  will  be  made 
from  Dallas. 


213 

Will  you  kindly  advise  us  if  this  constitutes 
1  doing  business  in  Texas'  in  the  sense  in  which 
the  term  is  used  in  the  Texas  Statutes'? 

We  have  seen  a  number  of  answers  sent  out 
by  your  association  to  questions  somewhat  similar 
to  this,  but  we  believe  we  have  not  seen  an  answer 
that  covered  just  these  conditions." 
I  am  of  the  opinion,  under  the  facts  stated,  the  com- 
pany cannot  carry  on  the  contemplated  business  in 
Texas  without  a  compliance  with  the  laws  of  that  state 
governing  foreign  corporations. 

Southern  Cotton  Oil  Co.  v.  Wemple,  44  Fed., 

24. 
People  v.  Mining  Co.,  105  N.  Y.,  76. 


THE  FOREIGN  CORPORATION  LAW  OF  TEXAS  AND  WHAT  CON- 
STITUTES "DOING  BUSINESS"  THEREIN. 

(Kellogg  Switch  Board  &  Supply  Co.,  Sept.  1,  1903.) 
"We  are  in  receipt  of  'Opinion  of  Levy  Mayer, 
General  Counsel,  in  reference  to  the  foreign  cor- 
poration law  of  Texas.'      We  would  like  to  be 
advised  as  to  the  exact  meaning  of  'foreign  cor- 
porations doing  business  in  Texas.'    We  do  busi- 
ness in  that  state  through  traveling  men  and  cor- 
respondence and  wish  to  know  if  we  are  liable  to 
taxation,  under  the  circumstances." 
What  constitutes  "doing  business"  depends  upon 
the   circumstances   of   such   particular   case.     If   the 
Kellogg    Company    does    business    in    Texas    solely 
through  the  mails  or  through  the  medium  of  traveling 
salesmen,  who  take  orders  subject  to  the  approval  of 
the  home  office,  I  am  of  the  opinion  that  the  company 
is  not  doing  business  in  Texas  and  need  not  comply 
with  the  foreign  corporation  laws. 


214 

AS  TO  WHO  SUSTAINS  THE  LOSS  ON  GOODS  LOST  OR  DAMAGED 
IN  TRANSIT,  WHERE  THE  CONSIGNOR  PAYS  OR  ALLOWS  THE 
FREIGHT  AND  WHERE  THE  GOODS  ARE  SOLD  ' i  F.  O.  B.  POINT 
OF  SHIPMENT." 

(Hibbard,  Spencer,  Bartlett  &  Co.,  July  28,  1903.) 

"Will  you  kindly  secure  from  the  legal  repre- 
sentative of  the  association  an  opinion  respecting 
the  effect  of  the  use  of  freight  allowance  phrases 
in  making  quotations  as,  for  instance, 

'We  quote  nails  to  you  at  $2.50  rates,  freight 
allowed  to  your  town. 

We  quote  nails  to  you  at  $2.50  rates,  freight 
prepaid  to  your  town. 

We  quote  nails  to  you  at  $2.50  rates,  F.  0.  B. 
Chicago,  freight  allowed  to  your  town.' 

In  the  event  of  damage  to  the  goods  in  transit, 
upon  whom  does  the  loss  fall  in  each  case,  as- 
suming the  carrier  is  not  liable?  Does  it  fall  on 
the  buyer  or  upon  the  seller? 

As  regards  safe  delivery  at  destination,  what 

responsibility,  if  any,  does  the  seller  assume  by 

prepaying  freight  to  stations  where  there  is  no 

railroad  agent  or  where  it  is  prepaid  by  him  upon 

request  and  at  the  expense  of  the  buyer!" 

The  phrases  used  in  making  freight  allowance  above 

quoted,  are  all  of  the  same  legal  effect,  and  in  absence 

of  other  qualifying  circumstances,  the  carrier  would 

be  the  agent  of  the  consignor.    A  loss  in  such  a  case 

would  fall  upon  the  consignor. 

The  responsibility  of  the  consignor  would  continue 
for  the  same  time  as  the  responsibility  of  the  carrier 
to  the  consignee  would  continue — that  is,  until  there 
is  an  actual  or  a  constructive  delivery.  What  con- 
stitutes such  a  delivery  depends  on  the  facts  in  each 
case.  As  already  indicated,  if  the  freight  is  prepaid 
by  the  consignor  expressly  at  the  request  and  on  behalf 
of  and  as  an  agent  of  the  consignee,  and  in  case  of  loss 
the  loss  would  be  upon  the  consignee. 

NOTE: — See  the  later  opinion  upon  this  same  subject,  dated  Octo- 
ber 24,  1903,  in  answer  to  the  query  of  American  Steel  &  Wire  Co. — Ed. 


215 


LIABILITY    OF    A    CARRIER    FOR    GOODS    DESTROYED    BY    MOB. 
ALSO  LIABILITY   FOR   DELAY   CAUSED   BY    MOBS. 

(Latrobe  Steel  &  Coupler  Company,  July  22,  1903.) 
"During  the  coal  riots  of  last  winter  there  were 
a  number  of  cases  where  coal  consigned  to  us  was 
stolen  from  cars  in  transit.  The  railway  com- 
panies, while  not  disputing  the  actual  shortages 
in  cars  when  they  reached  destination,  simply  dis- 
claim liability,  under  the  old  common  law  of  not 
being  responsible  for  the  act  of  God  or  the  king's 
enemies. 

The  railway  companies  contend  that  a  condition 
of  riot  and  disorder  existed  which  absolved  com- 
mon carriers  from  liability,  and  on  this  basis  have 
declined  to  honor  our  claims. 

We  would  very  much  like  to  have,  if  possible, 
the  opinion  of  Mr.  Mayer  as  to  whether  the  rail- 
way companies'  defense  is  good  law.  It  is  not 
our  desire  to  get  into  any  legal  controversy  over 
the  matter,  as  the  amount  involved  is  too  small. 
At  the  same  time,  we  would  like  to  know  whether 
common  carriers  can  be  held  for  shortages  of  this 
kind  under  the  conditions  which  existed  during 
the  latter  part  of  last  winter." 

The  carrier  is  liable  as  an  insurer  for  all  loss  or 
damage  to  goods  in  transit  not  caused  by  the  act  of 
God  or  the  public  enemy.  "Public  enemy"  means 
those  with  whom  the  nation  is  at  war  and  does  not 
include  thieves,  robbers,  rioters  or  mob.  The  carrier 
is  liable,  therefore,  for  any  destruction  of  property 
caused  by  the  violence  of  a  mob.  A  mob  is  not  con- 
sidered as  a  public  enemy. 

Schouler  Bailments  &  Carriers  (2nd  Ed.),  p. 

429. 
Hutchinson  on  Carriers   (2nd  Ed.),  pp.  226, 

227. 

Railway  Co.  v.  Nevill,  60  Ark.,  375. 
Railway  Co.  v.  Holloivell,  65  Ind.,  188. 
5  Ency.  of  Law  (2nd  Ed.),  pp.  235,  236. 


216 

If,  however,  a  delay  is  caused  by  the  action  of  a 
mob,  this  will  excuse  the  delay.  The  liability  of  a 
carrier  for  delay  because  of  strikes,  riots  or  mobs  is 
not  as  strict  as  its  liability  for  loss  or  damage  from 
the  same  cause. 

Railway  Co.  v.  Hazen,  84  111.,  36. 
Geismer  v.  R.  R.  Co.,  102  N.  Y.,  563. 


AS    TO    WHETHER    THE    PREPAYMENT    OF    FREIGHT    BY    THE 
CONSIGNOR  THROWS  THE  RISKS  OF  TRANSIT  UPON  HIM. 

(Hibbard,  Spencer,  Bartlett  &  Co.,  July  27,  1903.) 

11  We  would  like  what  we  know  to  be  a  reliable 
opinion  on  the  following  legal  point:  We  fre- 
quently ship  a  carload  of  goods  to  a  certain  point, 
charge  the  customer  a  given  price  and  prepay 
the  freight.  The  question  is,  whether  by  the  pre- 
payment of  the  freight  we  virtually  deliver  the 
goods  at  the  point  of  destination,  or  whether  the 
possession  of  the  goods  is  with  the  consignee  as 
soon  as  we  hold  the  transportation  company's  re- 
ceipt for  the  goods,  the  same  as  though  we  had 
not  paid  the  freight. 

Secondly,  does  this  prepayment  of  the  freight 
or  an  agreement  on  our  part  to  pay  the  freight  to 
the  point  of  destination  place  the  responsibility 
of  the  loss  in  the  shipment  with  the  consignor  in 
the  same  way  as  if  the  goods  had  been  shipped 
F.  0.  B.  at  the  point  of  destination?" 
The  matter  is  fully  covered  by  my  opinion  of  June 
18th,  1903,  in  answer  to  the  query  of  Selz,  Schwab  & 
Co.     (See  pp.  4-7  of  that  opinion.)     In  the  absence 
of  other  qualifying  circumstances,  or  an  agreement 
by  the  company,  the  prepayment  of  freight  by  the  con- 
signor is  of  the  same  effect  as  a  shipment  F.  0.  B. 
destination,  and  the  carrier  is  the  agent  of  the  con- 
signor.    In  such  a  case,  if  there  is  a  loss  for  which 
the  carrier  is  not  liable,  the  consignor  must  stand  the 
loss.    If  by  agreement  the  consignor  pays  the  freight, 
as  the  agent  of  the  consignee,  the  loss  will  fall  upon 


217 

the  latter.  The  title  may  also  pass  to  the  company,  as 
I  stated  in  the  opinion  referred  to,  while  the  goods  are 
in  transit  by  the  delivery  of  the  bill  of  lading. 

See  authorities  cited  in  my  former  opinions,  and  also 
Schouler's  Bailments  &  Carriers  (2nd  Ed.), 

Sees.  565-568. 

Tiedeman  on  Sales  (1st  Ed.),  Sec.  85,  95. 
Tiffany  on  Sales  (1st  Ed.),  pp.  99-100. 
Hutchinson  on  Carriers  (2nd  Ed.),  Sec.  720 
et  seq. 


AS  TO  WHETHER  MANUFACTURERS  ARE  COMPELLED  TO  PAY 
A  FAQTORY  LICENSE  FEE  OF  $1.00  TO  THE  CITY  OF 
CHICAGO. 

(C.  F.  Baum  Company,  July  28,  1903.) 
"Some  of  our  friends  in  the  manufacturing 
business  are  obliged  to  take  out  factory  licenses 
from  the  City  on  which  the  charge  is  $1.00  and 
we  wish  to  inquire  if  it  is  necessary  for  us  to 
have  this.  As  yet  there  has  been  no  factory  in- 
spector at  our  place,  neither  have  we  read  of 
such  a  law  or  been  informed  by  you  to  this  ef- 
fect." 

I  am  not  advised  of  the  nature  of  the  business  of 
the  various  concerns  who  are  obliged  to  take  out 
licenses. 

There  is  an  ordinance  which  provides: 

"Any  house,  room  or  other  place  in  which  the 
process  of  making,  altering,  repairing  or  finishing 
any  so-called  ready-made  coats,  vests,  trousers, 
overcoats,  or  any  other  sort  or  description  of  wear- 
ing apparel  intended  for  sale,  shall  be  carried  on, 
shall  be  deemed  a  workshop,  and  shall  be  governed 
by  all  ordinances  now  in  force,  or  which  may  here- 
after be  passed,  relating  to  workshops." 

See  Sec,  1088  Eev.  Code  of  Chicago  of  1897. 
Section  1091  of  the  Code  provides  for  a  payment 
of  an  annual  license  fee  of  One  Dollar  ($1.00)  for  any 
such  workshop. 


218 

I  am  not  sufficiently  advised  as  to  the  nature  of  the 
business  carried  on  by  the  C.  F.  Baum  Company  to 
say  whether  it  is  embraced  within  the  language  above 
quoted. 


THAT  A  CARRIES  MUST  DELIVER  CARS  UPON  PRIVATE  SIDE 
TRACKS  CONNECTED  WITH  ITS  OWN  LINE,  AND  THAT  A 
CARRIER  CANNOT  REFUSE  TO  SWITCH  SUCH  CARS  ON  PRI- 
VATE SIDE  TRACKS  BECAUSE  OF  UNPAID  DEMURRAGE 
CHARGES  ON  OTHER  CARS. 

(Skandia  Furniture  Company,  July  29,  1903.) 

' '  It  has  come  to  our  notice  that  the  four  railways 
entering  Eockford  have  through  Mr.  Elliott,  man- 
ager of  the  Illinois  Car  Service  Association,  agreed 
to  stop  switching  car-lot  business,  that  is,  they  will 
not  deliver  any  car  business  to  the  factory  or 
switch  track  adjoining  factory,  unless  said  factory 
pays  all  accrued  demurrage  and  will  agree  to  pay 
future  demurrage  without  protest. 

The  Car  Service  Association  admit  that  they 
cannot  legally  collect  demurrage,  but  will  take  the 
position  that  they  have  the  right  to  refuse  the 
switching  of  cars,  that  the  team  track  is  the  ter- 
minal and  that  the  placing  of  cars  on  the  team 
track  ends  their  contract  and  that  merchandise 
must  be  carted  from  the  car. 

Please  obtain  a  ruling  from  Mr.  Mayer  on  this 
point,  if  the  switching  of  cars  is  merely  an  accom- 
modation and  if  the  railway  companies  have  the 
right  to  refuse  this  service,  and  if  any  arbitrary 
rule  can  be  put  in  force  by  them  and  they  use  this 
means  to  gain  their  end." 

If  the  carrier  makes  an  express  contract  to  deliver 
to  the  consignee  personally  or  to  a  particular  ware- 
house or  factory  it  is  bound  by  such  a  contract  and 
must  make  the  delivery  in  accordance  with  the  con- 
tract. 

Cahn  v.  M.  C.  R.  R.  Co.,  71  111.,  96. 
At  common  law  it  was  the  duty  of  a  carrier  to  make 


219 

a  personal  delivery  to  the  consignee,  but  this  rule  has 
been  relaxed  in  regard  to  railways  from  necessity.  The 
liability  of  the  carrier  is  in  most  cases  discharged  by  a 
delivery  at  the  warehouse,  depot  or  team  track  pro- 
vided by  the  carrier  for  the  storage  of  the  goods. 
This  rule  is  based  upon  the  ground  that  a  railway  has 
no  means  of  delivery  beyond  its  own  lines.  If  the  car- 
rier is  able  to  make  a  delivery  to  the  consignee  by 
means  of  a  spur  or  switch-track,  the  necessity  of  the 
relaxation  of  the  rule  requiring  personal  delivery  no 
longer  exists  and  in  my  opinion  the  carrier  is  bound  to 
make  a  personal  delivery. 

Vincent  v.  C.  &  A.  Rd.  Co.,  49  111.,  33. 

5  Ency.  of  Law  (2nd  Ed.),  p.  216. 

Coe  v.  R.  R.  Co.,  3  Fed.  Eep.,  775. 
The  carrier  cannot,  however,  be  compelled  to  deliver 
freight  beyond  its  own  termini.  The  place  of  business 
of  the  consignee  must  be  upon  the  line  of  the  railroad 
company. 

Where  a  side  track  is  erected  and  owned  by  the  com- 
pany or  the  consignee  it  is  considered  part  of  the  line 
of  the  railroad  and  the  company  is  obligated  to  make  a 
personal  delivery  to  the  consignee.  But  where  the 
railroad  company  can  only  use  the  side  track  by  per- 
mission of  one  other  than  the  consignee,  it  need  not 
make  a  personal  delivery  as  such  side  track  is  not  a 
part  of  its  line.  To  constitute  the  side  track  part  of 
the  line  the  railroad  company  must  have  the  right  to 
use  it,  and  it  cannot  be  compelled  to  obtain  the  right, 
nor  is  it  material  that  the  railroad  company  has  de- 
livered freight  over  such  side  tracks  by  virtue  of  spe- 
cial agreements. 

People  v.  C.  &  A.  Rd.  Co.,  55  111.,  95. 

Vincent  v.  C.  &  A.  Rd.  Co.,  49  111.,  33. 

Railway  Co.  v.  People,  56  111.,  365. 

Hoyt  v.  C.  B.  &  Q.  Rd.  Co.,  93  111.,  601. 

C.  &  A.  Rd.  Co.,  v.  Suffern,  129  111.,  274. 

R.  R.  Co.  v.  Elevator  Co.,  153  111.,  70. 
The  liability  of  the  carrier  to  make  a  personal  deliv- 
ery may  also  be  established  by  usage  or  custom.  Where 
the  goods  are  of  such  a  nature  that  the  carrier  is  not 


220 

required,  in  the  usual  course  of  business,  to  remove  the 
freight  from  the  car,  as  in  the  case  of  grain  in  bulk, 
coal,  lumber  and  the  like,  the  carrier  discharges  his 
duty  by  delivering  the  car  in  a  safe  and  convenient 
position  for  unloading  at  the  elevator,  warehouse  or 
other  place  designated  in  the  contract  or  required  in 
the  usual  course  of  business,  or,  if  no  place  of  busi- 
ness is  thus  designated  or  required,  on  its  side  track 
or  team  track,  in  the  usual  and  customary  place  for 
unloading  by  consignees. 

Gr.egg  v.  Illinois  Cen.  R.  R.,  147  111.,  550. 

If,  therefore,  it  has  been  the  well  established  and 
generally  well  known  custom  and  the  usual  course  of 
business  for  the  carrier  to  make  a  personal  delivery 
to  the  consignee  where  such  consignee  can  be  reached 
over  the  line  of  the  railroad,  such  custom  forms  a  part 
of  the  contract  of  carriage  and  the  railroad  company 
is  obligated  to  make  a  personal  delivery.  But  to  have 
that  effect  the  custom  must  be  so  uniformly  acquiesced 
in  by  length  of  time  that  it  must  be  considered  to  have 
entered  the  minds  of  the  parties  and  constituted  a  part 
of  the  contract. 

Calm  v.  M.  C.  R.  R.  Co.,  71  111.,  96. 

It  is  the  duty  of  a  carrier  to  serve  all  its  patrons 
who  are  similarly  situated,  alike  and  without  unjust 
discrimination.  If,  then,  it  makes  a  personal  delivery 
to  one  consignee  and  denies  it  to  another  similarly 
situated  it  is  guilty  of  unjust  discrimination. 

The  carrier  cannot  impose  the  condition  upon  the 
performance  of  its  legal  duty,  that  the  customer  pay 
illegal  charges  not  connected  with  the  service  in  ques- 
tion, where  it  performs  the  duty  to  those  who  agree  to 
pay  the  illegal  charges.  It,  therefore,  cannot  insist  that 
the  consignee  pay  theretofore  accrued  demurrage 
charges  on  other  shipments  as  a  condition  to  the  mak- 
ing of  a  personal  delivery. 

NOTE: — See  opinion  of  April  20,  1907,  for  the  Block-Pollack  Iron 
Company  as  to  the  right  of  a  railroad  to  refuse  to  switch  shipments 
to  private  tracks  on  account  of  unpaid  demurrage  charges  on  other 
shipments,  as  provided  by  its  car-service  or  demurrage  rules. — Ed. 


221 


LIABILITY   OF   A  FIRM   ON   ORDERS   TAKEN   BY   ITS   SALESMEN 
WHO   ARE   WORKING   ON   A   COMMISSION    BASIS. 

(Francis  Beidler,  July  31,  1903.) 
' '  I  notice  your  various  opinions  sent  the  last  few 
days,  one  of  which  my  special  attention  is  called  to 
and  that  is  the  obligation  of  salesmen's  contracts. 
I  would  like  to  have  the  information  in  addition 
to  that  as  to  what  obligations  on  such  contracts 
are  where  made  by  a  salesman  doing  business  for 
the  house  alone,  but  selling  on  commission,  and 
whose  orders  are  ordinarily  recognized." 
The  liability  of  the  house  on  orders  taken  by  sales- 
men who  work  on  a  commission  basis  is  no  different 
from  the  liability  on  orders  taken  by  a  traveling  sales- 
man who  works  for  the  house  alone.    If  such  orders 
are  taken  subject  to  the  approval  of  the  house,  the 
contract  is  complete  when  it  is  accepted  by  the  house. 
What  constitutes  an  acceptance  has  already  been  re- 
ferred to  in  my  prior  opinions. 

If  a  salesman  takes  an  order  without  submitting  it 
to  the  house,  the  house  is  bound  by  such  order  when  it 
is  within  the  apparent  scope  of  the  salesman's  author- 
ity. If  he  has  actual  authority  to  make  contracts  the 
contract  is,  of  course,  binding.  If  similar  orders  previ- 
ously taken  have  been  recognized  by  the  house,  this 
is  a  recognition  of  such  agent's  authority  which  will 
estop  the  house  to  subsequently  dispute  it.  But,  as  I 
have  stated,  the  house  is  bound  by  all  contracts  made 
by  the  salesman  within  the  apparent  scope  of  his  au- 
thority even  though  as  a  matter  of  fact  he  has  not 
actual  authority. 


222 


THAT  THE  ILLINOIS  LAW  REQUIRING  AN  EMPLOYER  TO  STATE 
THAT  THERE  IS  A  STRIKE  AT  HIS  PLANT  WHEN  ADVERTIS- 
ING FOR  MEN  TO  TAKE  THE  PLACE  OF  STRIKERS  IS  UNCON- 
STITUTIONAL. 

(Illinois  Manufacturers'  Assn.,  August  5,  1903.) 

'  *  We  should  like  to  know  whether  in  the  opinion 
of  the  attorney  of  the  association  the  act  which 
makes  it  obligatory  on  the  manufacturer  to  adver- 
tise the  fact  that  there  is  a  strike  in  his  works 
when  he  has  advertised  for  men  to  take  the  place 
of  strikers,  is  not  unconstitutional. 

It  seems  to  us  that  there  is  no  value  whatever  in 
advertising  for  men  if  we  are  obliged  to  insert  the 
fact  that  they  are  to  take  the  place  of  strikers,  for 
the  reason  that  it  is  simply  impossible  to  discuss 
the  merits  of  the  case  in  such  advertisement,  and 
no  matter  how  much  justice  there  may  be  on  our 
side,  the  mere  fact  of  having  to  state  there  is  a 
strike  would  intimidate  workmen  from  coming. 

If  this  law  is  unconstitutional,  would  it  not  be  a 
good  thing  for  the  association  to  make  a  test  case, 
as  this  is  a  matter  which  interests  every  member 
of  the  association  to  a  very  great  degree. ' ' 
The  statute  in  question  is  as  follows : 

"That  it  shall  be  unlawful  for  any  person,  per- 
sons, company,  corporation,  society,  association  or 
organization  of  any  kind  doing  business  in  this 
state,  by  himself,  themselves,  his, its  or  their  agents 
or  attorneys,  to  induce,  influence,  persuade  or  en- 
gage workmen  to  change  from  one  place  to  another 
in  this  state,  or  to  bring  workmen  or  any  class  or 
calling  into  this  state  to  work  in  any  of  the  depart- 
ments of  labor  in  this  state,  through  or  by  means 
of  false  or  deceptive  representations,  false  adver- 
tising or  false  pretenses,  concerning  the  kind  and 
character  of  the  work  to  be  done  or  amount  and 
character  of  the  compensation  to  be  paid  for  such 
work,  or  the  sanitary  or  other  conditions  of  the 
employment,  or  as  to  the  existence  or  non-existence 


223 

of  a  strike  or  other  troubles  pending  between  em- 
ployer and  employes,  at  the  time  of  or  prior  to 
such  engagement.  Failure  to  state  in  any  adver- 
tisement, proposal  or  contract  for  the  employment 
of  workmen  that  there  is  a  strike,  lockout,  or  other 
labor  troubles  at  the  place  of  the  proposed  employ- 
ment, when  in  fact  such  strike,  lockout  or  other 
labor  trouble  then  actually  exists  at  such  place, 
shall  be  deemed  as  false  advertisement  and  mis- 
representation for  the  purpose  of  this  act. 

Sec.  2.  Any  person,  or  persons,  company,  cor- 
poration, society,  association  or  organization  of 
any  kind  doing  business  in  this  state,  as  well  as 
his,  their  or  its  agents,  attorneys,  servants  or  asso- 
ciates found  guilty  of  violating  section  1  of  this 
act,  or  any  part  thereof,  shall  be  fined  not  exceed- 
ing $2,000  or  confined  in  the  County  Jail  not  ex- 
ceeding one  year,  or  both,  where  the  defendant  or 
defendants  is  or  are  a  natural  person  or  persons. 

Sec.  3.  Any  person  or  persons  who  shall  in 
this  or  another  state,  hire,  aid,  abet,  or  assist  in 
hiring,  through  agencies  or  otherwise,  persons  to 
guard  with  arms  or  deadly  weapons  of  any  kind 
other  persons  or  property  in  this  state,  or  any  per- 
son or  persons  who  shall  come  into  this  state 
armed  with  deadly  weapons  of  any  kind  for  any 
such  purpose,  without  a  permit  in  writing  from  the 
Governor  of  this  state,  shall  be  guilty  of  felony, 
and  on  conviction  thereof  shall  be  imprisoned  in 
the  Penitentiary  not  less  than  one  year  nor  more 
than  five  years.  Provided,  that  nothing  contained 
in  this  act  shall  be  construed  to  interfere  with  the 
right  of  any  person,  persons  or  company,  corpora- 
tion, society,  association  or  organization  in  guard- 
ing or  protecting  their  private  property  or  private 
interests  as  is  now  provided  by  law;  but  this  act 
shall  be  construed  only  to  apply  to  cases  where 
workmen  are  brought  into  this  state  or  induced  to 
go  from  one  place  to  another  in  this  state,  by 
false  pretenses,  false  advertisement  or  deceptive 
representations,  or  brought  into  this  state  under 


224 

i 

arms,  or  removed  from  one  place  to  another  in 
this  state  under  arms. 

Sec.  4.  Any  workman  of  this  state,  or  any  work- 
man of  another  state,  who  has,  or  shall  be  influ- 
enced, induced  or  persuaded  to  engage  with  any 
persons  mentioned  in  section  1,  of  this  act,  through 
or  by  means  of  any  of  the  things  therein  pro- 
hibited, each  of  such  workmen  shall  have  a  right 
of  action  for  recovery  of  all  damages  that  each 
such  workman  has  sustained  in  consequence  of 
the  false  or  deceptive  representations,  false  adver- 
tising and  false  pretenses  used  to  induce  him  to 
change  his  place  of  employment,  against  any  per- 
son or  persons,  corporations,  companies  or  asso- 
ciations, directly  or  indirectly,  causing  such  dam- 
ages; and,  in  addition  to  all  actual  damages,  such 
workman  may  have  sustained,  shall  be  entitled  to 
recover  such  reasonable  attorney's  fees  as  the 
court  shall  fix,  to  be  taxed  as  costs  in  any  judgment 
recovered. ' '  • 

By  Article  14  of  Amendments  of.  the  Constitution 
of  the  United  States,  a  state  cannot  "deprive  any 
person  of  life,  liberty  or  property  without  due  process 
of  law,  nor  deny  to  any  person  within  its  jurisdiction 
the  equal  protection  of  the  laws. ' ' 

Section  2  of  Article  2  of  the  Constitution  of  Illinois 
provides  that: 

"No  person  shall  be  deprived  of  life,  liberty  or 
property  without  due  process  of  law. ' ' 
Does  the  act  under  consideration  violate  the  con- 
stitutional provisions  above  quoted?     If  the  act  can 
be  justified  at  all,  it  must  be  under  the  police  power 
of  the  state. 

In  considering  the  validity  of  an  enactment  of  a 
state  legislature,  under  the  police  power,  the  question 
to  be  determined  is  whether  the  regulation  or  classifi- 
cation has  been  designed  to  subserve  some  reasonable 
public  purpose,  or  is  a  mere  device  or  excuse  for  an 
unjust  discrimination,  or  for  the  oppression  of  spoli- 
ation of  a  particular  case.  Any  regulation  of  the  in- 
ternal affairs  of  the  state  fairly  subserving  a  valid 


225 

public  purpose,  and  reasonably  exercised  for  the  bene- 
fit of  the  community  at  large,  is  valid,  but  if  it  be  ar- 
bitrary, and  have  no  substantial  relation  to  the  health, 
morals,  peace  or  welfare  of  the  community,  it  will  be 
nullified.  (See  Guthrie  on  the  Fourteenth  Amend- 
ment, p.  76.) 

The  constitutional  liberty  of  speech  and  of  the  press, 
implies  a  right  to  freely  utter  and  publish  whatever 
the  citizen  may  please,  and  to  be  protected  against 
any  responsibility  for  so  doing,  except  so  far  as  such 
publications,  from  their  blasphemy,  obscenity  or 
scandalous  character  may  be  a  public  offense,  or  as  by 
their  falsehood  and  malice  they  may  injuriously  affect 
the  standing,  reputation,  or  pecuniary  interests  of  in- 
dividuals. 

Cooley  Const.  Lim.,  p.  518. 
Tiedeman  Lim.  of  Police  Power,  p.  192. 
If  the  citizen  is  free  to  publish  whatever  he  pleases 
subject  to  the  above  limitations,  he  is  at  liberty  to 
omit  from  his  publication  whatever  he  pleases,  subject 
to  the  same  limitations. 

In  Wallace  v.  Georgia  C.  &  M,  Ry.  Co.  (Ga.),  29  S.  E. 
579,  in  passing  upon  a  statute  "requiring  certain  cor- 
porations to  give  to  their  discharged  employes  or 
agents  the  causes  of  their  removal  or  discharge  when 
discharged  or  removed,"  the  Supreme  Court  of 
Georgia  said: 

"The  public,  whether  as  many  or  one,  whether 
as  a  multitude  or  a  sovereignty,  has  no  interest 
to  be  protected  or  promoted  by  a  correspondence 
between  the  discharged  agents  or  employes  and 
their  late  employer,  designed  not  for  public  but 
for  private  information  as  to  the  reasons  for  dis- 
charges, and  as  to  the  import  and  authorship  of 
all  complaints  or  communications  which  produced 
or  suggested  them.  A  statute  which  undertakes 
to  make  it  the  duty  of  incorporated  railroad,  ex- 
press and  telegraph  companies  to  engage  in  cor- 
respondence of  this  sort  with  their  discharged 
agents  and  employes,  and  which  subjects  them  in 
each  case  to  a  heavy  forfeiture,  under  the  name  of 


226 

damages,  for  failing  or  refusing  to  do  so,  is  vio- 
lative  of  the  general  private  right  of  silence  en- 
joyed in  this  state  by  all  persons,  natural  or  arti- 
ficial, from  time  immemorial,  and  is  utterly  void, 
and  of  no  effect.  Liberty  of  speech  and  writing 
is  secured  by  the  constitution,  and  incident  there- 
to is  the  correlative  liberty  of  silence,  not  less  im- 
portant nor  less  sacred.  Statements  or  communi- 
cations, oral  or  written,  wanted  for  private  in- 
formation, cannot  be  coerced  by  mere  legislative 
mandate,  at  the  will  of  one  of  the  parties  and 
against  the  will  of  the  other.  Compulsory  pri- 
vate discovery,  even  from  corporations,  enforced, 
not  by  suit  or  action,  but  by  statutory  terror,  is 
not  allowable,  where  rights  are  under  the  guar- 
dianship of  due  process  of  law." 
In  Coal  Co.  v.  The  People,  147  111.,  66,  the  court 

said: 

'  *  Property,  in  its  broader  sense,  is  not  the  phys- 
ical thing  which  may  be  the  subject  of  ownership, 
but  is  the  right  of  dominion,  possession  and  power 
of  disposition  which  may  be  acquired  over  it; 
and  the  right  of  property,  preserved  by  the  con- 
stitution, is  the  right  not  only  to  possess  and 
enjoy  it,  but  also  to  acquire  it  in  any  lawful  mode, 
or  by  following  any  lawful  industrial  pursuit 
which  the  citizen,  in  the  exercise  of  the  liberty 
guaranteed,  may  choose  to  adopt.  Labor  is  the 
primary  foundation  of  all  wealth.  The  property 
which  each  one  has  in  his  own  labor  is  the  com- 
mon heritage  and  as  an  incident  to  the  right  to 
acquire  other  property,  the  liberty  to  enter  into 
contracts  by  which  labor  may  be  employed  in  such 
way  as  the  laborer  shall  deem  most  beneficial,  and 
of  others  to  employ  such  labor,  is  necessarily  in- 
cluded in  the  constitutional  guaranty." 
The  vocation  of  an  employer,  as  well  as  that  of  his 

employe,  is  property. 

In  the  State  v.  Goodwill,  10  S.  E.  Rep.,  285,  287  (W. 

Va.),  the  court  said: 

"It  is  equally  an  encroachment  both  upon  the 


227 

just  liberty  and  rights  of  the  workman  and  his 
employer,  or  those  who  might  be  disposed  to  em- 
ploy him,  for  the  legislature  to  interfere  with  the 
freedom  of  contract  between  them,  as  such  inter- 
ference hinders  the  one  from  working  at  what  he 
thinks  proper,  and  at  the  same  time  prevents  the 
other  from  employing  whom  he  chooses.  A  person 
living  under  the  protection  of  this  government  has 
the  right  to  adopt  and  follow  any  lawful  industrial 
pursuit,  not  injurious  to  the  community,  which  he 
may  see  fit.  And,  as  incident  to  this,  is  the  right 
to  labor  and  employ  labor;  make  contracts  in  re- 
spect thereto,  upon  such  terms  as  may  be  agreed 
upon  by  the  parties ;  to  enforce  all  lawful  con- 
tracts; to  sue  and  give  evidence;  and  to  inherit, 
purchase,  lease,  sell  and  convey  property  of  every 
kind.  The  enjoyment  or  deprivation  of  these 
rights  and  privileges  constitutes  the  essential  dis- 
tinction between  freedom  and  slavery;  between 
liberty  and  oppression." 

In  State  v.  Haun  (Kan.),  47  L.  E.  A.,  369,  375,  where 
the  Supreme  Court  of  Kansas  passed  upon  a  statute 
regulating  the  time  and  manner  of  payment  to  em- 
ployes, that  court  said: 

"  *  *  the  legislature  *  :  *  places  the  laborer 
under  guardianship;  classifying  him  in  respect  to 
freedom  of  contract,  with  the  idiot,  the  lunatic,  or 
the  felon  in  the  penitentiary.  It  has  been  sought 
by  some  judges  to  justify  legislation  of  this  kind 
upon  the  theory  that  in  the  exercise  of  the 
police  powers,  a  limitation  necessary  for  the 
protection  of  one  class  of  persons  against  the 
persecution  of  another  class  may  be  placed  upon 
freedom  of  contract.  As  between  persons  sui 
juris,  what  right  has  the  legislature  to  assume 
that  one  class  has  the  need  of  protection  against 
another?  In  this  country  the  employe  of  to-day 
may  be  the  employer  next  year,  and  laws  treating 
employes  as  subjects  for  such  protective  legisla- 
tion belittle  their  intelligence,  and  reflect  upon 
their  standing  as  free  citizens.  It  is  our  boast 


228 

that  no  class  distinctions  exist  in  this  country. 
An  interference  by  the  legislature  with  the  free- 
dom of  the  citizen  in  making  contracts,  denying 
to  a  part  of  the  people,  possessing  sound  minds 
and  memory,  the  right  to  bargain  concerning  the 
equivalent  they  may  desire  to  receive  as  compen- 
sation for  their  labor,  is  to  create  or  carve  out  a 
class  from  the  body  of  the  people,  and  place  that 
class  within  the  pale  of  protective  laws  which  in- 
vidiously distinguish  them  from  other  free  citi- 
zens; thus  dividing  by  arbitrary  fiat  equally  free 
and  intelligent  people  into  distinctive  classes  or 
grades,  the  one  marked  by  law  as  the  object  of 
legislative  solicitude,  the  other  not.  This  dis- 
crimination has  been  justified  by  writers  defend- 
ing the  doctrine  of  paternalism,  and  by  some 
judges,  upon  the  asserted  fact  that  labor  is  con- 
stantly engaged  in  an  unequal  contest  with  capi- 
tal, and  that  the  former  must  be  re-enforced  by 
the  legislative  power  of  the  state,  to  prevent  its 
overthrow  in  the  conflict.  Freedom  of  action- 
liberty — is  the  corner  stone  of  our  governmental 
fabric. ' 

In  Ruhstrat  v.  The  People,  185  111.,  at  p.  142,  the 
court  said: 

"The  legislature  has  no  power,  under  the  guise 
of  police  regulations,  to  arbitrarily  invade  the  per- 
sonal rights  and  personal  liberty  of  the  individual 
citizen.  Its  determination  upon  this  question  is 
not  final  nor  conclusive.  If  it  pass  an  act  osten- 
sibly in  the  exercise  of  the  police  power,  but  which 
in  fact  interferes  unnecessarily  with  the  personal 
liberty  of  the  citizen,  the  courts  have  a  right  to 
examine  the  act  and  see  whether  it  relates  to  the 
object  which  the  exercise  of  the  police  power  is 
designed  to  secure,  and  whether  it  is  appropriate 
for  the  promotion  of  such  objects.  When  the 
police  power  is  exerted  for  the  purpose  of  regu- 
lating a  useful  business  or  occupation  and  the 
mode  in  which  that  business  shall  be  carried  on  or 
advertised,  the  legislature  is  not  the  exclusive 


229 

judge  of  what  is  a  reasonable  and  just  restraint 
upon  the  constitutional  right  of  the  citizen  to  pur- 
sue his  calling,  and  to  exercise  his  own  judgment 
as  to  the  manner  of  conducting  it." 

In  Frorer  v.  The  People,  141  111.,  171,  at  p.  185,  the 
Illinois  Supreme  Court  said: 

' '  The  police  power  is  limited  to  enactments  hav- 
ing reference  to  the  comfort,  the  safety  or  the 
welfare  of  society,  and  under  guise  of  it  a  person 
cannot  be  deprived  of  a  constitutional  right.  *  : 
Theoretically,  there  is  among  our  citizens  no  in- 
ferior class,  other  than  those  degraded  by  crime 
or  other  vicious  indulgences  of  the  passions. 
Those  who  are  entitled  to  exercise  the  elective 
franchise  are  deemed  equals  before  the  law,  and 
it  is  not  admissible  to  arbitrarily  brand,  by  stat- 
ute, one  class  of  them,  without  reference  to  and 
wholly  irrespective  of  their  actual  good  or  bad 
behavior  (in  the  statute  under  discussion  without 
reference  to  the  merit  or  justice  of  the  labor 
trouble)  as  too  unscrupulous,  and  the  other  class 
as  too  imbecile  or  timid  and  weak,  to  exercise  that 
freedom  in  contracting  which  is  allowed  to  all 
others. ' ' 

To  the  same  effect  see, 

Ritchie  v.  The  People,  155  111.,  98,  116. 

In  Matthews  v.  The  People  (202  111.,  389,  401),  the 
Illinois  Supreme  Court  said: 

"An  employer  whose  workmen  have  left  him 
and  gone  upon  a  strike,  particularly  when  they 
have  done  so  without  any  justifiable  cause,  is  en- 
titled to  contract  with  other  laborers  or  workmen 
to  fill  the  places  of  those  who  have  left  him.  Any 
workman  seeking  work  has  a  right  to  make  a  con- 
tract with  such  an  employer  to  work  for  him  in 
the  place  of  any  one  of  the  men,  who  have  left 
him  to  go  out  upon  a  strike.  *  *  *  It  is  now  well 
settled  that  the  privilege  of  contracting  is  both  a 
liberty  and  a  property  right.  Liberty  includes 
the  right  to  make  and  enforce  contracts,  because 
the  right  to  make  and  enforce  contracts  is  included 


230 

in  the  right  to  acquire  property.  Labor  is  prop- 
erty. To  deprive  the  laborer  and  the  employer  of 
this  right  to  contract  with  one  another  is  to  vio- 
late Section  2  of  Article  2  of  the  Constitution  of 
Illinois,  which  provides  'that  no  person  shall  be 
deprived  of  life,  liberty  or  property  without  due 
process  of  law,'  it  is  equally  a  violation  of  the 
5th  and  14th  Amendments  of  the  Constitution  of 
the  United  States,  which  provides  'that  no  person 
shall  be  deprived  of  life,  liberty  or  property 
without  due  process  of  law,'  and  'that  no  state 
shall  deprive  any  person  of  life,  liberty  or  prop- 
erty without  due  process  of  law,  nor  deny  to  any 
person  within  its  jurisdiction  the  equal  protection 
of  the  laws.'  " 
To  the  same  effect  see : 

Millett  v.  People,  117  111.,  294. 

Adams  v.  Brenan,  177  111.,  194. 

Fiske  v.  People,  188  111.,  206. 

R.  R.  Co.  v.  Jacksonville,  67  111.,  37. 

People  v.  Warren,  34  N.  Y.,  942. 

People  v.  Gillson,  109  N.  Y.,  389. 

In  re  Jacobs,  98  N.  Y.,  98. 

Pumpelly  v.  Green  Bay  Co.,  13  Wall.,  166. 

Wynehamer  v.  People,  43  N.  Y.,  378. 

Godcharles  v.  Wigeman,  6  Atl.,  354. 

Powell  v.  Pennsylvania,  127  U.  S.,  686. 

H olden  v.  Hardy,  169  U.  S.,  366. 

Dent  v.  West  Virginia,  129  U.  S.,  114. 

Yick  Wo  v.  Hopkins,  118  U.  S.,  356. 

Gas  Co.  v.  Light  Co.,  115  U.  S.,  650. 

People  v.  Rosenhay,  138  N.  Y.,  410. 

Colon  v.  Fisk,  153  N.  Y.,  188. 

People  v.  Marx,  99  N.  Y.,  377. 

Lawton  v.  Steele,  152  U.  S.,  133. 

Minnesota  v.  Barber,  136  U.  S.,  313. 

Barbier  v.  Connelly,  115  U.  S.,  31. 

State  v.  Juloiv,  31  S.  W.,  781. 

Coe  v.  Schultz,  47  Barb.,  64. 

Frisbie  v.  U.  S.,  157  U.  S.,  160. 

Comm.  v.  Perry,  155  Mass.,  117. 


231 

In  Coe  v.  Schultz,  47  Barb.,  64,  in  speaking  of  the 
constitutional  limitations  of  the  police  power  in  creat- 
ing new  offenses,  the  Court  said : 

' '  I  am  not  willing  to  concede  that  the  legislature 
can  create  a  public  nuisance,  or  a  new  definition 
of  a  public  nuisance,  unknown  to  the  common  law 
decisions.  I  am  not  willing  to  concede  that  the 
legislature  can  constitutionally  declare  an  act  or 
thing  to  be  a  common  nuisance,  which  palpably, 
according  to  our  present  experience  or  informa- 
tion, is  not  and  cannot  be,  under  any  circum- 
stances, a  common  nuisance  by  the  common  law 
definition,  or  common  law  decisions.  I  am  not 
willing  to  concede  that  the  legislature  can  consti- 
tutionally declare  or  authorize  any  sanitary  com- 
mission or  board  to  declare  the  keeping  or  the  use, 
in  any  way,  of  sugar  or  vinegar,  to  be  a  common 
nuisance,  because  the  one  is  sweet,  and  the  other 
sour,  or  for  any  other  reason.  By  such  an  unlim- 
ited power,  it  is  easy  to  see  that  any  citizen  might 
be  deprived  of  his  property  without  compensa- 
tion, and  without  any  colorable  pretext  that  the 
public  good  required  such  deprivation.  It  is  not 
impossible  to  conceive  that  at  some  future  day 
•  there  might  be  a  legislator  thinking  the  use  of 

water  in  any  way  to  be  a  nuisance. ' ' 
The  attempted  control  by  the  legislature  of  labor 
advertising  and  labor  contracts,  is  either  a  legitimate 
or  an  arbitrary  exercise  of  the  police  power.  Under 
the  authorities  above  cited,  it  is,  in  my  opinion,  an 
arbitrary  exercise  of  the  police  power  and  of  no  ef- 
fect. 

The  safety,  health,  morals  or  welfare  of  the  public 
in  general,  are  in  no  way  safe-guarded  by  the  enforced 
insertion  of  vexatious  matter  in  a  labor  advertise- 
ment. Mere  harmless  and  passive  inaction  is  made  a 
substantive  crime,  and  that  where  there  is  no  rational 
duty,  legal  or  moral,  to  make  discovery.  Silence  with 
respect  to  matters  not  necessarily  of  general  interest, 
is  punished  with  statutory  penalties  in  addition  to  the 
manifest  inconvenience  flowing  from  a  form  of  adver- 


232 

tisement  that  defeats  the  very  purpose  of  advertis- 
ing. 

The  last  portion  of  Section  2  of  the  act  declares  that 
to  be  false  advertisement  which  is  palpably  not  false 
advertisement:  it  declared  that  to  be  misrepresenta- 
tion which  is  palpably  not  misrepresentation,  where 
there  is  no  misstatement  of  fact,  no  coloring  of  cir- 
cumstance and  no  false  and  fraudulent  inducement  con- 
veyed— no  unfairness  attempted  and  no  concealment 
made  of  what  should  properly  be  disclosed. 

When  the  legislature  defines  an  innocent  avoidance 
of  any  representation  to  be  a  misrepresentation,  it  does 
a  vain  act,  an  act  as  futile  as  if  it  were  to  fix  the  hours 
of  sunrise  and  sunset  or  to  legislate  that  black  is 
white. 

In  Colder  v.  Bull  (3  Dallas,  386,  388),  Judge  Chase, 
as  early  as  the  year  1797,  said  for  the  U.  S.  Supreme 
Court : 

"The  legislature  cannot  change  innocence  into 
guilt  or  punish  innocence  as  a  crime,  or  violate  the 
right  to  antecedent  lawful  private  contract,  or  the 
right  of  private  property." 

The  vicious  portion  of  the  act  is  the  last  part  of 
Section  One,  as  follows : 

"  FAILURE  TO  STATE  in  any  advertisement,  pro- 
posal or  contract  for  the  employment  of  workmen 
that   there  is   a   strike,   lockout,   or   other   labor 
troubles  at  the  place  of  the  proposed  employment, 
when  in  fact  such  strike,  lockout  or  other  labor 
trouble  then  actually  exists  at  such  place,  shall  be 
deemed  as  false  advertisement  and  misrepresen- 
tation for  the  purposes  of  this  Act." 
Whosoever  is  not  free  to  make  known  his  wants 
with  reference  to  labor,  in  his  own  way,  so  long  as 
his  purpose  is  consistent  with  the  rights  of  others,  is 
restricted   in   an    essential    element    of   the   right   to 
contract  and  is  deprived  of  liberty  and  property.    The 
right  to  advertise  for  labor  is  a  necessary  corollary  of 
the  right  to  employ  labor.     An  arbitrary  restriction 
of  this  right  is  a  virtual  confiscation  of  property.    The 
portion  of  the  law  last  cited  is  in  my  opinion,  uncon- 


233 

stitutional.  It  is  an  arbitrary  interference  with  liberty 
of  contract,  and  an  improper  regulation  of  private 
business,  and  I  do  not  believe  that  the  courts  will 
uphold  it  as  a  valid  exercise  of  the  police  power  of 
the  state,  and  I  therefore  conclude  that  it  is  uncon- 
stitutional. 


NOTE: — A   number   of   prosecutions   have   been   instituted  under  the 
above  law;  thus  far   (1907),  none  of  them  have  been  successful. — Ed. 


LIABILITY  OF  A  BANK  FOE  FAILURE  TO  PROTEST  A  NOTE  SENT 
TO  IT  FOR  COLLECTION  AND  FOR  FAILURE  TO  NOTIFY  THE 
PAYEE. 

(Beacon  Falls  Rubber  Shoe  Co.,  September  5,  1903.) 
"We  should  like  to  have  the  opinion  of  your 
legal  department  as  to  the  liability  of  a  bank  on 
a  note  sent  to  it  for  collection,  which  they  have 
failed  to  protest  when  payment  has  been  refused, 
and  also  failed  to  notify  the  payee." 
It  is  the  duty  of  a  bank  to  use  due  diligence  in  mak- 
ing protest  and  giving  notice  of  dishonor  in  case  of 
non-payment  of  a  note.    If  the  bank  has  been  guilty 
of  negligence  in  the  performance  of  its  duties,  the 
holder  of  the  note  is  entitled  to  recover  the  actual  loss 
occasioned  by  the  improper  conduct  of  the  bank.    If 
there  is  no  loss  there  is  no  liability. 


WHETHER  THE  ADDING  OF  TURPENTINE  TO  VARNISH  AND 
MIXING  STAINS  COMES  WITHIN  THE  PROHIBITION  OF  THE 
CHILD  LABOR  LAW. 

(Tonk  Manufacturing  Company,  September  2,  1903.) 
"We  quote  herein  from  page  13  of  the  Illinois 
Department  of  Factory  Inspection  and  Laws  re- 
lating thereto :  '  They  shall  not  be  employed  in 
any  capacity  in  the  manufacture  of  paints,  colors 
or  white  lead.' 

"We  do  not  manufacture,  but  we  do  add  tur- 
pentine to  varnish  and  we  mix  stains.    Does  this 


234 


i 

come  under  the  law  prohibiting  children  doing 
this  work?" 

I  am  of  the  opinion  that  the  employment  of  children 
in^  the  mixing  of  turpentine  and  varnish  and  in  the 
mixing  of  stains  comes  within  the  prohibition  of  the 
Child  Labor  Law. 


WHETHER   A   MINOR   CAN   LEGALLY  ASSIGN   HIS   WAGES. 

(Chas.  Emmerich  &  Co.,  September  14,  1903.) 

"One  of  our  employes,  under  twenty-one  years 
of  age,  some  time  ago  purchased  a  suit  of  clothes, 
giving  to  the  seller  an  assignment  of  his  wages 
as  guaranty  of  payment,  also  a  letter  signed  by 
his  father  guaranteeing  payment.  The  clothing 
company  has  now  served  notice  upon  us  demand- 
ing us  to  withhold  all  money  due  the  buyer  for 
salary,  etc.,  and  stating  that  they  would  hold  us 
responsible  for  the  amount. 

Kindly  advise  us  if  we  can  legally  obey  the 
summon.  Does  the  fact  that  the  buyer  is  under 
twenty-one  years  of  age  invalidate  the  assign- 
ment of  his  wages,  and  can  he  legally  force  us 
to  pay  the  wages  demanded  by  the  clothing  con- 
cern? 

Will  you  kindly  give  this  matter  your  prompt 
attention  so  that  we  may  be  put  to  no  embarrass- 
ment by  the  clothing  company?" 
The  services  and  earnings  of  a  minor  child  belong 
to  his  parents  unless  the  child  has  been  legally  emanci- 
pated.     Such  emancipation  may  arise  from  an  ex- 
press agreement  or  be  implied  from  the  conduct  of 
the  parent  and  the  circumstances  of  the  case,  or  by 
the  marriage  of  the  child  with  the  consent  of  the  par- 
ents.   The  minor,  unless  emancipated,  has  no  right  to 
make  any  assignment  of  his  wages  and  the  employer 
cannot  be  compelled  to  pay  the  same  to  the  assignee. 


235 


THE   RESPONSIBILITY   OP  THE   CONSIGNOR   WHEN    GOODS   ARE 
SHIPPED  C.  O.  D. 

(Geo.  E.  Watson  Co.,  September  3,  1903.) 
"We  made  a  recent  shipment  to  a  customer  by 
express  C.  0.  D.  Part  of  the  goods  were  not  de- 
livered and  he  asks  us  to  refund  the  value.  The 
goods  were  sold  f.  o.  b.  Chicago.  We  would  like 
to  know  where  our  responsibility  ends.  We  also 
frequently  ship  goods  by  freight  with  draft  at- 
tached to  bill  of  lading.  The  goods  are  consigned 
to  us  and  the  bill  of  lading  is  endorsed  to  con- 
signor, which  he  gets  when  he  pays  the  draft. 
Where  does  our  responsibility  end  in  that  case! 
The  goods  also  were  sold  f.  o.  b.  Chicago. 

We  enclose  our  customer's  letter  for  further  in- 
formation, and  will  you  kindly  request  your  gen- 
eral counsel,  Mr.  Levy  Mayer,  to  pass  on  this 
question  ? ' ' 

Inasmuch  as  the  goods  were  sent  C.  0.  D.  the  title 
remained  in  the  consignor,  even  though  the  goods 
were  sold  "F.  0.  B.  Chicago,"  although  upon  this 
proposition  the  authorities  are  conflicting.  The  respon- 
sibility of  the  consignor  continues,  therefore,  until  the 
goods  are  delivered  to  and  accepted  by  the  consignee. 
The  same  is  true  of  the  goods  sent  by  freight  with 
bill  of  lading  attached  to  draft.  The  title  remains  in 
the  consignor  until  the  payment  of  the  draft  and  the 
delivery  of  the  bill  of  lading.  Until  this  is  done  the 
responsibility  of  the  consignor  continues. 

RE-AFFIRMANCE  OF  OPINION  OF  SEPTEMBER  14,  1903,  AS 
TO  WHO  SUSTAINS  THE  LOSS  ON  GOODS  DAMAGED  IN 
TRANSIT  WHERE  THE  CONSIGNOR  PAYS  OR  ALLOWS  THE 
FREIGHT  OR  THE  GOODS  ARE  SOLD  "p.  O.  B.  POINT  OF  SHIP- 
MENT. ' ' 

(American  Steel  &  Wire  Co.,  October  24,  1903.) 

"Kef erring  to  your  circular  of  July  28th,  1903, 
giving  opinion  of  Mr.  Levy  Mayer  to  Hibbard, 


236 

Spencer,  Bartlett  &  Co.  as  to  who  sustains  the 
loss  on  goods  damaged  in  transit  when  the  con- 
signor is  not  liable,  beg  to  say  that  our  counsel, 
Pam,  Calhoun  &  Glennon,  dissents  on  proposition 
No.  3  of  that  opinion." 

"Proposition  No.  3"  called  for  my  opinion  as  to 
who  must  bear  the  loss  where  goods  are  lost  or  dam- 
aged in  transit  under  a  contract,  which  in  the  very 
words  of  the  question  propounded  to  me,  is  as  fol- 
lows: 

"We  quote  nails  to  you  at  $2.50  rates  F.  0.  B. 
Chicago,  freight  allowed  to  your  town. ' ' 

My  prior  opinion  was  to  the  effect  that,  in  the  ab- 
sence of  other  qualifying  circumstances,  the  carrier 
was  the  agent  of  the  consignor,  and  any  loss  would 
fall  upon  the  consignor.  That  opinion  expressly  re- 
ferred to  a  prior  opinion  which  stated  that  the  pre- 
payment of  freight  by  a  consignor  made  the  carrier 
his  agent.  Counsel  for  the  Wire  Co.  comment  upon 
my  opinion  by  saying  that  "It  is  surely  incorrect,  "and 
the  loss  in  such  a  case  would  fall  on  the  consignee." 
I  reply  thus : 

Whether  the  title  to  goods  passes  upon  the  delivery 
to  the  carrier,  is  primarily  a  question  of  intention  to 
be  determined  from  the  contract  and  from  all  the 
facts  and  circumstances  of  the  case.  It  is  a  general 
rule  that  a  delivery  to  a  carrier,  a  fortiori  to  one 
especially  by  the  purchaser,  is  a  delivery  to  the  vendee, 
the  carrier,  being  considered  as  the  agent  of  the 
vendee. 

If  the  vendor  undertakes  to  make  delivery  at  the 
vendee's  residence,  or  place  of  business,  or  at  a  dis- 
tant place,  he  assumes  the  risk  of  carriage,  and  the 
title  to  the  goods  remains  in  him.  These  rules,  how- 
ever, are  not  absolute  and  may  be  controlled  by  other 
circumstances  showing  an  intention  to  reserve  or  to 
pass  the  jus  disponendi  of  the  goods. 

"F.  0.  B."  means  only  "free  on  board,"  i.  e.,  that 
the  consignor  will  put  the  goods  on  the  cars  free  of 
charge  to  the  consignee, — in  other  words  that  the 
consignor  will  pay  the  cartage. 


237 

In  Sheffield  Furnace  Co.  v.  Hull  Coal  and  Coke  Co., 
(Ala.),  14  So.  Kep.,  673,  the  court  said: 

* '  There  can  be  no  doubt  as  to  what  these  words, 
'free  on  board,'  mean,  in  the  connection  we  find 
from  here.  Their  meaning  in  contracts  of  this 
sort  is  plain  and  well  understood.  They  import 
that  the  purchaser  shall  be  free  from  all  expense 
which  may  have  attended  the  shipment  and  trans- 
portation to  the  point  named.  Had  the  provision 
related  to  the  initial  point  of  the  transportation, 
the  buyer  would  have  been  entitled  to  the  shipment 
at  that  place  free  from  all  expense  incident  to 
loading  the  cars, — all  expense,  indeed,  incurred  in 
the  premises,  up  to  and  including  the  loading  of 
the  cars.  Then  it  would  have  been  upon  the  buyer 
to  pay  the  freight — the  cost  of  transportation — 
to  the  final  destination  of  the  consignment.  The 
provision  here  having  relation  to  the  point  of 
final  delivery,  it  can  mean  nothing  else  than  that 
the  seller  is  to  pay  all  costs  and  charges  up  to 
that  point,  and  that  the  buyer  is  entitled  to  re- 
ceive the  consignment  free  of  all  such  costs  and 
expenses." 

It  is  true  that  in  some  cases  it  is  held  that  a  deliv- 
ery F.  0.  B.  passes  title  and  risk  to  the  consignee, 
but  in  my  opinion  this  is  merely  a  reinstatement  of  the 
general  rule  that  a  delivery  to  the  carrier  is  a  delivery 
to  the  consignee.  The  title  would  pass  even  though 
the  term  "F.  0.  B."  was  not  used.  A  sale  under  an 
F.  0.  B.  contract  prima  facie  passes  title  when  the 
goods  are  put  on  board  the  cars,  but  this  is  not  con- 
clusive. The  effect  of  the  words  can  be  controlled  by 
other  circumstances.  Undoubtedly  the  goods  would 
be  at  the  risk  of  the  consignor  until  placed  upon  the 
cars,  but  it  does  not  necessarily  follow  that  thereafter 
they  would  be  at  the  risk  of  the  consignee. 

In  Ogg  v.  Shuter,  L.  K.  I.  C.  P.  D.  47,  plaintiffs 
entered  into  a  contract  to  buy  certain  potatoes  to  be 
delivered  free  on  board  at  Dunkirk,  price  to  be  paid 
in  cash  against  bill  of  lading,  plaintiffs  to  pay  part  of 
the  price  as  earnest  money.  The  Court  of  Common 


238 

Pleas  held  the  vendor's  intention  to  reserve  title  was 
overridden  by  the  provision  in  the  contract  that  the 
potatoes  should  be  delivered  "free  on  board."  This 
decision,  however,  was  reversed  in  the  Court  of  Ap- 
peal (1  C.  P.  D.,  47),  the  court  holding  that  the  title 
did  not  pass,  even  though  the  goods  were  sold  F.  0.  B., 
as  there  was  an  apparent  intention  to  reserve  title. 

Again,  the  words  F.  0.  B.  alone  do  not  necessarily 
refer  to  title  or  to  delivery.  They  refer  primarily  to 
the  expense  of  placing  the  goods  on  board  the  cars. 
It  is  true  that  "Delivery  F.  0.  B."  would  ordinarily 
pass  the  title  upon  such  delivery.  But  even  this  would 
not  be  conclusive  (Ogg  v.  Shuter,  supra).  In  the  case 
under  discussion  the  goods  are  sold  "$2.50  rates  F. 
0.  B.  Chicago."  Nothing  is  said  as  to  delivery.  F. 
0.  B.  refers  to  rates  and  not  to  title  or  to  delivery. 
This  is  evidenced  also  by  the  punctuation.  The  con- 
tract meant  that  the  rates  or  prices  which  the-  con- 
signor quoted  were  "F.  0.  B.  Chicago,"  that  is,  they 
were  to  be  the  prices  which  the  goods  would  cost  the 
consignee  at  Chicago ;  in  other  words,  the  goods  would 
be  put  on  board  the  cars  at  Chicago  at  the  expense 
of  the  consignor.  The  freight  expense  thereafter  in- 
curred was  to  be  advanced  by  the  consignee  and  de- 
ducted from  the  purchase  price. 

Neimeyer  v.  Railroad  Co.  (Neb.),  40  L.  B.  A.,  534, 
is  squarely  in  point.  There  certain  lumber  was  or- 
dered to  be  shipped  from  Waldo,  Ark.,  to  Omaha,  Neb. 
The  goods  were  sold  "Prices  F.  0.  B.  Omaha,  Neb." 
It  was  contended  that  the  goods  were  not  delivered 
until  their  arrival  at  Omaha.  The  court  said : 

"We  think  the  true  construction  of  the  contract 
is  the  one  placed  thereon  by  the  district  court,  and 
is  in  line  with  the  explanation  of  the  phrase  in  the 
contract  under  construction  made  by  the  first  and 
last  of  the  witnesses  just  named.  The  word 
'Prices,'  which  precedes  (f.  o.  b.  Omaha,  Ne- 
braska,' is  of  importance  in  the  construction  of 
this  contract.  By  that  expression  Neimeyer  & 
Co.  meant  that  the  prices  which  they  had  fixed 


239 

to  the  lumber  sold  Simpson  &  Co.  were  to  be  the 
prices  which  the  lumber  should  cost  Simpson  & 
Co.  at  Omaha.  Not  that  the  delivery  of  the  lum- 
ber to  Simpson  &  Co.  should  take  place  at  Omaha, 
but  that  the  price  charged  Simpson  &  Co.  by  Nei- 
meyer  &  Co.  for  the  lumber  was  to  be  its  price 
at  Omaha.  In  other  words,  that  Neimeyer  &  Co. 
should  pay  the  freight  on  this  lumber  from  Waldo, 
Arkansas,  to  Omaha,  Nebraska;  or,  what  is  the 
same  thing,  that  Simpson  &  Co.,  or  their  vendee, 
Dietz,  might  pay  the  freight,  and  then  remit  fiie 
purchase  price  of  the  lumber  less  the  freight." 
The  court  continues: 

1 '  The  contract,  then,  between  the  parties,  as  evi- 
denced by  their  correspondence,  does  not  provide 
that  the  delivery  of  this  lumber  should  take  place 
at  Omaha.  To  give  that  construction  to  the  con- 
tract, the  expression,  'Prices  f.  o.  b.  Omaha,' 
would  have  to  be  read,  *  Delivery  f.  o.  b.  Omaha.' 
To  give  the  contract  this  effect  would  be  to  put 
a  violent  and  unnatural  construction  upon  the  lan- 
guage used." 

The  question  must,  therefore,  be  determined  by  ref- 
erence to  the  other  provision  of  the  contract,  "freight 
allowed  to  your  town."  The  allowance  of  freight  by 
the  consignor  to  be  deducted  from  the  purchase  price 
is  the  same  in  effect  as  a  pre-payment  by  the  con- 
signor. 

Neimeyer  v.  E.  E.  Co.,  40  L.  E.  A.,  534  (Neb.). 
Brewing  Assn.  v.  Nipp,  6  Kan.  App.,  730 ; 
Suit  v.  Woodhall,  113  Mass.,  391. 
What  is  the  effect  of  the  prepayment  of  freight 
by  the  consignor! 

In  Devine  v.  Edwards,  101  111.,  138,  a  seller  of  milk 
lived  in  Dundee,  111.,  and  the  purchaser  lived  at  Chi- 
cago. The  seller  sued  the  purchaser  to  recover  for 
the  price  of  milk  which  he  claimed  to  have  sold  and 
delivered  to  him.  The  purchaser  interposed  a  defense 
based  on  this  state  of  facts :  He  claimed  that  he  had 
been  buying  milk  from  the  plaintiff  for  five  years; 


240 

that  the  cans  did  not  hold  what  the  parties  supposed 
they  did,  and  in  consequence  he  had  overpaid  the 
seller.  The  court  refused  an  instruction  as  follows : 

"The  jury  are  instructed,  that  if  they  believe, 
from  the  evidence,  that  during  the  five  years  im- 
mediately prior  to  the  commencement  of  this  suit 
the  defendant  purchased  milk  of  the  plaintiff  by 
the  gallon,  to  be  shipped  from  Dundee  to  Chicago, 
and  that  the  plaintiff  agreed  to  pay  the  freight  on 
such  milk,  and  that  nothing  was  said  by  either 
the  plaintiff  or  defendant  in  regard  to  the  place 
of  delivery,  then  the  law  makes  Chicago  the  place 
of  delivery." 

The  Supreme  Court  held  this  instruction  should  have 
been  given,  thus  ruling  in  effect  that  the  payment  of 
freight  by  the  seller  of  the  milk  made  the  place,  of 
delivery  Chicago. 

In  Brewing  Assn.  v.  Nipp,  6  Kans.  App.,  730,  the 
Brewing  Company  sold  certain  beer  to  the  defendant 
to  be  shipped  from  Missouri  to  Kansas  under  a  con- 
tract, which  provided  that  the  defendant  should  pay 
the  freight  and  charge  the  amount  of  the  same  to  the 
Brewing  Company.  The  court  said: 

"The  delivery  is  ordinarily  made  to  the  pur- 
chaser by  a  delivery  to  the  carrier.  When  the 
purchaser  is  to  pay  the  freight  the  carrier  is 
his  agent.  'The  illegality  of  the  sale  of  intoxi- 
cating liquors  frequently  depends  upon  the  place 
where  the  sale  is  made;  this  is  governed  by  the 
place  where  the  sale  is  completed  by  delivery. 
Where  the  vendor  is  to  and  does  pay  the  freight 
to  the  place  of  delivery  the  place  of  delivery  be- 
comes the  place  of  sale.'  11  Am.  &  Eng.  Encyc. 
of  Law,  742,  and  cases  there  cited. 

'If  by  the  terms  of  the  contract  the  seller  is  re- 
quired to  send  or  forward  the  goods  to  the  buyer, 
the  title  and  risk  remain  in  the  seller  until  the 
transportation  is  at  an  end,  after  which  time  the 
title  is  vested  in  the  buyer.  Bloyd  v.  M.  <&  J.  Pol- 
lock, 27  W.  Va.,  75;  Fry  &  Hartman  v.  Lucas, 


29  Pa.  St.,  356;  Taylor,  v.  Cole,  111  Mass.,  363, 
etc. '    21  Am.  &  Eng.  Encyc.  of  Law,  477,  note. 

The  freight  charges  were  to  be  paid  by  Saun- 
ders  in  the  first  instance,  but  were  to  be  charged 
to  the  Brewing  Company,  and  deducted  from  the 
contract  price  of  the  liquors.  Under  a  contract 
and  transaction  quite  similar  to  these,  the  Su- 
preme Court  of  Iowa,  in  Gipps  Brewing  Co.  v. 
DeF nance  (91  Iowa,  101,  58  N.  W.  Rep.,  1087), 
held  that  the  sale  was  completed  by  the  delivery 
of  the  liquors  at  their  destination. 

Following  these  decisions,  which  we  think  are 
founded  upon  correct  principles,  we  must  hold 
that  the  sales  under  the  contract  in  this  case  were 
made  in  Wichita,  Kan.  It  is  immaterial  where 
the  agreement  to  sell  was  made." 
In  Berger  v.  State,  50  Ark.,  20,  the  court  said : 

*  *  By  assuming  to  pay  the  cost  of  carriage,  with- 
out any  adjustment  of  the  charge  between  them- 
selves and  the  intended  buyer,  the  Lederers  (the 
vendors)  manifested  the  intent  to  hire  the  carrier 
to  transport  the  liquor  as  their   agent,  just  as 
they  did  the  man  employed  to  complete  the  trans- 
portation for  them  by  delivery  at  Berger 's  store." 
In  Murray  v.  Nichols  Co.,  11  N.  Y.  S.,  734,  the  court 
said : 

"The  defendant  proved  that  the  deliveries  were 
to  be  made  in  New  York ;  that  although  the  goods 
came  from  Meriden,  Conn.,  the  freight  was  always 
charged  and  paid  by  the  plaintiff  (vendor).  The 
risk  of  transportation  was  therefore  upon  him, 
and  he  in  turn  had  his  remedy  for  injuries  to  the 
goods  against  his  carrier." 

In  Vol.  11  Encyc.  of  Law  (1st  Ed.),  p.  742,  the  rule 
is  laid  down  as  follows: 

"The  illegality  of  the  sale  of  intoxicating 
liquors  frequently  depends  upon  the  place  where 
the  sale  is  made;  this  is  governed  by  the  place 
where  the  sale  is  completed  by  delivery,  where 
the  vendor  is  to  and  does  pay  the  freight  to  the 


242 

place  of  delivery,  the  place  of  delivery  becomes 
the  place  of  sale." 

In  Suit  v.  Woodhall,  113  Mass.,  391,  the  court  held, 
where  goods  were  shipped  from  Kentucky  to  Massa- 
chusetts, the  buyer  paying  the  freight  and  deducting 
the  same  from  the  purchase  price,  that  the  sale  took 
place  in  Massachusetts,  as  this  was  equivalent  to  an 
agreement  to  deliver  in  Massachusetts. 

The  Supreme  Court  of  this  state  in  effect  holds  that 
the  payment  of  freight  by  a  consignor  is  conclusive 
evidence  of  an  intention  to  reserve  title.  See  Nei- 
meyer  v.  R.  R.  Co.,  40  L.  R.  A.,  334. 

I  am  of  the  opinion,  however,  that  the  better  rule 
is  that  it  is  prima  facie  evidence  only.  It  is,  however, 
a  very  strong  circumstance  showing  an  intention  not 
to  pass  title.  The  consignor  makes  the  contract  on  his 
own  behalf  with  the  carrier.  This  is  in  effect  an  agree- 
ment to  deliver  at  the  place  of  business  of  the  con- 
signee. Of  course,  if  the  consignor  acts  as  the  agent 
of  the  consignee,  the  rule  is  otherwise. 

I  am  of  the  opinion  that  the  term  "F.  0.  B."  as 
used  in  the  above  quotation  refers  only  to  rates  and 
not  to  delivery,  and  that  the  general  rule  that  deliv- 
ery to  the  consignee  is  not  applicable  for  the  reason 
that  the  consignor  pays  the  freight.  I,  therefore, 
without  hesitation,  reaffirm  my  prior  opinion. 


AS    TO    WHAT    CONSTITUTES   DOING    BUSINESS    IN    MONTANA. 

(Illinois  Manufacturers'  Association,  October  24, 

1903.) 

"We  desire  to  obtain  the  opinion  of  the  general 
counsel  as  to  whether  or  not  the  following  state- 
ment of  facts  would  constitute  doing  business  in 
the  State  of  Montana  or  whether  the  transaction 
would  be  considered  interstate  commerce : 

First.  We  have  traveling  salesmen  residing  in 
Montana  who  take  orders  from  customers,  which 
are  forwarded  to  Chicago  for  approval  and  ship- 
ment. 


243 

Second.  It  is  the  custom  to  ship  solid  car  lots, 
part  of  which  are  on  orders  received  in  the  usual 
way  and  the  balance  consigned  to  the  order  of 
ourselves  to  be  held  there  by  some  customer  or 
transfer  company  to  order  on  storage,  later  to 
be  delivered  to  other  customers  when  sold.  In 
some  instances,  as  a  matter  of  expediency,  the 
salesman  assumes  authority  and  delivers  the 
goods  to  a  customer  before  the  order  sheet  has 
been  stamped  or  0.  K.  'd  at  this  office.  No  formal 
permission  has  been  granted.  However  one  sales- 
man has  been  permitted  to  continue  this  practice 
for  some  time. 

Without  authority  from  us  one  salesman  has 
used  a  rubber  stamp  in  large  type  as  follows: 
'Montana  Branch,  Butte,  Mont.'  " 
The  taking  of  orders  by  traveling  salesmen  does 
not  constitute  doing  business  in  Montana.    Nor  does 
the  use  of  the  designation  "Montana  Branch"  under 
the  circumstances  set  forth  in  the  letter,  constitute 
"doing  business." 

I  am  of  the  opinion,  however,  that  the  method  of 
business  transacted  by  the  company  as  described  in 
paragraph  marked  second  of  their  letter  is  doing  busi- 
ness in  Montana,  and  subjects  that  company  to  the 
foreign  corporation  laws  of  Montana.  The  matter  is 
covered  by  my  opinion  of  this  date  to  Deere  &  Co. 


CONSTITUTIONALITY  OF  THE  ACT  PROHIBITING  THE  WITH- 
HOLDING OF  ANY  PART  OF  THE  WAGES  OF  LABORERS,  ETC., 
UNDER  THE  GUISE  OR  PRETEXT  THAT  THEY  ARE  A  GIFT  OR 
GRATUITY,  ETC. 

(Parlin  &  Orendorff  Co.,  October  24,  1903). 

"Will  you  please  be  kind  enough  to  procure  for 
us  an  opinion  by  our  able  attorney,  Mr.  Levy 
Mayer,  as  to  the  constitutionality  of  an  act  ap- 
proved May  14,  1903,  entitled  'An  Act  to  regulate 
and  enforce  the  payment  of  wages  due  laborers, 
servants  and  employes,  by  corporations  doing 


244 

business  in  this  state,'  and  on  receipt  of  same, 
kindly  favor  us  with   copy   of  his   opinion  and 
oblige. ' ' 
Section  1  of  the  law  in  question  is  as  follows : 

"Be  it  enacted  by  the  People  of  the  State  of 
Illinois  represented  in  the  General  Assembly:  It 
shall  be  unlawful  for  any  corporation  doing  busi- 
ness within  this  state  to  withhold  from  any  of  its 
laborers,  servants  or  employes  any  part  or  per 
cent,  of  the  wages  earned  by  such  laborer,  servant 
or  employe,  beyond  the  date  of  the  regular  payday 
of  said  corporation,  under  the  guise  or  pretext, 
that  the  amount  of  wages  so  withheld  is  to  be 
given  or  presented  to  such  laborer,  servant  or  em- 
ploye, as  a  present  or  gratuity  from  said  corpo- 
ration at  the  expiration  of  any  future  date,  on 
condition  that  the  services  of  such  labored,  servant 
or  employe  have  been  performed  to  the  entire 
satisfaction  of  said  corporation  or  upon  condition 
that  such  laborer,  servant  or  employe  shall,  unless 
sooner  discharged  by  said  corporation,  remain  in 
its  employ  until  the  expiration  of  some  future  date 
designated  by  said  corporation,  or  under  any  simi- 
lar pretext  or  condition,  but  all  such  wages  shall 
be  paid  in  full  by  said  corporation  on  its  regular 
payday,  provided,  that  nothing  in  this  act  con- 
tained shall  be  held  to  abridge  the  right  of  any 
corporation  not  making  or  requiring  contracts  of 
the  class  specified  above  to  make  such  contract  or 
arrangement  as  may  be  legal,  concerning  the  pay- 
ment of  wages  to  employes  and  provided  further 
nothing  herein  contained  shall  be  construed  to  af- 
fect the  right  of  any  corporation  to  contract  for 
the  retention  of  a  part  of  the  wages  of  said  la- 
borer, servants  and  employes  for  the  purpose  of 
giving  said  servants,  laborers,  and  employes  in- 
surance, hospital,  sick  or  other  similar  relief. ' ' 
The  law  prohibits  only  the  withholding  of  wages 
earned  by  any  laborer,  etc.,  (1)  under  the  guise  or  pre- 
text that  the  wages  so  withheld  are  to  be  given  or  pre- 
sented as  a  present  or  gratuity,  at  the  expiration  of 


245 

any  future  date  on  condition  that  the  services  of  such 
laborer  have  been  performed  to  the  entire  satisfaction 
of  the  corporation,  or 

(2)  upon  condition  that  said  laborer  shall  unless 
sooner  discharged  remain  in  the  employ  of  the  corpora- 
tion until  the  expiration  of  some  future  date  designated 
by  the  corporation,  or 

(3)  upon  any  other  similar  pretext  or  condition. 

To  violate  the  law  the  corporation  must  withhold 
wages  earned,  under  a  guise  or  pretext.  If  the  wages 
are  earned  the  corporation  could  not  in  the  absence 
of  the  law  lawfully  withhold  them  unless  it  had  a  set- 
off  or  counterclaim  in  its  favor.  If  wages  earned  are 
withheld  under  a  guise  or  pretext  the  employer  would 
not  have  a  legal  defense  to  a  suit  by  such  employe  for 
the  wages.  If  the  wages  are  not  withheld  under  a 
guise  or  pretext  the  law  is  not  violated. 

Again,  the  guise  or  pretext  for  withholding  must  be 
that  the  wages  are  to  be  given  as  a  present  or  gratuity. 
If  the  money  so  given  is  in  fact  a  present  or  gratuity 
it  is  not  wages  earned.  If  it  is  wages  earned  it  is  not 
in  fact  a  present  or  gratuity.  To  violate  the  law  the 
wages  must  be  earned  and  withheld  under  the  pretext 
that  they  are  not  wages  earned  but  a  present  or  gratu- 
ity payable  on  condition. 

The  law  is  also  limited  to  cases  where  wages  with- 
held are  to  be  given  as  a  present  or  gratuity,  on  con- 
dition that  the  employes'  services  have  been  performed 
to  the  entire  satisfaction  of  the  corporation;  or  upon 
condition  that  the  laborer  shall,  unless  sooner  dis- 
charged, remain  in  the  employ  of  the  corporation 'until 
the  expiration  of  a  future  date  designated  by  the  cor- 
poration ;  or  upon  any  other  similar  condition. 

If  the  wages  are  withheld  under  a  guise  or  pretext 
that  they  are  to  be  given  as  a  present  upon  the  hap- 
pening of  any  condition  other  than  those  specified,  the 
law  does  not  apply. 

The  act  further  provides  that  "nothing  in  the  act 
contained  shall  be  held  to  abridge  the  right  of  any 
corporation  not  making  or  requiring  contracts  of  the 
class  specified  above,  to  make  such  contract  or  arrange- 


ment  as  may  be  legal,  concerning  the  payment  of  wages 
to  employes  *  *" 

The  effect  of  this  proviso  is  merely  to  state  that 
the  corporations  not  subject  to  the  operation  of  the 
law  are  not  prohibited  from  making  any  contract,  or 
arrangement  concerning  the  payment  of  wages  as  may 
be  legal.  Corporations  subject  to  the  law  are  not  pro- 
hibited in  section  one  from  making  contracts  concern- 
ing the  payment  of  wages.  No  reference  is  made  in 
any  other  portion  of  that  section  to  the  making  of 
such  contracts.  The  act  merely  prohibits  the  with- 
holding of  wages  earned  under  certain  guises  or  pre- 
texts and  not  the  making  of  contracts  concerning  the 
payment  of  such  wages. 

Section  2  of  the  act  provides : 

"That  all  contracts  or  agreements  of  the  kind 
and  character  referred  to  and  described  in  section 
1  of  this  act,  hereafter  made  by  any  corporation 
doing  business  in  this  state,  are  hereby  declared 
to  be  illegal,  against  public  policy  and  null  and 
void,  and  no  such  agreement  of  contract  shall  con- 
stitute a  defense  upon  the  part  of  any  such  cor- 
poration, to  any  action  brought  by  any  such 
laborer,  servant  or  employe  for  the  recovery  of 
any  wages  due  him,  and  withheld  from  him  by 
any  such  corporation,  contrary  to  the  provisions  of 
this  act." 

The  remaining  sections  of  the  act  refer  to  the  pen- 
alties for  violation,  etc.  No  contracts  or  agreements 
are  "referred  to  and  described  in  section  one  of  the 
act."  It  is  a  practical  impossibility  to  make  a  con- 
tract to  withhold  "wages  earned"  under  a  "guise  or 
pretext"  that  they  are  to  be  given  or  presented  as  a 
"present"  or  "gratuity"  upon  the  happening  of  a 
certain  condition.  A  contract  cannot  be  made  by  one 
person.  It  must  be  mutual  and  binding  on  both  par- 
ties. If  a  contract  is  made  to  withhold  certain  wages 
they  are  not  held  under  a  guise  or  pretext.  If  money 
is  to  be  given  as  a  bonus  or  gratuity  upon  certain  con- 
ditions it  is  not  withheld,  under  a  "guise  or  pretext." 


247 

The  making  of  such  contracts  is  only  prohibited  by 
section  one  by  implication. 

The  law  is  therefore  a  legislative  abortion.  It  pre- 
sents a  series  of  contraditions  and  it  is  in  effect  a 
legal  absurdity.  It  is  improbable  that  a  state  of  facts 
will  arise  to  which  the  law  can  constitutionally  apply. 

A  corporation  has  the  right  to  employ  labor  and  to 
enter  into  contracts  by  which  the  labor  may  be  em- 
ployed. Any  restriction  of  this  right  is  a  violation  of 
its  constitutional  privileges.  On  the  other  hand,  the 
employe  has  the  right  to  bestow  his  labor  in  the  man- 
ner as  to  him  shall  seem  most  beneficial  and  included 
in  this  right  is  the  liberty  to  enter  into  contracts  free 
from  legislative  restrictions. 

Employer  and  employe  have  the  right  to  enter  into 
a  contract,  providing  that  the  employe  shall  receive 
an  additional  bonus  compensation,  payable  on  a  cer- 
tain condition,  such  as  that  the  employe  shall  perform 
his  services  to  the  entire  satisfaction  of  the  employer, 
or  that  the  employe  shall  remain  employed  a  certain 
length  of  time. 

They  could  also  lawfully  agree  that  a  certain  amount 
or  per  cent,  of  the  wages  earned  by  the  employe  shall 
be  payable  in  the  future  only  upon  a  certain  condition, 
provided  that  the  amount  retained  does  not  in  fact  con- 
stitute a  forfeiture  for  the  breach  of  a  contract. 

The  law,  if  so  construed  as  to  prohibit  the  making 
of  any  contract  concerning  the  mode  or  time  of  pay- 
ing wages,  is  in  my  opinion  an  interference  with  the 
liberty  of  contract,  and  is  unconstitutional  and  void. 


THE  CONSTITUTIONALITY  OF  THE  FOREIGN  CORPORATION 
LAW  OF  MASSACHUSETTS  WHICH  IMPOSES  A  TAX  UPON 
THE  ENTIRE  CAPITAL  STOCK  OF  THE  FOREIGN  CORPORA- 
TION. 

(N.  K.  Fairbank  Company,  October  24,  1903.) 

"Foreign  corporations  doing  business  in  Massa- 
chusetts.   Under  chapter  437  of  the  acts  of  1903, 


248 

being  an  act  relative  business  corporations,  which 
went  into  effect  August  1st,  1903,  certain  changes 
were  made  in  the  laws  affecting  foreign  corpora- 
tions, of  which  you  have  perhaps  been  advised 
by  circulars  from  the  commissioner  of  corpora- 
tions, Boston.  The  new  law  requires  foreign  cor- 
porations, in  addition  to  copies  of  the  by-laws  and 
articles  of  corporation,  to  file  an  annual  certificate 
of  condition,  very  detailed  as  to  assets  and  liabili- 
ties. This  certificate  is  to  be  signed  and  sworn  to 
by  its  president,  treasurer  and  majority  of  its 
board  of  directors.  There  is  also  assessed  upon 
foreign  corporations  an  excise  tax  of  1-100  of  1  per 
cent,  of  the  par  value  of  their  authorized  stock, 
from  which  may  be  deducted,  however,  the  amount 
of  taxes  paid  by  the  corporations  to  any  city  or 
town  in  the  commonwealth  during  the  preceding 
year.  The  amount  of  such  tax  shall  not  exceed 
the  sum  of  $1,000. 

We  have  been  advised  by  our  counsel  that  it 
will  be  necessary  to  comply  with  the  requirements 
of  the  law  as  mentioned.  Please  let  us  know 
what  other  Illinois  corporations,  doing  business 
in  Massachusetts  (that  is  to  say,  having  perma- 
nent offices  and  carrying  stocks  of  merchandise 
there)  have  decided  to  do  in  view  of  the  above 
law. 

It  seems  to  us  that  the  tax  is  unjust  because 
unequal.  A  corporation,  for  example,  of  $5,000,- 
000  capital  would  be  taxed  $500  though  it  might 
employ  5  per  cent,  of  its  capital  in  the  State  of 
Massachusetts.  Another  corporation  of  the  same 
capital  might  employ  50  per  cent  of  its  capital  in 
Massachusetts  but  would  be  also  taxed  $500.  It 
seems  to  us  that  any  tax  on  foreign  corporations 
is  unfair  that  does  not  have  regard  to  the  pro- 
portion of  capital  stock  employed  by  such  corpo- 
rations respectively  in  Massachusetts.  We  would 
like  to  know,  therefore,  what  other  corporations 
have  decided  to  do  in  this  connection,  if  you  are 
able  to  inform  us." 


The  State  of  Massachusetts  has  the  right  to  pro- 
hibit foreign  corporations  not  engaged  in  interstate 
commerce  from  doing  business  therein.  It  has  the 
right  to  fix  the  terms  upon  which  it  will  permit  for- 
eign corporations  to  enter  the  state  and  transact  local 
business  there.  These  terms  may  be  altogether  unrea- 
sonable or  even  arbitrary,  provided  they  are  uniform 
and  apply  alike  to  all  foreign  corporations  of  the  same 
class. 

In  my  opinion  the  state  has  the  right  to  impose  a 
tax  upon  the  whole  of  the  capital  stock  of  a  foreign 
corporation  as  a  condition  of  its  doing  business  in  the 
state,  irrespective  of  what  proportion  of  the  capital  of 
such  corporation  is  represented  or  employed  in  the 
state.  I  advise,  therefore,  that  all  foreign  corpora- 
tions who  are  doing  business  in  Massachusetts  comply 
with  the  law. 

I  do  not  pass  upon  the  question  of  whether  or  not 
the  Fairbank  Company  is  doing  business  in  Massa- 
chusetts. 


WHETHER  THE  MAINTENANCE  OF  A  TRANSFER  HOUSE  IN  A 
FOREIGN  STATE  SUBJECTS  A  CORPORATION  TO  THE  FOREIGN 
CORPORATION  LAWS  OF  THAT  STATE. 

(Deere  &  Co.,  October  24,  1903.) 
"What  we  would  like  to  know  particularly  is 
this:  Whether  the  keeping  of  goods  at  transfer 
points,  to  be  delivered  on  sales  made  by  traveling 
salesmen,  under  contracts  made  by  them,  which 
contracts  are  made  outside  of  the  state,  is  consid- 
ered to  be  doing  business  in  the  state. 

For  instance,  one  of  our  traveling  men  visits 
Youngstown,  in  Ohio,  and  makes  a  contract  with 
the  agent  there  for  our  goods.  He  sends  that  con- 
tract to  us  for  our  signature.  We  sign  the  contract 
and  file  it  away.  He  orders  ten  plows  on  this 
contract,  and  we  ship  these  plows  from  Columbus, 
Ohio,  where  a  storage  company  is  carrying  a 
quantity  of  goods  for  us  for  that  purpose.  Would 


250 

this  be  considered  doing  business  in  that  state 
under  its  established  meaning?" 

A  corporation  is  "doing  business"  in  a  state  and 
is  subject  to  the  laws  regulating  foreign  corporations 
unless  its  transactions  within  that  state  are  protected 
by  the  commerce  clause  of  the  Constitution  which  gives 
to  Congress  the  exclusive  right  to  regulate  commerce 
between  the  states. 

"Commerce"  in  a  general  sense  means  an  inter- 
change of  goods,  wares,  merchandise  or  property  of 
any  kind  between  nations  or  individuals,  either  by 
barter  or  purchase  and  sale.  "Interstate  commerce," 
or  commerce  among  the  several  states  of  the  United 
States,  is  commerce  which  concerns  more  states  than 
one.  It  consists  in  intercourse  and  traffic  and  includes 
navigation  and  transportation  of  persons  and  prop- 
erty as  well  as  the  purchase,  sale  and  exchange  of 
commodities. 

Whenever  an  article  of  commerce  has  begun  to  move 
from  one  state  to  another,  the  .protection  of  the  Con- 
stitution against  state  regulation  or  taxation  attaches. 
That  protection  continues  throughout  the  transporta- 
tion and  until  the  goods  have  arrived  at  their  destina- 
tion. As  I  have  stated  in  my  opinion  of  this  date  to 
Montgomery  Ward  &  Co.,  the  commerce  clause  also 
protects  the  sales  of  the  importer  in  the  original  pack- 
age. 

Where  does  the  protection  of  the  commerce  clause 
cease? 

In  Brown  v.  Maryland,  12  Wheat.,  419,  441,  tfre 
United  States  Supreme  Court,  by  Chief  Justice  Mar- 
shall, answered  this  question  as  follows : 

"It  is  sufficient  for  the  present  to  say,  generally, 
that  when  the  importer  has  so  acted  upon  the 
thing  imported,  that  it  has  become  incorporated 
and  mixed  up  with  the  mass  of  property  in  the 
country,  it  has,  perhaps,  lost  its  distinctive  char- 
acter as  an  import." 

When  does  this  incorporation  take  place? 

In  Brown  v.  Maryland,  supra,  it  is  said  that  domestic 
and  interstate  commerce, 


251 

"though  quite  distinguishable  when  they  do  not 
approach  each  other,  may  yet,  like  the  intervening 
colors  between  black  and  white,  approach  so  nearly 
as  to  perplex  the  understanding  as  colors  per- 
plex the  vision  in  marking  the  distinction  between 
them." 

And  in  Welton  v.  Missouri,  91  U.  S.,  275,  Mr.  Justice 
Field,  delivering  the  opinion  of  the  court,  said: 

4 '  There  is  a  difficulty,  it  is  true,  in  all  cases  of 
this  character  in  drawing  the  lines  precisely  where 
the  commercial  power  of  Congress  ends  and  the 
power  of  the  states  begins. ' ' 

It  is,  therefore,  difficult  to  determine  where  the  juris- 
diction of  Congress  ceases,  and  the  power  of  the  states 
begins.  It  is  well  settled  that  the  sale  of  the  im- 
ported article  destroys  its  character  as  an  import  and 
mingles  the  article  with  the  mass  of  property  of  the 
state,  so  as  to  subject  it  to  state  control.  So  also 
an  import  becomes  mingled  with  the  mass  when  the 
original  package  in  which  it  was  imported  is  opened 
or  broken. 

Whether  or  not  an  import  can  become  subject  to  the 
jurisdiction  of  state  laws  by  any  other  act  than  the 
breaking  of  the  original  package,  or  by  a  sale  by  the 
importer,  is  a  more  difficult  question  and  one  upon 
which  the  authorities  are  in  conflict.  The  question  has 
not  yet  been  squarely  decided  by  the  United  States 
Supreme  Court. 

In  In  re  Minor,  82  Fed.,  472,  it  is  held  that  when 
goods  have  arrived  at  their  final  destination  and  are 
exposed  for  sale  or  use,  they  become  part  of  the  mass 
of  the  property  of  the  state,  even  though  they  remain 
in  the  original  package. 

In  Brown  v.  Houston,  114  U.  S.,  622,  623,  the  Su- 
preme Court  said  of  a  tax  imposed  upon  a  certain  lot 
of  coal  shipped  from  Pennsylvania  and  still  in  the 
boats  in  which  it  was  shipped  and  still  owned  by  the 
parties  in  the  state  from  which  it  is  shipped: 

"It  was  imposed  after  the  coal  had  arrived  at 
its  destination  and  was  put  up  for  sale.  The  coal 
had  come  to  its  place  of  rest,  for  final  disposal  or 


252 

use,  and  was  a  commodity  in  the  market  of  New 
Orleans.  It  might  continue  in  that  condition  for 
a  year  or  two  years,  or  only  for  a  day.  It  had 
become  a  part  of  the  general  mass  of  property  in 
the  state." 

And  in  Bobbins  v.  Shelby  Co.  Taxing  District,  120  U. 
S.,  489,  497,  the  Supreme  Court  said : 

"As  soon  as  the  goods  are  in  the  State  and  be- 
come part  of  its  general  mass  of  property,  they 
will  become  liable  to  be  taxed  in  the  same  manner 
as  other  property  of  similar  character,  as  was  dis- 
tinctly held  by  this  court  in  the  case  of  Brown  v. 
Houston,  114  U.  S.,  622.  When  the  goods  are  sent 
from  one  state  to  another  for  sale,  or,  in  conse- 
quence of  a  sale,  they  become  part  of  its  general 
property,  and  amenable  to  its  laws ;  provided  that 
no  discrimination  be  made  against  them  as  goods 
from  another  state,  and  that  they  be  not  taxed 
by  reason  of  being  brought  from  another  state, 
but  only  taxed  in  the  usual  way  as  other  goods 
are." 
See  also : 

17  Ency.  of  Law  (2nd  Ed.),  p.  71. 

Prentice  &  Egan  on  Commerce  Clause,  pp.  64 

et  seq. 
American  Harrow   Co.  v.   Shaffer,  68   Fed., 

750. 

May  v.  New  Orleans,  178  U.  S.,  496. 
Moore  v.  Bohr,  82  Fed.,  19. 
Coal  Co.  v.  Bates,  156  U.  S.,  577. 
Price  v.  City,  31  S.  E.,  619  (Ga.). 
While  the  question  is  not  entirely  free  from  doubt, 
I  am  of  the  opinion  that  a  corporation  which  main- 
tains a  "transfer  house"  in  a  foreign  state,  and  there 
keeps  a  stock  of  goods  which  it  delivers  to  its  customers 
upon  orders  which  may  thereafter  be  received  is  not 
engaged  in  interstate  commerce,  but  is  doing  business 
in  that  state  and  is  subject  to  the  foreign  corporation 
laws  thereof. 


253 


WHETHER  A  FOREIGN  CORPORATION  CAN  BE  COMPELLED  TO 
PAY  A  LICENSE  FEE  FOR  THE  SALE  OF  SEWING  MACHINES 
IN  NORTH  CAROLINA  WHERE  THE  TITLE  TO  THE  MACHINE 
DOES  NOT  PASS  UNTIL  DELIVERY. 

(Montgomery  Ward  &  Co.,  October  26,  1903.) 

"We  would  like  to  know  from  the  Association's 
counsel  whether  or  not  we  are  legally  bound  to 
take  out  a  license  to  sell  sewing  machines  in  North 
Carolina ;  and  below  we  give  you  the  circumstances 
that  the  state  treasurer  of  North  Carolina  relies 
upon  in  making  his  claim  that  we  are  amenable 
to  the  license  laws  of  his  state  relative  to  the  sale 
of  sewing  machines : 

On  June  16th  we  made  shipment  of  a  sewing 
machine  and  consigned  the  same  to  Montgomery 
Ward  &  Co.,  at  Troy,  Montgomery  county,  North 
Carolina.  We  drew  on  the  purchaser  of  this  ma- 
chine for  the  purchase  price,  making  the  draft 
payable  at  the  Bank  of  Montgomery,  of  Troy,  and 
attached  to  the  draft  the  bill  of  lading  of  the  rail- 
road company,  which,  upon  payment  of  the  draft 
would  be  endorsed  by  the  bank  to  the  purchaser. 
The  purchaser  upon  presenting  the  bill  of  lading 
at  the  railroad  station  would  then  show  his  title 
to  the  sewing  machine,  and  upon  payment  of  the 
transportation  charges  on  the  same  from  Chicago 
to  Troy  would  obtain  possession;  in  other  words, 
this  method  of  handling  the  sale  made  it  C.  0.  D. 
shipment. 

The  consignment  arrived  at  Troy,  but  was  seized 
by  the  sheriff  of  Montgomery  county,  who  claims 
that  we  are  violating  the  license  laws  of  his 
state  by  failing  to  take  out  a  sewing  machine 
agent's  license  before  attempting  to  sell  machines 
in  North  Carolina,  the  claim  being  made  by  the 
state's  treasurer,  who  directed  the  sheriff  to  seize 
the  machine,  that  the  transaction  took  place  with- 
in the  borders  of  that  state;  that  is,  by  consign- 
ing the  goods  to  ourselves  and  collecting  the  money 


254 

through  a  local  bank  and  the  transferring  the  bill 
of  lading  there,  we  were  conducting  the  sale 
within  North  Carolina,  and  therefore  selling  sew- 
ing machines  within  that  state  contrary  to  its 
license  laws. 

On  the  31st  of  August  the  sheriff  of  Montgomery 
county  sold  the  machine,  under  instructions  from 
the  state  treasurer,  and  the  same  was  delivered 
to  the  highest  bidder,  as  we  are  informed  by  the 
sheriff. 

The  position  we  take  in  this  case  is  as  follows : 
The  sale  was  made  in  Chicago,  inasmuch  as  all 
our  quotations  are  made  delivered  at  Chicago,  or 
at  our  warehouse  or  factories  when  they  are  spe- 
cially stipulated,  and  the  customer  pays  the  trans- 
portation charges  to  his  station.  Under  our  views, 
the  action  of  North  Carolina  authorities  is  in  vio- 

Does  the  fact  that  we  consigned  the  goods  to 
ourselves,  drew  on  the  customer  through  his  local 
lation  of  the  interstate  commerce  laws, 
bank,  and  authorized  the  bank  to  consign  the  bill 
of  lading,  bring  us  within  the  laws  of  North  Caro- 
lina so  as  to  compel  us  to  pay  license  fee? 

We  attach  herewith  the  correspondence  between 
the  state  authorities  and  ourselves,  and  would  ask 
that  the  same  be  returned  to  us.  The  state  treas- 
urer also  refers  to  a  case  in  point  that  we  would 
direct  the  counsel's  attention  to  in  the  paper 
attached. 

Trusting  we  may  have  an  early  reply,  as  we 
anticipate  more  trouble  of  this  sort  until  the  mat- 
ter is  settled  one  way  or  the  other  we  are. ' ' 
The  act  of  the  legislature  of  North  Carolina  is  en- 
titled "An  act  to  raise  revenue." 
It  provides : 

"Section  32.  Taxes  in  this  section  shall  be  im- 
posed as  license  tax  for  the  privilege  of  carrying 
on  the  business  or  doing  the  act  named. 

Section  51.  Every  manufacturer  of  sewing  ma- 
chines and  every  person  or  persons  or  corpora- 
tion, engaged  in  the  business  in  the  selling  the 


255 

same  in  this  state,  shall,  before  selling  or  offering 
for  sale  any  machine,  pay  to  the  state  treasurer  a 
tax  of  $350  and  obtain  a  license. ' ' 
The  tax  is,  therefore,  imposed  as  a  license  tax  upon 
the  business  of  selling  sewing  machines.      The  ques- 
tion as  to  the  validity  of  the  tax  was  decided  by  the 
Supreme  Court  of  North  Carolina  in  Sims  v.  Norfolk 
&  W.  R.  Co.,  (41  S.  E.,  673).    The  Court  said: 

"By  the  'facts  agreed'  in  this  case,  it  appears 
that  Sears,  Boebuck  &  Co.,  of  Chicago,  have  not 
paid  said  tax,  nor  obtained  a  license,  and  that 
prior  to  this  transaction  they  had  made  several 
deliveries  at  various  points  in  North  Carolina  on 
the  lines  of  other  interstate  railroads  running 
into  this  state,  and  that  all  these  shipments,  like 
the  one  here  in  question,  were  made  on  bills  of 
lading,  providing  that  the  sewing  machine  should 
not  be  delivered  till  it  was  paid  for  by  the  per- 
son named  as  consignee.  Thus  the  title  could  not 
pass  till  such  payment  was  made  to  the  common 
carrier,  acting  as  agent  of  the  shipper.  This 
was  an  executory  contract  in  Illinois,  but  there 
was  no  sale  till  the  payment  was  made,  and  thus 
the  sale  was  executed  in  North  Carolina  and  the 
shippers  are  liable  to  the  above  tax.  The  title 
to  this  machine  having  remained  in  the  shipper 
until  such  payment  (Tied,  Sales,  Sees.  95,  97),  the 
machine  was  properly  levied  on  before  such  pay- 
ment for  the  license  tax  due  by  the  shippers  (Laws 
1901,  Ch.  9,  Sec.  101,  last  paragraph  of  section). 
The  well-known  case  of  O'Neil  v.  Vermont,  144  IT. 
S.,  324,  12  Sup.  Ct.,  693,  36  L.  Ed.,  450,  is  de- 
cisive of  the  point.  There,  in  the  shipment  of 
liquor  from  New  York  into  Vermont  C.  0.  D.  it 
was  held  that  the  completed  executory  contract 
was  in  New  York,  but  the  completed  sale  was  in 
Vermont,  as  here,  Ober  v.  Smith,  78  N.  C.,  313, 
and  State  v.  Groves,  121  N.  C.,  632,  28  S.  E.,  262, 
relied  on  by  defendants  were  cases  of  an  uncon- 
ditional delivery  to  the  common  carrier  and,  of 
course,  the  title  passed  to  the  consignee  upon  de- 


256 

livery  to  the  carrier.  State  v.  Wernwag.  116  N. 
C.,  1061,  21  S.  E.,  683,  28  L.  B.  A.,  297/47  Am. 
St.  Bep.,  873,  is  much  like  the  present  case." 

The  Courts  relied  on  O'Neil  v.  Vermont,  144  U.  S., 
324.  That  case  related  to  the  C.  0.  D.  sale  of  intoxi- 
cating liquors  and  was  decided  subsequent  to  the  pas- 
sage of  the  Wilson  act,  which  provides  that  intoxicat- 
ing liquors  upon  their  arrival  in  a  state  or  territory, 
shall  be  subject  to  the  operation  of  the  state  laws. 
This  rule  applies  exclusively  to  intoxicating  liquors. 

The  objection  that  the  tax  in  question  was  a  regu- 
lation of  interstate  commerce  was  not  raised  nor 
passed  upon  by  the  North  Carolina  court.  I  will, 
passed  upon  by  the  North  Carolina  court.  I  will,  there- 
fore, confine  this  opinion  to  the  question  of  whether 
or  not  the  law  above  quoted  constitutes  a  regu- 
lation of  commerce  contrary  to  the  Commerce  Clause 
of  the  Constitution,  which  gives  to  "Congress  the  ex- 
clusive right  of  regulation.  The  decisions  of  the 
United  States  Supreme  Court  and  other  courts  have 
been  far  from  uniform.  The  differences  of  opinion 
have  not  been  so  much  upon  fundamental  principles 
as  upon  the  application  of  these  principles  to  precise 
cases  under  particular  state  statutes.  It  is,  therefore, 
impossible  to  lay  down  an  arbitrary  rule  as  to  where 
the  line  dividing  interstate  commerce  from  that  which 
is  purely  domestic  is  located.  On  account  of  the  im- 
portance of  the  question,  even  aside  from  the  par- 
ticular facts,  I  have  given  it  careful  and  extended 
consideration.  Inasmuch  as  the  Supreme  Court  of 
the  United  States  is  the  ultimate  authority  on  ques- 
tions of  this  character  I  have  made  no  reference  to 
the  numerous  and  conflicting  state  court  decisions. 

The  question  to  be  determined  is  whether  or  not 
the  protection  of  the  Commerce  Clause  of  the  Con- 
stitution extends  to  the  sale  by  the  importer  after  the 
goods  have  arrived  in  the  state  into  which  they  have 
been  transported. 

In  Brown  v.  Maryland,  12  Wheat.,  419,  447,  it  was 
stated  that  the  power  to  regulate  commerce  could  not 
be  stopped  at  the  external  boundary  of  a  state,  but 


257 

must  enter  its  interior.    The  Court  held  that  the  right 
to  import  included  the  right  to  sell,  and  said : 

"To  what  purpose  should  the  power  to  allow- 
ing importation  be  given,  unaccompanied  with  the 
power  to  authorize  a  sale  of  the  thing  imported? 
Sale  is  the  object  of  importation,  and  is  an  es- 
sential ingredient   of  that  intercourse   of  which 
importation  constitutes  a  part.    It  is  as  essential 
an  ingredient,  as  indispensable  to  the  existence 
of  the  entire  thing,  then  as  importation  itself.    It 
must  be  considered  as  a  component  part  of  the 
right    to    regulate    commerce.      Congress    has    a 
right,  not  only  to  authorize  importation,  but  td 
authorize  the  importer  to  sell." 
The  Court  further  held  that  the  power  of  the  state 
to  tax  commences  when  the  importer  has  so  acted  upon 
it  that  it  has  become  incorporated  and  mixed  up  with 
the  mass  of  property  in  the  state,  which  happens  when 
the  original  package  is  no  longer  such  in  his  hands. 

In  Leisy  v.  Hardin,  135  U.  S.,  100,  it  was  held  that 
a  state  statute  prohibiting  the  sale  of  intoxicating 
liquors,  as  applied  to  a  sale  by  the  importer  in  the 
original  packages,  or  kegs,  unbroken  or  unopened, 
of  such  liquors  manufactured  in  and  brought  from 
another  state  was  unconstitutional. 

To  the  same  effect  that  the  commerce  clause  pro- 
tects the  sale  of  an  imported  article  in  the  original 
package.  See : 

Schollenberger  v.  Penn,  171  U.  S.,  1. 
Vance  v.  Vandercook,  170  U.  S.,  438. 
Gale  v.  Finkelstein,  54  S.  W.,  619  (Tex.). 
Miller  v.  Goodman,  40  S.  W.,  718;  91  Tex.,  42. 
Prentice  &  Egan  on  Commerce  Clause  of  Con- 
stitution, pp.  274,  275,  279. 

The  sale  must,  however,  be  made  in  the  original 
package.  Any  breaking  of  such  package  will  cause 
the  property  to  become  incorporated  in  the  mass  of 
property  in  the  state  and  subject  to  the  state  laws. 
An  original  package  in  general  terms  is  defined  to  be 
"the  unbroken  package  in  the  condition  in  which  it  is 
received  by  the  carrier." 


258 

Prentice  &  Egan  on  Commerce  Clause,  p.  82. 
And  the  right  of  the  importer  to  sell  may  be  exer- 
cised through  the  medium  of  a  salesman  in  the  state 
to  where  the  goods  are  sent. 

If  the  goods  are  consigned  to  the  order  of  the  con- 
signor and  are  delivered  by  an  agent,  or  are  con- 
signed to  such  agent,  or  are  delivered  to  a  carrier  or 
express  company  who  collects  the  charges,  this  con- 
stitutes interstate  commerce,  and  the  state  can  not 
require  a  license  from  the  vendor  or  his  agent  for  the 
privilege  of  selling  or  delivering. 

Brennan  v.  TitusvUle,  153  U.  S.,  289. 
Caldwell  v.  South  Carolina,  187  U.  S.,  622. 
The  state  has  the  right  to  impose  license  taxes  upon 
occupations   such   as   peddlers,    auctioneers,    etc.     In 
Brown  v.  Maryland,  supra,  the  Court  said : 

/    "Auctioneers  are  persons  licensed  by  the  state, 

and  if  the  importer  chooses  to  employ  them,  he 

can  as  little  object  to  paying  for  this  service,  as 

for  any  other  for  which  he  may  apply  to  an  officer 

of  the  state.    The  right  of  sale  may  very  well  be 

annexed  to  importation,  without  annexing  to  it, 

also,  the  privilege  of  using  the  officers  licensed  by 

the  state  to  make  sales  in  a  peculiar  way." 

In  Emert  v.  Missouri,  156  U.  S.,  296,  the  validity 

of  a  state  law  taxing  sales  of  goods  by  peddlers  was 

assailed.     The  Court  said: 

"The  statute  in  question  is  not  part  of  a  reve- 
nue law.  It  makes  no  discrimination  between 
residents  or  products  of  Missouri  and  those  of 
other  states ;  and  manifests  no  intention  to  inter- 
fere, in  any  way,  with  interstate  commerce.  Its 
object,  in  requiring  peddlers  to  take  out  and  pay 
for  licenses,  on  demand,  to  any  peace  officer,  or  to 
any  citizen  householder  of  the  county,  appears  to 
have  been  to  protect  the  citizens  of  the  state 
against  the  cheats  and  frauds,  or  even  thefts, 
which,  as  the  experience  of  ages  has  shown,  are 
likely  to  attend  itinerant  and  irresponsible  ped- 
dling from  place  to  place  and  from  door  to  door." 
And  the  statute  was  upheld. 


259 

Such  statutes,  however,  must  not  discriminate 
against  the  products  of  other  states.  The  commerce 
clause  protects  property  imported  from  other  states 
against  discrimination  by  reason  of  its  foreign  origin, 
even  after  it  has  become  incorporated  in  the  general 
mass  of  property  in  the  state. 

Walling  v.  Michigan,  116  U.  S.,  446. 
Schollenberger  v.  Penn,  171  U.  S.,  1. 
Woodruff  v.  Parham,  8  Wall,  123. 
Welton  v.  Missouri,  91  U.  S.,  275. 
Ficklen  v.  Shelby  County,  145  U.  S.,  1. 
Nor  can  such   occupation  tax  be  based  upon  the 
amount  of  the  sales  as  applied  to  sales  for  non-resident 
principals. 

Cook  v.  Penn,  97  U.  S.,  666. 

The  state,  however,  can  only  tax  ordinary  occupa- 
tions which  are  usually  subject  to  tax.  It  can  not  tax 
business  occupations  where  it  can  not  tax  the  business. 

Leloup  v.  Mobile,  127  U.  S.,  640. 

Nor  can  it  tax  a  person  or  persons  representing  non- 
residents solely,  in  the  solicitation  of  orders,  etc. 

Sockard  v.  Morgan,  185  U.  S.,  27. 
A  tax  on  a  vocation  is  held  to  be  a  tax  on  the  ar- 
ticle.    In  Brown  v.  Maryland,  supra,  where  a  license 
on  importer  was  held  void,  it  was  argued  that  the  tax 
was  not  upon  the  article,  but  upon  the  person  and 
that  the  state  could  tax  occupations.    The  court  said: 
"It  is   impossible   to   conceal   from   ourselves, 
that  this  is  varying  the  form,  without  varying  the 
substance.     It  is  treating  a  prohibition  which  is 
general,  as  if  it  were  confined  to  a  particular  mode 
of  doing  the  forbidden  thing.     All  must  perceive 
that  the  tax  on  the  sale  of  the  article,  imported 
only  for  sale,  is  a  tax  on  the  article  itself." 
To  the  same  effect  see : 

Brennan  v.  Titusville,  153  U.  S.,  303. 
Welton  v.  Missouri,  91  U.  S.,  275. 
Leloup  v.  Mobile,  127  U.  S.,  640. 
In  Vol.  17,  Encyclopedia  of  Law  (2nd  Ed.),  p.  121, 
it  is  said: 

"A  state  may  impose  a  uniform  tax  on  all  sales 


260 

made  in  it,  whether  such  sales  be  made  by  one  of 

its  own  citizens  or  the  citizens  of  another  state, 

and  whether  the  goods  sold  are  the  produce  of 

the  state  imposing  the  tax,  or  of  some  other  state." 

The  editor  in  support  of  his  text  relies  on  the  cases 

of  Woodruff  v.  Parham,  8  Wall.,  123,  and  Howe  v. 

Gage,  100  U.  S.,  676. 

In  Woodruff  v.  Parham,  8  Wall.,  123,  the  city  of 
Mobile,  Ala.,  levied  a  tax  on  "sales  at  auction  and 
sales  of  merchandise,"  etc.  Woodruff  and  other  auc- 
tioneers received  in  the  course  of  their  business  for 
themselves  or  as  consignees  and  agents  for  others, 
large  amounts  of  goods  and  merchandise,  the  products 
of  states  other  than  Alabama,  and  sold  the  same  in 
Mobile  to  purchasers  in  the  original  and  unbroken 
packages.  The  court  said: 

"The  case  before  is  a  simple  tax  on  sales  of 
merchandise  imposed  alike  upon  all  sales  made  in 
Mobile,  whether  the  sales  be  made  by  a  citizen  of 
Alabama  or  of  another  state,  and  whether  the 
goods  sold  are  the  produce  of  that  state  or  some- 
other.  There  is  no  attempt  to  discriminate  in- 
juriously against  the  products  of  other  states  or 
the  rights  of  their  citizens,  and  the  case  is  not, 
therefore,  an  attempt  to  fetter  commerce  among 
the  states,  or  to  deprive  the  citizens  of  other- 
states  of  any  privilege  or  immunity  possessed  by 
citizens  of  Alabama.  But  a  law  having  such 
operations  would,  in  our  opinion,  be  an  infringe- 
ment of  the  provisions  of  the  Constitution  which 
relate  to  those  subjects,  and  therefore  void." 
In  Machine  Co.  v.  Gage,  100  U.  S.,  676,  a  state  law 
imposing  an  annual  license  upon  all  "peddlers"  of 
sewing  machines  and  selling  by  sample  was  upheld. 

Both  of  these  cases  can  probably  be  justified  under 
the  power  of  the  state  to  levy  a  license  tax  upon  voca- 
tions. And  in  the  later  case  of  Emert  v.  Missouri,  156 
U.  S.,  296,  they  are  so  classified. 

In  17  Encyclopedia  of  Law  (2nd  Ed.),  p.  67,  it  is 
said: 

"The  selling  in  one  state  of  goods  manufac- 


261 

tured  in  another  state  and  shipped  into  the  former 
state  is  interstate  commerce,  so  far  as  the  im- 
porter is  concerned,  whether  the  goods  are  sold 
before  or  after  they  are  shipped  into  the  state. 
A  distinction  has  been  drawn,  however,  between 
the  principal  and  that  of  the  agent.      It  is  said 
that  while  the  sale  at  its  destination  of  an  article 
which  has  been  sent  from  another  state  may  be 
regarded  as  an  interstate  sale,  and  one  which  the 
importer  was  entitled  to  make,  yet  the  services 
of  the  individual  employed  at  the  place  where  the 
article  is  sold  are  not  so  connected  with  the  sub- 
ject sold  as  to  make  the  business  of  the  person 
so  employed  a  portion  of  interstate  commerce.    It 
is  difficult  to  reconcile  this  distinction,  however, 
with  the  decisions  holding  that  the  right  to  sell 
includes  the  right  to  sell  by  an  agent." 
The  importer  has  the  right  to  employ  an  agent  in 
the  state  to  make  his  sales  if  he  sells  in  a  peculiar 
way — that  is,  through  the  medium  of  a  person  such 
as  an  itinerant  peddler  or  an  auctioneer,  whose  voca- 
tion the  state  has  a  right  to  tax  or  license.    The  tax- 
ing or  licensing  of  the  vocation  will  not  be  consid- 
ered as  an  interference  with  interstate  commerce. 

The  state  has  the  right  to  tax  property  imported 
from  other  states  mingled  with  and  forming  part  of 
the  mass  of  property  therein  by  a  general  property 
tax,  provided  such  tax  is  laid  alike  upon  all  persons 
and  there  is  no  discrimination  against  the  imported 
goods. 

Brown  v.  Houston,  114  U.  S.,  622. 
Coe  v.  Errol,  116  U.  S.,  517. 
Leloup  v.  Mobile,  127  U.  S.,  640. 
The  only  way  in  which  commerce  between  the  states 
can  be  legitimately  affected  by  state  laws  is  when,  by 
virtue  of  its  police  powers  and  its  jurisdiction  over 
persons  and  property  within  its  limits,  a  state  pro- 
vides for  the  security  of  the  lives,  limbs,  health  and 
comfort  of   persons  and  the  protection  of    property; 
or  when  it  does  those  things  which  may  incidentally 
affect  commerce,  such  as  the  establishment  and  regu- 


262 

lations  of  highways,  canals,  railroads,  wharves,  fer- 
ries and  other  commercial  facilities;  the  passage  of 
inspection  laws  to  secure  the  due  quality  and  measure 
of  products  and  commodities,  and  the  passage  of  laws 
to  regulate  or  restrict  the  sale  of  articles  deemed  in- 
jurious to  the  health  or  morals  of  the  community. 
Robbins  v.  Shelby  Tax  Dis.,  120  U.  S.,  489. 

Inasmuch  as  the  license  tax  imposed  by  the  legis- 
lature of  North  Carolina  is  for  general  revenue  pur- 
poses and  there  is  no  provision  in  the  law  for  any 
supervision,  control  or  regulation  of  any  business,  it 
can  not  be  justified  under  the  police  power. 

Brennan  v.  Titusville,  153  U.  S.,  289. 

Nor  does  it  purport  to  be  an  inspection  law,  nor 
one  to  regulate  the  sale  of  injurious  articles. 

In  the  present  case,  Montgomery  Ward  &  Co.  are 
not  in  person  engaged  in  North  Carolina  "in  the  busi- 
ness of  selling"  sewing  machines,  nor  have  they  in 
that  state  any  agent  who  is  so  engaged.  Therefore 
the  law  does  not  legally  reach  them. 

The  tax  in  question  can  only  be  considered  as  a  tax 
on  the  business  of  selling  sewing  machines.  The  ex- 
action of  a  license  tax  as  a  condition  of  doing  a  par- 
ticular business  is  a  tax  on  the  occupation.  The  tax 
can  not  be  upheld  as  an  occupation  tax  for  the  rea- 
son that  Montgomery  Ward  &  Co.  do  not  sell  through 
the  medium  of  any  agency  which  the  state  has  the 
right  to  tax,  nor  is  the  law  one  that  attempts  to  regu- 
late selling  agents,  etc.  The  tax  can  not  be  justified 
as  a  general  tax,  as  it  is  not  levied  on  the  machine 
in  common  with  all  other  property,  as  a  part  of  the 
common  mass  of  property  of  the  state.  As  I  have 
heretofore  stated,  property  becomes  mingled  with  the 
common  mass  when  sold  or  used  within  the  state.  The 
present  tax  intercepts  the  import  on  its  way  to  be- 
come so  mingled  and  denies  it  that  privilege  without 
the  payment  of  a  license  tax.  The  tax  is  not  one  in- 
directly affecting  interstate  commerce.  It  is  a  di- 
rect interference  with  such  commerce.  The  authori- 
ties are  unanimous  to  effect  that  interstate  commerce 
can  not  be  taxed  in  any  form.  The  sale  of  an  im- 


ported  article  in  the  original  package  is  as  much  in- 
terstate commerce  as  the  transportation  of  that  ar- 
ticle. If  it  be  held  that  the  law  under  consideration 
applies  to  the  facts  in  the  present  case,  it  is,  in  my 
opinion,  unconstitutional,  notwithstanding  the  con- 
trary decision  of  the  Supreme  Court  of  North  Caro- 
lina. 


NOTE: — The  United  States  Supreme  Court  subsequently  held  in  De- 
cember, 1903,  that  a  transaction  similar  to  that  above  stated  under  the 
North  Carolina  law  was  interstate  commerce  and  not  subject  to  the 
North  Carolina  act.  Norfolk  #  W.  E.  Co.  v.  Sims,  191  U.  S.,  441. 
(Dec.  7,  1903.)  See,  also,  the  opinion  of  Sept.  29,  1905,  for  the  Illinois 
Sewing  Machine  Co.  relative  to  a  similar  Virginia  statute  and  the  fol- 
lowing cases:  Caldicell  v.  North  Carolina,  187  U.  S.,  622;  Henderson 
v.  Ortte,  38  So.,  440  (La.  1905)  ;  Commonwealth  v.  Baldwin.,  96  S.  W., 
914  (Ky.  1906).— Ed. 

THE  FOREIGN  CORPORATION  LAWS  OF  IOWA,  MINNESOTA,  WIS- 
CONSIN AND  NORTH  DAKOTA,  AND  AS  TO  WHETHER  THE 
MAINTENANCE  OF  A  TRANSFER  HOUSE  OR  THE  MAKING 
OF  SHIPMENTS  FROM  OTHER  STATES  THROUGH  THIRD 
PERSONS  CONSTITUTES  "DOING  BUSINESS." 

(Kingman  Plow  Co.,  October  30, 1903.) 
I  have  your  favor  enclosing  communication  from 
Kingman  Plow  Co.  That  company  asks  my  opinion 
as  to  whether  or  not  it  is  necessary  for  it  to  comply 
with  the  foreign  corporation  laws  of  the  states  of  Iowa, 
Minnesota,  Wisconsin  and  North  Dakota,  and  what  re- 
quirements the  company  must  comply  with.  The  com- 
pany states 

"The  method  of  carrying  on  the  business  in  the 
states  of  Minnesota,  North  Dakota  and  Wisconsin 
is  that  our  principal  office  is  located  at  Peoria, 
where  the  books  and  accounts  are  kept,  and  to 
which  office  all  contracts  made  by  the  travelers  in 
the  above  territory  are  sent. 

We  work  the  territory  by  a  number  of  travelers 
and  for  convenience  for  filling  orders  for  local 
shipments  we  carry  a  stock  of  goods  at  a  transfer 
house  in  Minneapolis,  which  transfer  house  han- 
dles the  goods  under  a  transfer  arrangement ;  this 
transfer  company  storing  the  goods  and  shipping 


264 

them  on  orders.  The  travelers  operating  in  said 
territory  are  under  the  supervision  of  our  repre- 
sentative, who  has  office  and  desk  room  at  the 
transfer  house  above  mentioned. 

This  representative  superintends  the  traveling 
men  working  said  territory  and  the  contracts  made 
by  the  travelers  are  by  them  sent  to  this  repre- 
sentative and  if  he  considers  the  contracts  accept- 
able he  has  them  forwarded  to  the  home  office 
with  his  approval  and  recommendation  that  they 
be  accepted;  but  final  action  on  the  contract  is 
made  at  the  home  office,  except  it  might  be  in  cases 
where  our  representative  at  Minneapolis  is  posi- 
tively assured  that  the  parties  are  good.  After  the 
contracts  are  made  if  the  parties  order  any  addi- 
tional shipments,  such  goods,  if  they  are  to  be 
shipped  out  of  the  transfer  stock  at  Minneapolis, 
will  be  forwarded  by  the  transfer  agent  and  on 
orders  from  our  local  representative,  but  as  be- 
fore stated,  all  accounts  will  be  kept  at  Peoria  and 
all  billing  will  be  done  from  the  Peoria  office. 

As  to  the  filling  of  orders  will  explain  that  we 
handle  goods  made  by  other  factories  besides  our 
own  and  if  the  order  with  the  customer  should  be 
kept  for  a  carload  of  buggies,  say  from  Cincin- 
nati, why  the  shipment  would  be  made  from  the 
factory  direct  to  the  customer,  but  the  invoice 
would  be  made  at  the  Peoria  office.  If  the  goods 
ordered  by  the  customer  consist  of  what  we  term 
a  'mixed  carload,'  they  would  probably  be  assem- 
bled at  Peoria  or  Minneapolis  and  shipped  from 
one  or  the  other  of  these  points,  but  the  billing  in 
every  instance  would  be  from  the  Peoria  office. 

We  may  possibly  also  carry  a  transfer  stock  of 
goods  at  some  points  in  North  Dakota,  most  likely 
Fargo,  which  goods  will  be  handled  under  instruc- 
tions from  the  home  office,  or  from  our  local  repre- 
sentative in  Minneapolis. 

If  you  require  any  further  information  kindly 
advise  us." 
The  taking  of  orders  by  traveling  salesmen  subject 


265 

to  the  approval  of  the  home  office  in  Peoria  does  not 
constitute  doing  business  outside  of  Illinois,  and  there- 
fore does  not  subject  the  company  to  the  operation 
of  the  foreign  corporation  laws.  As  this  appears  from 
the  correspondence  to  be  the  only  method  of  transact- 
ing business  pursued  by  the  company  in  Wisconsin  and 
Iowa,  the  company  need  not  comply  with  the  laws  of 
those  states. 

Whether  or  not  keeping  of  a  stock  of  goods  at  a 
transfer  house,  and  the  filling  of  orders  direct  from 
that  house,  is  doing  business  is  covered  by  my  opinion 
of  this  date  to  Deere  &  Co.  In  that  opinion  I  stated 
that  such  transactions  are  "doing  business,"  and  sub- 
ject the  corporation  to  the  operation  of  the  foreign 
corporation  laws.  Inasmuch  as  the  company  has  a 
transfer  house  at  Minneapolis,  and  intends  to  establish 
one  in  North  Dakota,  it  will  be  subject  to  the  foreign 
corporation  laws  of  the  states  of  Minnesota  and  North 
Dakota. 

I  do  not  fully  understand  the  method  pursued  by 
the  company  in  filling  orders.  I  take  it  that  upon  re- 
ceipt of  an  order  for  goods  which  are  manufactured 
by  other  parties,  such  orders  are  turned  over  to  such 
parties  in  the  home  state,  who  fill  them  direct  from 
their  own  factories  in  the  home  state.  If  this  is  cor- 
rect, this  would  not  constitute  doing  business  in  the 
foreign  state.  As  to  the  "mixed  carloads,"  I  assume 
that  the  goods  not  manufactured  by  the  company  are 
shipped  to  the  point  of  assembly,  from  where  they 
are  re-shipped.  This  is  not  "doing  business." 

Of  course,  if  they  are  assembled  at  a  "transfer 
house, ' '  the  maintenance  of  such  transfer  house  would 
constitute  ' '  doing  business. ' ' 

In  answer  as  to  what  the  provision  of  the  laws  of 
Minnesota  and  North  Dakota  are,  I  state  them  as  fol- 
lows: 

MINNESOTA. 

The  laws  of  Minnesota  provide : 

"Section    3429a.     Every   corporation    for    pe- 
cuniary profit,  organized  in  any  other  state,  ter- 


266 

ritory  or  country,  before  it  shall  be  authorized  or 
permitted  to  transact  any  business  herein,  if  al- 
ready established,  or  to  acquire,  hold  or  dispose  of 
property,  real,  personal  or  mixed,  within  this 
state,  or  sue  or  maintain  any  action  at  law  or 
otherwise  in  any  of  the  courts  of  this  state,  shall 
have  and  maintain  a  public  office  or  place  in  this 
state,  for  the  transaction  of  its  business,  and  shall 
appoint  an  agent,  who  shall  reside  in  the  county 
in  which  said  public  office  is  located,  duly  author- 
ized to  accept  service  of  process  and  upon  whom 
service  of  process  may  be  had  in  any  action  to 
which  said  corporation  may  be  a  party,  and  serv- 
ice upon  such  agent  shall  be  taken  and  held  as  due 
and  personal  service  upon  such  corporations. 

A  duly  authenticated  copy  of  the  appointment 
of  said  agent  shall  be  filed  in  the  office  of  the  sec- 
retary of  state,  and  a  certified  copy  thereof  shall 
be  prima  facie  evidence  of  the  appointment  and 
authority  of  such  agent.  (L.  1899,  ch.  69,  sees.  1, 
2;  taking  effect  July  1,  1899.) 

Section  3429b.  Every  corporation  for  pecuniary 
profit,  organized  in  any  other  state,  territory  or 
country,  now  or  hereafter  doing  business  within 
this  state,  shall  file  in  the  office  of  the  secretary 
of  state  a  copy  of  its  charter  or  certificate  or  arti- 
cles of  incorporation,  duly  certified  and  authenti- 
cated by  the  proper  authority;  and  the  principal 
or  agent  in  this  state  of  the  said  corporation  shall 
make  and  file  with  the  secretary  of  this  state,  with 
the  articles  or  certificates  above  provided  for,  a 
statement  duly  sworn  to,  showing  the  proportion 
of  the  capital  stock  of  the  said  corporation  which 
is  represented  by  its  property  located  and  business 
transacted  in  this  state;  and  such  corporation 
shall  be  required  to  pay  into  the  state  treasury 
the  sum  of  fifty  dollars  ($50)  for  the  first  fifty 
thousand  dollars  ($50,000)  or  fraction  thereof  of 
such  proportion  of  capital  stock,  and  the  further 
sum  of  five  dollars  ($5)  for  every  additional  ten 
thousand  dollars  ($10,000)  or  fraction  thereof  of 


267 

such  proportion  of  capital  stock,  and  no  increase 
of  the  capital  stock  of  any  corporation  shall  be 
valid  or  effectual  until  such  corporation  shall  have 
paid  into  the  state  treasury  the  sum  of  five  dollars 
($5)  for  every  ten  thousand  dollars  ($10,000)  or 
fraction  thereof  of  such  increase  of  said  propor- 
tion of  capital  of  such  corporation. 

In  determining  the  proportionate  share  of  the 
capital  stock  of  such  corporation  upon  which  it 
shall  pay  license  fees  as  aforesaid,  the  business 
of  said  corporation  transacted  in  and  out  of  this 
state  during  the  years  immediately  preceding  the 
filing  of  its  articles  or  certificates  as  above  pro- 
vided for  shall  be  considered  and  control.  Upon 
a  compliance  with  the  above  provisions  by  the  said 
corporation,  the  secretary  of  state  shall  execute 
and  deliver  to  said  corporation  a  certificate  that 
said  corporation  has  duly  complied  with  the  laws 
of  this  state,  and  is  authorized  to  do  business 
herein,  stating  the  amount  of  its  capital  and  of 
the  proportion  thereof  which  is  represented  in 
this  state,  and  such  certificate  shall  be  prima  facie 
evidence  that  the  said  corporation  is  entitled  to 
all  the  rights  and  benefits  of  this  act,  and  of  the 
valid  creation  and  incorporation  of  such  corpora- 
tion, and  such  corporation  shall  enjoy  those  rights 
and  benefits  for  the  period  of  thirty  years  from 
and  after  the  date  of  such  certificate,  unless  the 
charter  or  corporate  existence  of  such  corpora- 
tion shall  sooner  expire  under  its  own  provisions 
or  those  of  the  state  under  whose  laws  it  was  cre- 
ated, and  the  right  and  privilege  of  such  corpora- 
tion to  so  transact  business  and  acquire  and  hold 
property  in  this  state,  may  be  renewed  for  like 
periods  by  refiling  its  articles  of  incorporation 
with  the  secretary  of  state,  and  by  payment  of 
like  fees  whenever  pursuant  to  the  provisions  of 
this  act,  its  said  right  and  privileges  shall  have 
expired.  (L.  1899,  ch.  69,  sec.  3,  as  amended  by 
L.  1899,  ch.  70;  taking  effect  April  7,  1899.) 

Section  3429c.    Every  corporation  for  pecuniary 


268 

profit,  organized  in  any  other  state,  territory  or 
country  now  doing  business  in,  or  which  may  here- 
after do  business  in  this  state,  which  shall  neglect 
or  fail  to  comply  with  the  conditions  of  this  act, 
shall  be  subject  to  a  fine  of  one  thousand  ($1,000) 
dollars,  to  be  recovered  before  any  court  of  com- 
petent jurisdiction;  and  it  is  hereby  made  the 
duty  of  the  secretary  of  state  immediately  after 
October  first  (1st)  eighteen  hundred  and  ninety- 
nine  (1899),  and  as  often  thereafter  as  may  be 
advised  that  corporations  are  doing  business  in 
contravention  of  this  act,  to  report  such  fact  to  the 
county  attorney  of  the  county  in  which  the  busi- 
ness of  such  corporation  is  located,  and  the  county 
attorney  shall,  as  soon  thereafter  as  practicable, 
institute  proceedings  to  recover  the  fine  herein- 
before provided  for,  which  fine  shall  be  paid  into 
the  state  treasury ;  and  no  corporation  which  shall 
fail  to  comply  with  the  provisions  of  this  act  can 
mantain  any  suit  or  action,  either  legal  or  equit- 
able, in  any  of  the  courts  of  this  state,  upon  any 
demand,  whether  arising  out  of  contract  or  tort; 
Provided,  that  nothing  in  this  act  shall  be  taken 
or  construed  as  releasing  any  such  corporation 
from  fully  complying  with  any  of  the  provisions 
of  the  existing  laws  of  this  state;  and  provided 
further,  that  the  provisions  of  this  act  shall  not 
apply  to  corporations  engaged  in  an  exclusively 
manufacturing  business  in  this  state ;  nor  to  drum- 
mers or  traveling  salesmen  soliciting  business  in 
this  state  for  corporations  which  are  entirely  non- 
resident ;  nor  to  any  corporation  engaged  only  in 
the  business  of  loaning  money  or  investing  in  se- 
curities in  this  state,  including  all  business  inci- 
dentally growing  out  of  the  same  and  the  handling 
of  such  real  estate  and  other  property  as  may  be 
taken  by  foreclosure  or  otherwise  in  liquidation 
of  such  loans  or  securities ;  and  provided  further, 
that  none  of  the  provisions  of  this  act  shall  apply 
to  or  in  any  manner  affect  corporations  which  may 


269 

be  organized  for  the  purpose  of  raising  and  im- 
proving live  stock,  cultivating  and  improving 
farms,  garden  or  horticultural  lands,  growing 
sugar  beets,  or  any  corporation  founded  for  the 
purpose  of  canning  fruits  and  vegetables.  Pro- 
vided, that  this  act  shall  not  apply  to  any  foreign 
corporation  heretofore  duly  licensed  or  authorized 
to  transact  business  in  this  state  and  which  has 
heretofore  paid  to  the  state  treasurer  the  fees 
on  capital  stock  required  of  domestic  corporations 
under  section  3391  of  the  compiled  statutes  of 

1894,  or  any  corporation  whose  sole  business  in 
this  state  is  the  transportation  of  freight  or  pas- 
sengers, or  both  freight  and  passengers  by  water. 
(L.  1899,  ch.  69,  sec.  4;  taking  effect  July  1,  1899.) 

Section  3429d.  That  chapter  332  of  the  general 
laws  of  the  state  of  Minnesota  for  the  year  of 

1895,  entitled  'An  act  to  provide  for  the  appoint- 
ment, by  corporations  created  or  organized  under 
the  laws  of  another  state,  of  agents  to  receive 
service  of  summons',  be  and  the  same  is  hereby 
repealed.     (L.  1899,  ch.  69,  sec.  5;  taking  effect 
July  1,  1899.) 

Section  3429e.  The  transfer  agent  in  this  state 
of  any  foreign  or  domestic  corporation,  whether 
such  agent  shall  be  a  corporation  or  a  natural  per- 
son, shall  be  at  all  times  during  the  usual  hour 
of  transacting  business,  exhibit  to  any  stockholder 
of  such  corporation,  when  required  by  him,  the 
transfer  book  and  a  list  of  the  stockholders  there- 
of if  in  their  power  to  do  so,  and  for  every  viola- 
tion of  the  provisions  of  this  section  such  agent, 
or  any  officer  or  clerk  of  such  agent,  shall  forfeit 
the  sum  of  two  hundred  and  fifty  dollars  ($250), 
to  be  recovered  by  the  person  to  whom  such  re- 
fusal was  made." 

Sections  5200  and  5204  provide  for  the  service  of 
process  on  foreign  corporations. 

Sections  5890  and  5891  provide: 

"Section    5890.      A    foreign    corporation    may 


270 

prosecute  in  the  courts  of  this  state,  in  the  same 
manner  as  corporations  created  under  the  laws 
thereof.  (G.  S.  1878,  ch.  76,  sec.  5555.) 

Section  5891.  A  foreign  corporation  cannot 
maintain  an  action  in  this  state  upon  an  obligation 
or  liability  arising  out  of,  or  in  consideration  of, 
an  act  which  is  contrary  to  the  law  or  policy  of 
the  state,  or  which  is  hereby  forbidden  in  respect 
to  corporations  or  associations  therein  whose  gen- 
eral business  is  similar  to  that  of  such  foreign 
corporation.  (G.  S.  1878,  ch.  76,  sec.  3;  Kelley's 
Statutes,  sec.  5556.)" 

NORTH  DAKOTA. 

The  laws  of  North  Dakota  provide : 

"Section  136.  No  foreign  corporation  shall  do 
business  in  this  state  without  having  one  or  more 
places  of  business  and  an  authorized  agent  or 
agents  in  the  same,  upon  whom  process  may  be 
served. 

Section  3261.  No  foreign  corporation,  associa- 
tion or  joint  stock  company  except  an  insurance 
company,  shall  transact  any  business  within  this 
state,  or  acquire,  hold  or  dispose  of  property,  real 
or  personal,  within  this  state,  until  such  corpora- 
tion shall  have  filed  in  the  office  of  the  secretary 
of  state  a  duly  authenticated  copy  of  its  charter 
or  articles  of  incorporation  and  shall  have  com- 
plied with  the  provisions  of  this  chapter;  Pro- 
vided, that  the  provisions  of  this  chapter  shall  not 
apply  to  corporations  created  for  religious  or 
charitable  purpose  solely. 

Section  3262.  Such  charter  or  articles  of  in- 
corporation shall  be  recorded  in  a  book  to  be  kept 
by  the  secretary  of  this  state  for  that  purpose. 

Section  3263.  Such  corporations,  association  or 
joint  stock  company,  shall  by  a  duly  executed  in- 
strument, filed  in  the  office  of  the  secretary  of 
state,  constitute  and  appoint  the  secretary  of  state 
and  his  successors,  its  true  and  lawful  attorney, 


271 

upon  whom  all  process  in  any  action  or  proceed- 
ing against  it  may  be  served  and  therein  shall 
agree  that  any  process  which  may  be  served  upon 
its  said  attorney,  shall  be  of  the  same  force  and 
validity  as  if  served  upon  it  personally  in  this 
state,  and  that  such  appointment  shall  continue 
in  force  irrevocable  so  long  as  any  liability  of  the 
corporation,  association,  or  joint  stock  company, 
remains  outstanding  in  this  state.  Service  upon 
such  attorney  shall  be  deemed  sufficient  service 
upon  the  corporation,  association  or  joint  stock 
company.  Whenever  any  process  against  any  for- 
eign corporation,  association  or  joint  stock  com- 
pany, doing  business  in  this  state,  shall  be  served 
upon  the  secretary  of  state,  he  shall  forthwith  mail 
a  copy  of  such  process,  postage  prepaid,  and  di- 
rected to  such  corporation,  association  or  joint 
stock  company  at  its  principal  place  of  business, 
or  if  it  is  a  corporation,  association  or  joint  stock 
company  of  a  foreign  country,  to  its  resident  man- 
ager in  the  United  States,  or  to  such  other  person 
as  may  have  been  previously  designated  by  it, 
by  written  notice  filed  in  the  office  o'f  the  secretary 
of  state.  As  a  condition  valid  and  effectual  serv- 
ice, the  plaintiff  shall  pay  to  the  secretary  of  state, 
at  the  time  of  the  service,  the  sum  of  two  dollars, 
which  the  plaintiff  shall  recover  as  taxable  costs, 
if  he  prevails  in  his  action.  The  secretary  of  state 
shall  keep  a  record  of  all  such  processes  which 
shall  show  the  time  and  hour  of  service. 

Section  3264.  Any  failure  to  comply  with  the 
provisions  of  the  last  three  sections,  and  with  sec- 
tion 3116  of  this  code,  shall  render  each  and  every 
officer,  agent  and  stockholder  of  any  corporation, 
association  or  joint  stock  company,  failing  to  com- 
ply herewith,  jointly  and  severally  liable  on  any 
and  all  contracts  of  such  corporation,  association 
or  joint  stock  company  made  within  this  state 
during  the  time  such  corporation,  association,  or 
joint  stock  company  is  so  in  default. 

Section  3265.      Every  contract  made  by  or  on 


272 

behalf  of  any  corporation,  association  or  joint 
stock  company,  doing  business  in  this  state,  with- 
out first  having  complied  with  the  provisions  of 
sections  3261  and  3263,  if  other  than  an  insurance 
company,  shall  be  wholly  void  on  behalf  of  such 
corporation,  association  or  joint  stock  company 
and  its  assigns,  but  any  contract  so  made  in  vio- 
lation of  the  provisions  of  this  section  may  be  en- 
forced against  such  corporation,  association  or 
joint  stock  company." 


NOTE: — As  to  whether  the  maintenance  of  a  "transfer-house"  con- 
stitutes "doing  business"  by  a  foreign  corporation,  see  opinion  of 
July  13,  1907,  for  the  Kingman  Plow  Co.  and  also  the  cases  of  Sock 
Island  Plow  Co.  v.  Peterson,  93  Minn.,  356,  101  N.  W.,  616,  and  Thomas 
Mfg.  Co.  v.  Knapp,  112  N.  W.,  989  (Minn.,  July  5,  1907).— Ed. 


WHAT   CONSTITUTES  A  VALID  AND   ENFORCEABLE   GUARANTY 
OF  AN  ACCOUNT. 

(Beacon  Falls  Rubber  Shoe  Co.,  October  30,  1903.) 

"We  would  like  to  have  counsel's  opinion  as 
to  whether  or  not  the  following  letter  from  a  sec- 
ond party  can  be  construed  as  a  guarantee  of  an 
account  due  us  by  a  third  party,  and  whether  in 
the  subsequent  insolvency  of  the  third  party,  we 
have  any  recourse  against  the  second  party. 

'  In  regard  to  account,  will 

say  that  you  need  not  worry  about  this.  It  may 
be  possible  that  I  will  take  the  stock  and  close 
it  out  for  him.  He  is  not  insolvent  but  has  simply 
got  overstocked,  and  will  be  a  little  slow  in  pay- 
ing up,  but  I  will  see  that  you  are  paid. ' 

We  do  not  know  whether  the  contingent  cir- 
cumstances would  have  any  influence  on  the  case, 
but  will  state  them. 

When  we  first  opened  the  account  with  the  third 
party  our  orders  came  through  the  second  party, 
and  the  goods  were  billed  to  him,  but  shipped  di- 
rect to  the  third  party,  and  all  bills  contracted  in 
the  name  of  the  second  party  were  paid  promptly. 
Subsequently  the  third  party  began  ordering 


273 

goods  direct,  and  we  billed  the  goods  di- 
rect. The  third  party  did  not  take  care  of 
his  accounts  as  promptly  as  we  expected,  and  we 
crowded  him  for  the  money.  He  evidently  in- 
formed the  second  party  of  this,  as  the  above  letter 
came  unsolicited,  and  was  not  in  answer  to  any 
communication  of  ours,  we  having  had  no  corre- 
spondence with  him  in  reference  to  the  third 
party's  accounts. 

The  second  party  was  a  large  customer  of  ours, 
and  we   naturally   respected  his   wishes,   feeling 
that  from   our  previous   experience  he  was  un- 
doubtedly familiar  with  the  financial  condition  of 
the  third  party,  and  was  interested  to  such  an  ex- 
tent that  he  did  not  care  to  have  us  crowd  the  third 
party  at  that  time.  When  the  third  party  went  into 
bankruptcy   it   was    discovered   that   the    second 
party  was  his  largest  creditor. ' ' 
It  is  necessary  to  the  validity  of  a  guaranty  that 
there  should  be  a  consideration  therefor,  unless  the 
guaranty  is  under  seal.      Where  the  guaranty  is  col- 
lateral to  the  principal  contract,  but  is  made  at  the 
same  time  there  need  not  be  any  consideration  other 
than  that  moving  between  the  creditor  and  the  original 
debtor  under  the  principal  contract. 

Where,  however,  the  guaranty  is  made  subsequent  to 
the  creation  of  the  debt  and  was  not  the  inducement  to 
it,  the  consideration  of  the  original  debt  will  not  sup- 
port it.  There  must  be  a  new  and  further  considera- 
tion, such  as  an  extension  of  the  time  payment,  a  for- 
bearance to  sue,  etc. 

In  the  present  case  the  guaranty  was  executed  after 
the  credit  had  been  given.  A  new  consideration  was, 
therefore,  necessary.  It  does  not  appear  that  the  guar- 
anty was  given  in  consideration  of  any  promise  by  the 
creditor  to  forbear  to  sue.  The  fact  that  there  was  an 
actual  forbearance  is  not  sufficient  unless  there  was 
also  an  actual  agreement  to  forbear.  Again  there  is 
no  request  by  the  guarantor  that  the  creditor  refrain 
from  suing. 

If  all  of  the  facts  have  been  given  me  and  if  my 


274 

interpretation  of  the  question  is  in  accord  with  the 
facts,  then  I  am  of  the  opinion  that  the  guaranty  is  un- 
enforceable. 


WHETHER  THE  STATE  OF  IOWA  HAS  THE  RIGHT  TO  TAX  PRI- 
VATE CARS  OF  A  FOREIGN  CORPORATION  USED  EXCLUSIVELY 
IN  HAULING  ITS  OWN  PRODUCT. 

(Kingman  Plow  Company,  October  30,  1903.) 

"Enclosed  we  hand  you  a  letter  and  blank  re- 
port from  the  executive  council  of  Iowa.  We  de- 
sire to  have  your  opinion  whether  or  not  this  law 
applies  to  concerns  like  ours,  that  may  own  a  few 
private  cars.  In  further  explanation  will  say  that 
we  are  the  owners  of  nine  freight  cars  which  were 
purchased  by  us  for  the  purpose  of  using  in  our 
business,  but  being  handled  by  the  railroad  com- 
panies, we  cannot  prevent  them  when  in  their 
hands  to  use  them  at  times  for  carrying  freight 
other  than  their  own;  and  when  they  do  so,  they 
make  a  report  of  the  use  of  such  cars,  and  pay  us 
for  such  use. 

If  you  need  any  further  information  to  for- 
mulate a  decision  as  to  whether  we  are  to  comply 
with  the  law  and  make  such  report,  kindly  advise. 
You  will  understand  that  these  cars  are  held  by 
us  the  same  as  any  other  person's  property,  and 
we  may  pay  taxes  on  such  property  in  our  own 
company.  We  have  had  similar  blanks  from  a 
number  of  the  northwestern  states  who  seem  to 
want  us  to  hold  these  cars  for  taxation,  and  that 
we  are  liable  in  each  state  in  which  these  may  hap- 
pen to  travel,  and  it  will  be  quite  a  burden  for  us 
to  own  freight  cars." 

The  act  in  question  (Chapter  62,  Acts  Twenty-ninth 
General  Assembly,  approved  April  12,  1902)  is  en- 
titled: 

"An  act  defining  and  providing  for  the  taxation 
of  freight  line  and  equipment  companies." 
Section  1  provides : 


275 

"FREIGHT  LINE  AND  EQUIPMENT  COMPANIES.  Ev- 
ery company  engaged  in  the  business  of  operating 
cars,  not  otherwise  listed  for  taxation  or  taxed 
in  Iowa,  for  the  transportation  of  freight  whether 
such  car  be  owned  by  such  company,  or  any  other 
person  or  company,  over  any  railway  line  or  lines, 
in  whole  or  in  part  within  this  state,  such  line  or 
lines,  not  being  owned,  leased  or  operated  by  such 
company,  whether  such  cars  be  termed  box,  flat, 
coal,  ore,  tank,  stock,  gondola,  furniture  or  refrig- 
erator cars,  or  by  some  other  name, shall  be  deemed 
to  be  a  freight  line  company.  Every  company  en- 
gaged in  the  business  of  furnishing  or  leasing 
cars  of  whatsoever  kind  or  description  of  any  rail- 
way line  or  lines,  wholly  or  partially  within  this 
state,  such  line  or  lines  not  being  owned,  leased, 
or  operated  by  such  company,  and  such  cars  not 
being  otherwise  listed  for  taxation  in  Iowa  shall 
be  deemed  to  be  an  equipment  company." 

Sections  2  and  3  provide  for  verified  statements. 

Clause  6  of  Section  2  provides  that  the  company  shall 
make  a  report  as  follows: 

"The  aggregate  number  of  miles  traveled  by  its 
cars  during  the  preceding  calendar  year  while 
said  cars  were  used  in  transporting  freight  either 
to  points  in  this  state  or  between  a  point  within 
this  state  and  a  point  without  this  state;  but  not 
including  the  mileage  in  this  state  or  elsewhere,  of 
its  cars,  while  the  said  cars  are  used  in  transport- 
ing freight  not  consigned  either  to  or  from  some 
point  within  this  state." 

Section  4  provides : 

"Upon  the  meeting  of  the  executive  council  on 
the  second  Monday  of  July  in  each  year,  it  shall 
value  and  assess  as  the  property  of  said  company 
within  this  state,  the  cars  of  the  said  company 
necessary,  under  the  circumstances  ordinarily  at- 
tending the  use  of  such  cars,  for  the  mileage  to  be 
reported  under  paragraph  six  of  the  preceding 
section  of  this  act,  after  examining  such  state- 
ments and  after  ascertaining  the  actual  value  of 


276 

said  property  of  such  company  therefrom,  and 
from  such  other  information  as  it  may  have  or 
obtain.  For  that  purpose  the  executive  council 
may  require  such  company  by  its  agents  or  offi- 
cers, to  appear  before  said  council  with  such 
books,  papers,  or  additional  statements  as  the 
council  may  require,  and  may  compel  the  attend- 
ance of  witnesses  in  case  said  council  shall  deem 
it  necessary  to  enable  it  to  ascertain  the  actual 
value  of  such  property.  From  the  entire  actual 
value  of  the  property  within  the  state  so  ascer- 
tained, there  shall  be  deducted  by  the  said  council 
the  actual  value  of  all  cars  locally  assessed,  and 
one-fourth  of  the  residue  of  such  actual  value  so 
ascertained,  shall  be  by  the  executive  council  as- 
sessed to  said  company." 

I  assume  that  the  company  merely  owns  the  cars  in 
question,  that  they  are  not  owned  through  the  medium 
of  an  independent  company,  that  the  company  does 
not  operate  the  cars  in  any  way — that  it  does  not  use 
them  for  the  transportation  of  freight  other  than  the 
shipment  by  it  (except  where  the  railroad  company 
uses  the  cars  without  the  company's  knowledge  or 
consent)  that  it  does  not  use  the  cars  except  as  a  re- 
ceptacle for  goods  which  it  ships,  that  the  cars  are 
handled  by  the  railroad  company,  and  that  the  plow 
company  does  not  furnish  or  lease  such  cars  to  others. 
I  assume  also  that  the  cars  are  used  by  the  company 
for  the  shipment  of  its  own  products  from  points  out- 
side of  Iowa  to  points  in  Iowa. 

I  am  of  the  opinion  that  the  plow  company  is  not  a 
company  "engaged  in  the  business  of  operating  cars 

*     for  the  transportation   of  freight 
over  any  railway  line  or  lines,"  and  that  it 

is  not  a  company  %"  engaged  in  the  business  of  furnish- 
ing or  leasing  cars  *  *  *  to  be  used  in  the  operation 
of  any  railway  line  or  lines"  and  therefore 

the  plow  company  does  not,  in  my  opinion,  come  with- 
in the  letter  of  the  law. 

If  my  assumption  as  to  the  facts  is  correct,  the 
plow  company  is  engaged  in  interstate  commerce.  It 


277 

is  beyond  the  power  of  a  state  to  levy  a  tax  which  is 
in  substance  and  effect  a  direct  tax  on  interstate 
commerce,  but  this  does  not  deprive  the  state  of  the 
power  to  levy  a  property  tax  upon  property  employed 
in  interstate  commerce  having  a  situs  within  their 
jurisdiction.  If  a  corporation  owning  rolling  stock 
does  business  in  states  other  than  the  state  of  its  in- 
corporation, and  uses  such  rolling  stock  in  the  state 
where  it  does  such  business,  the  situs  of  such  property 
will  be  in  the  state  where  it  is  so  used,  and  such  state 
may  levy  a  tax  on  the  average  amount  of  the  rolling 
stock  thus  used,  even  though  the  incorporation  is  en- 
gaged in  interstate  commerce. 

Under  the  facts  stated  in  its  present  inquiry  and 
those  referred  to  in  my  opinion  to  the  Plow  Company 
of  this  date,  it  appears  that  the  Plow  Company  ships 
its  own  goods  to  Iowa  in  its  own  cars,  and  the  cars, 
when  emptied,  are  returned  to  the  place  of  shipment 
outside  Iowa,  and  are  not  used  in  any  other  way  (ex- 
cept as  set  forth  in  the  letter  of  the  Plow  Company) ; 
the  Plow  Company  does  no  business  of  any  kind  in 
Iowa,  except  as  aforesaid,  and  I  am,  therefore,  of  the 
opinion  that  the  situs  of  such  cars  is  outside  of  Iowa, 
and  the  act  under  consideration  cannot  constitutionally 
apply  to  the  Plow  Company,  because  of  its  business 
being  exclusively  interstate  commerce.  See  my  opin- 
ion to  Illinois  Zinc  Company  of  July  24,  1901. 


WHETHER    A    CARRIER    IS    LIABLE    FOR    GOODS    DELAYED    IN 
TRANSIT    ON    THE    LINES    OF    A    CONNECTING    CARRIER. 

(Austin  Manufacturing  Company,  October  30,  1903.) 
"Here  is  the  proposition:  Our  customer  in 
Texas  orders  a  carload  of  goods  to  be  shipped 
over  a  road  designated  by  him.  We  ignored  the 
routing  instructions  and  gave  the  shipment  to  a 
Chicago  road,  which  we  will  term  X,  from  which 
road  we  get  a  clear  bill  of  lading,  with  no  stipu- 
lation on  our  part  or  on  their  part,  as  to  what 
connection  they  shall  turn  the  shipment  over  to  to 


278 

carry  it  from  the  end  of  their  line  to  its  destina- 
tion. The  X  road  turns  the  cars  over  to  the  Y 
road  at  St.  Louis  three  days  after  they  receive 
it,  and  for  several  weeks  thereafter  neither  we 
nor  our  customer  were  able  to  learn  anything 
about  the  car,  although  frequent  tracers  were  sent 
out  after  it.  After  waiting  five  weeks  the  custo- 
mer notifies  us  that  he  will  not  receive  the  goods 
when  they  do  arrive  and  fills  his  requirements 
elsewhere. 

At  the  end  of  seven  weeks,  or,  to  be  precise, 
fifty-two  days  after  the  Y  road  received  the  ship- 
ment at  St.  Louis,  it  delivers  it  at  destination, 
where  our  customer  refuses  to  accept  it.  As  we 
ignored  the  customer's  routing  instructions,  we 
can  not  compel  him  to  take  the  goods. 

Now,  the  point  is,  have  we  not  recourse  against 
the  railway  for  the  unreasonable  time  consumed 
by  it  in  transporting  this  shipment,  on  account  of 
which  we  have  lost  the  sale !  We '  prepaid  the 
freight  on  the  car  to  the  Texas  point,  amounting 
to  $264.00;  the  return  freight  will  be  the  same, 
so  we  are  out  the  profit  on  the  sale  and  $528.00  in 
freight.  Is  anyone  responsible  to  us,  in  whole 
or  in  part,  for  this  loss!  If  so,  to  what  extent, 
and  is  our  legal  claim  against  the  X  road  or  Y 
road?  We  should  like  to  see  this  question  passed 
upon  by  the  able  attorney  of  our  association  and 
feel  sure  that  it  will  bring  out  points  of  interest 
to  all  our  members." 

The  question  as  to  the  liability  of  a  carrier  of  goods 
for  damages  caused  by  delay  in  transit  is  covered  by 
my  opinion  to  the  Association  under  date  of  October 
28,  1902,  in  answer  to  the  query  of  F.  T.  Bentley, 
chairman  of  the  Traffic  Committee. 

If  the  delay  occurs  on  the  initial  carrier's  own  line, 
such  carrier  can  not  escape  liability  because  the  goods 
are  to  pass  over  other  lines.  If  the  delay  occurs  on 
the  line  of  a  connecting  carrier,  such  carrier  is  liable. 
Whether  the  initial  carrier  is  liable  for  a  delay  oc- 
curring on  the  line  of  a  connecting  or  intermediate 


279      . 

carrier  presents  a  more  difficult  question,  and  one 
upon  which  the  authorities  are  not  in  unison.  Of 
course,  the  initial  carrier  may  contract  specially  for 
a  through  liability.  The  courts  of  Illinois  have  adopted 
the  rule  that  the  initial  carrier  by  receiving  goods  for 
transportation  to  a  point  beyond  its  own  line  over  con- 
necting lines  and  issuing  a  through  bill  of  lading  is 
responsible  for  the  safe  and  prompt  carriage  of  the 
goods  over  the  entire  route. 

7.  C.  R.  R.  v.  Frankenberg,  54  111.,  88. 

I.  C.  R.  R.  v.  Copeland,  24  111.,  332. 

7.  C.  R.  R.  v.  Johnson,  43  111.,  389. 

6  Ency.  of  Law  (2nd  Ed.),  pp.  611-12. 
The  carrier  may,  however,  by  special  contract  with 
the  shipper,  and  not  by  general  notice,  limit  its  lia- 
bility to  such  damage  or  loss  as  may  occur  on  its  own 
line  of  carriage.  If  the  shipper  takes  a  receipt  for 
his  goods,  or  bill  of  lading  from  the  carrier,  contain- 
ing conditions  limiting  the  liability  of  the  carrier  in 
such  way  as  it  is  competent  for  him  to  do  with  knowl- 
edge on  the  part  of  the  shipper  of  such  conditions  con- 
tained in  such  receipt  or  bill  of  lading,  it  becomes  his 
contract  as  fully  as  if  he  had  signed  it. 

7.  C.  R.  R.  Co.  v.  Frankenberg,  supra. 

6  Ency.  of  Law  (2nd  Ed.),  p.  639. 
And  if  the  shipper  assent  to  the  restriction  of  lia- 
bility, he  is  bound  thereby. 

Where  there  is  a  delay  for  which  the  carrier  is  li- 
able, the  ordinary  measures  of  damages  is  the  differ- 
ence between  the  market  value  of  the  property  at  the 
time  and  place  at  which  the  delivery  should  have  been 
made  and  the  value  when  delivery  was  actually  made, 
whether  the  difference  in  value  was  a  result  of  a  de- 
cline in  the  market  or  of  damage  to  the  goods  suffered 
in  consequence  of  the  delayed  delivery.  Interest  should 
be  added,  and  the  freight  charges  to  the  place  of  de- 
livery if  unpaid,  should  be  deducted. 

There  may  be  circumstances  under  which  this  rule 
of  damages  may  be  inequitable,  as,  for  instance,  if  the 
carrier  has  undertaken  to  carry  within  a  certain  time 
or  for  a  given  purpose.  Where  the  owner  of  the 


280 

goods  has  made  a  sale  of  them,  provided  they  are  de- 
livered in  a  certain  time,  and  the  carrier,  being  in- 
formed of  the  fact,  undertook  to  carry  and  deliver 
them  within  that  time,  the  carrier  is  liable  for  what- 
ever the  owner  had  lost  for  the  failure  to  deliver  in 
time,  and  this  would  be  the  difference  between  the  con- 
tract price  and  the  market  price  of  the  goods  when 
delivered. 

As  I  am  not  familiar  with  all  the  circumstances  of 
the  case  as  to  the  nature  of  the  goods,  the  contract 
under  which  the  goods  were  sold,  the  contract  with 
the  carrier,  and  whether  or  not  there  was  a  market 
for  the  goods  at  the  destination,  and  whether  the  goods 
have  since  been  sold,  I  can  express  no  opinion  on  the 
measure  of  damages  applicable  to  the  facts  of  the 
present  case. 


WHETHER  BOOK  ACCOUNTS  CONSTITUTE  CAPITAL  EM- 
PLOYED*' WITHIN  THE  MEANING  OF  THE  BONUS  ACT  OF 
PENNSYLVANIA. 

(Oliver  Typewriter  Co.,  October  30th,  1903.) 

"  Referring  to  the  opinion  of  Mr.  Levy  Mayer, 
under  date  of  October  7th,  1901,  concerning  the 
constitutionality  of  the  so-called  'Hosack'  taxa- 
tion or  bonus  act  of  Pennsylvania,  will  you  kindly 
inform  us  whether  it  would  be  proper  to  eliminate 
book  acounts  in  making  up  statement  of  the 
amount  of  capital  employed  in  that  state  under 
the  terms  of  that  act.  We  have  been  advised  that 
such  accounts  are  exempt. 

It  is  also  our  desire  to  know  whether  a  foreign 
corporation  doing  business  in  Pennsylvania  is 
liable  for  any  other  taxes  levied  in  that  state, 
and  if  so,  the  basis  of  same." 

The  meaning  of  the  phrase  "capital  actually  em- 
ployed wholly  within  the  state  of  Pennsylvania ' '  is  set 
forth  in  my  opinion  to  the  Oliver  Co.  under  the  date 
of  January  15,  1902.  The  law  provides  that  the  tax 
shall  be  paid  by  the  corporation  upon  "the  amount 


281 

of  their  capital  actually  employed  or  to  be  employed 
wholly  within  the  state  of  Pennsylvania. ' '  While  book 
accounts  probably  come  within  the  meaning  of  the 
term  "capital"  they  are  not  in  my  opinion  "capital 
actually  employed"  in  Pennsylvania  within  the  mean- 
ing of  the  act.  As  I  am  not  advised  as  to  what  dis- 
position is  made  of  the  proceeds  of  the  book  accounts 
when  collected,  I  can  express  no  opinion  upon  whether 
or  not  they  come  within  the  meaning  of  the  term  "to 
be  employed." 

The  other  provisions  of  the  Pennsylvania  law  regu- 
lating foreign  corporations  are  set  out  in  an  opinion 
to  the  Sanford  Mfg.  Co.  under  date  of  July  20,  1901. 

The  only  other  taxes  for  which  a  corporation  is 
liable  are  the  general  property  taxes  levied  alike  upon 
all  property  located  in  Pennsylvania,  whether  owned 
by  residents  or  non-residents. 


AS  TO  WHAT  TAXES  FOREIGN  CORPORATIONS  ARE  SUBJECT  TO 
IN   PENNSYLVANIA. 

(Oliver  Typewriter  Co.,  November  21,  1903.) 

"Kef erring  to  your  favor  of  the  31st  ult,  we 
acknowledge  receipt  of  copy  of  the  communica- 
tion received  by  you  from  Mr.  Levy  Mayer  in  re- 
ply to  our  recent  inquiry. 

May  we  trouble  you  further  to  find  out  whether 
an  annual  tax  of  five  mills  on  the  amount  of  cap- 
ital stock  reported  as  being  actually  employed 
in  that  state,  should  be  considered  as  being  the 
general  property  taxes  referred  to  in  Mr.  Mayer's 
opinion. 

Your  further  report  on  this  point  will  be  ap- 
preciated." 

The  annual  tax  of  the  five  mills  on  the  amount  of 
capital  stock  actually  employed  in  the  state  of  Penn- 
sylvania, is  in  the  nature  of  a  license  tax,  imposed  as 
a  condition  precedent  to  the  transaction  of  business 
in  that  state  by  a  foreign  corporation.  The  state  is 
not  excluded,  by  the  imposition  of  this  tax,  from  levy- 


282 

ing  an  additional  tax  upon  the  property  of  the  cor- 
poration having  a  situs  within  the  state.  The  com- 
pany is  therefore  subject,  in  addition  to  the  license 
tax,  to  the  payment  of  a  property  tax  upon  its  prop- 
erty situate  in  Pennsylvania  to  the  same  extent  as  all 
other  property  situate  in  that  state. 


MEANING  OF  THE  CHICAGO  ORDINANCE  REQUIRING  A  LI- 
CENSED ENGINEER  TO  BE  IN  CONSTANT  ATTENDANCE  AND 
AS  TO  WHETHER  THE  CITY  CAN  REQUIRE  A  LICENSED  EN- 
GINEER IN  A  BUILDING  IP  IT  IS  SUPPLIED  WITH  STEAM 
FROM  A  NEIGHBORING  PLANT. 

(Illinois  Maintenance  Company,  October  30,  1903.) 

"As  a  member  of  your  association  we  would 
like  to  ask  whether  there  is  any  law  in  the  city 
of  Chicago  requiring  us  to  have  a  licensed  en- 
gineer in  charge  in  a  building  to  which  we  sup- 
ply steam  at  a  pressure  of  60  pounds  through  a 
pipe  line  from  a  boiler  plant  in  another  building 
across  the  street,  the  boiler  plant  in  the  building 
in  question  being  entirely  shut  down  and  there 
being  no  tank  or  boiler  in  said  building  under  the 
pressure;  neither  is  there  anv  steam  engine,  the 
only  steam  used  in  this  building  being  used  for 
heating,  cooking  and  house  pump  purposes. 

We  should  also  like  to  ask  for  an  interpreta- 
tion of  the  following  extract  from  paragraph  1932 
of  chapter  64  of  the  revised  code  of  the  city  of 
Chicago,  which  reads: 

1  It  shall  be  the  duty  of  the  board  of  examiners 
to  see  that  each  boiler  plant,  in  the  city  of  Chi- 
cago, shall  have  a  licensed  engineer,  or  boiler  or 
water  tender,  or  both,  as  provided  therein,  in 
charge  at  all  times  when  working  under  pressure. ' 

Does  the  above  mean  that  such  licensed  engineer 
shall  be  in  personal  attendance  constantly,  or 
does  it  mean  that  there  shall  be  one  such  licensed 
engineer  in  charge  and  responsible  for  the  condi- 
tion of  the  plant,  but  not  necessarily  in  constant 


283 

personal  attendance  during  all  hours  that  the 
plant  is  in  operation? 

The  latter  interpretation  is  the  common  prac- 
tice in  Chicago." 

The  chapter  of  the  Code  of  Chicago  relating  to  the 
licensing  of  engineers  is  entitled  "  Stationary  En- 
gineers" (Chap.  64). 

Section  1  (1923)  provides  for  the  appointment  of 
a  board  of  examiners  "consisting  of  three  practical 
engineers,  who  shall  be  competent  judges  of  the  con- 
struction of  steam  boilers  and  engines/'  for  the  pur- 
pose of  examining  applicants  for  licenses  for  engineers 
and  boilers  or  water  tenders. 

Section  2  (1924)  refers  to  engineers  and  persons 
having  charge  of  steam  boilers. 

Section  4  (1926)  provides  that  an  applicant  for  an 
engineer's  license — 

"must  be  a  machinist  or  engineer,  having  at  least 
two  years'  practice  in  the  management,  operation 
or  construction  of  steam  engines  and  boilers/' 
.and  that 

"an  applicant  for  a  boiler  tender's  license  must 
be  a  person  who  has  a  thorough  knowledge  of  the 
construction,  management  and  operation  of  steam 
boilers." 
Section  9  (1931)  provides: 

"No  steam  engine  or  boiler  subject  to  the  pro- 
visions of  this  shapter  shall  be  used,  managed  or 
operated  in  the  city  of  Chicago,  except  by  an  en- 
gineer or  boiler  or  water  tender  as  provided  here- 
in, and  who  shall  have  been  duly  licensed  as  pro- 
vided herein,  and  who  shall  have  and  exhibit  a 
certificate  thereof. ' ' 

The  remainder  of  the  section  provides  penalties  for 
violation. 

The  act  of  the  Legislature  of  Illinois  empowering 
the  city  to  regulate  steam  boilers  provides : 

"That  the  city  council  in  cities,  and  the  presi- 
dent and  board  of  trustees  in  towns  and  villages, 
shall  have  power  to  adopt  ordinances  within  their 
respective  limits,  to  provide  for  the  examination, 


284 

licensing     and    regulations    of    persons    having 
charge  of  steam  boilers   under   steam  pressure, 
exhausting  through  an  engine,  to  fix  the  amount, 
terms   and  manner   of  issuing  and   revoking  li- 
censes to  such  persons;  to  provide  that  it  shall 
not  be  unlawful  for  any  person  to  exercise,  with- 
in the  limits  of  the  respective  cities,  towns  and 
villages  which  may   adopt   such   ordinances,   the 
business  of  operating  steam  boilers,  under  steam 
pressure,  exhausting  through  an  engine,  without 
a  license;  and  to  provide  that  any  person  violat- 
ing the  provisions  of  such  ordinances  shall  be  li- 
able to  a  penalty  for  each  breach  thereof. ' ' 
I  am  of  the  opinion,  therefore,  that  the  ordinance 
does  not  require  the  company  to  have  a  licensed  en- 
gineer under  the  circumstances  set  forth  in  its  com- 
munication. 

Section  10  (1932)  provides: 

"It  shall  be  the  duty  of  the  board  of  examiners 
to  see  that  each  boiler  plant  in  the  city  of  Chi- 
cago shall  have  a  licensed  engineer,  or  boiler  or 
water  tender,  or  both,  as  provided  herein,  in 
charge  at  all  times  when  working  under  pressure, 
whose  certificate  or  qualification  shall  be  dis- 
played in  a  conspicuous  place  in  the  engine  or 
boiler  room,  and  each  engineer  and  boiler  tender 
shall  devote  his  entire  time  while  boilers  are  work- 
ing under  pressure  to  the  duties  of  the  plant  under 
his  charge." 

Section  5  (1927)  provides  for  the  revocation  of  the 
license  of  the  engineer  "for  an  absence  from  his  post 
of  duty." 

I  am  of  the  opinion,  therefore,  that  inasmuch  as  the 
ordinance  provides  that  the  engineer,  while  the  boilers 
are  working  under  pressure,  "shall  be  in  charge  at 
all  times,"  and  that  he  shall  "devote  his  entire  time" 
and  that  his  license  shall  be  revoked  "for  an  absence 
from  his  post  of  duty,"  that  he  must  be  in  constant 
and  personal  attendance. 


285 


EIGHT  OF  COMMON  CARRIER  TO  BREAK  OPEN  PACKAGES 
FOB  THE  PURPOSE  OF  INSPECTING  GOODS  TO  ASCERTAIN 
IF  THEY  HAVE  BEEN  PROPERLY  CLASSIFIED. 

(Montgomery  Ward  &  Co.,  November  4,  1903.) 

"We,  among  other  shippers  of  Chicago,  have 
the  following  difficulty  to  contend  with  among  the 
railroads  centering  in  Chicago,  and  with  their 
lines : 

Boxes  and  cases  containing  merchandise  that 
we  deliver  to  the  railroad  companies  at  their 
freight  houses  are  being  daily  broken  into  by  in- 
spectors for  the  purpose  of  seeing  for  the  rail- 
road company's  satisfaction  if  the  contents  have 
been  given  the  proper  freight  classification.  We 
always  deliver  the  goods  to  the  railroad  com- 
pany's freight  house  with  a  prepaid  freight  re- 
ceipt on  which  the  goods  appear  properly  classi- 
fied, but  this  fact  is  overlooked,  apparently,  by 
the  railroad  company  accepting  the  consignment, 
and  their  own  inspection  is  devised  to  see  if  we 
have  classified  the  goods  correctly,  and  to  see  that 
no  goods  are  allowed  to  go  through  on  the  wrong 
classification  or  a  lower  rating. 

In  making  these  inspections  the  railroad  com- 
pany's inspectors  invariably  disturb  the  contents 
of  boxes  and  cases,  in  many  instances  loosening 
the  packing  so  that  the  fragile  articles  are  broken 
while  in  transit,  and,  again,  goods  have  been  ab- 
stracted, that  our  customers  have  complained 
about,  and  which  have  been  checked  by 
our  inspectors  and  packers  as  being  among 
the  goods  shipped;  for  instance,  an  empty 
shoe  box  was  received  by  our  customer 
packed  in  with  a  lot  of  other  goods,  and  our  in- 
spector and /packer  had  both  checked  the  article 
'in'  with  tile  other  goods, — a  thing  hardly  any 
sane  man  would  do  if  he  had  but  an  empty  shoe 
box  in  his  hand  and  an  invoice  calling  for  a  pair 
of  shoes  before  him. 


286 

We  question  the  right  of  the  railroad  companies 
to  open  these  boxes  and  cases  except  in  front  of 
either  the  shipper  or  consignee,  and  it  is  to  ob- 
tain an  opinion  regarding  the  legality  of  the  rail- 
road companies'  position  in  this  regard  that  we 
write  you ;  for  if  they  are  doing  this  without  right 
we  wish  to  be  one  among  others  to  take  steps  to 
stop  the  practice;  as  it  costs  us  considerably  an- 
nually in  the  way  of  duplicating  broken  and  miss- 
ing articles  that  can  be  accounted  for  in  no  other 
way  than  by  attributing  them  to  careless  or  dis- 
honest inspectors  hired  by  the  railroad  com- 
panies. ' ' 

The  carrier  has  no  right,  nor  is  it  his  duty  to  de- 
mand of  the  shipper  information  as  to  the  character 
or  quality  of  the  goods,  or  the  contents  of  packages,  of- 
fered for  shipment,  as  a  condition  of  his  accepting 
them. 

There  is  an  exception  in  the  case  of  the  shipment 
of  dangerous  articles,  such  as  explosives.  The  car- 
rier may  refuse  to  receive  packages  offered  to  him  un- 
less the  shipper  will  inform  him  of  their  contents, 
whenever  there  is  good  ground  for  believing  that  they 
contain  anything  of  a  dangerous  character.  But  it  is 
only  where  from  the  suspicious  appearance  of  the 
package  or  other  circumstances  tending  to  excite  sus- 
picion, the  carrier  believes  the  goods  are  of  a  danger- 
ous character  that  the  carrier  is  authorized  to  require 
a  knowledge  of  the  contents  of  packages  offered,  as  a 
condition  of  receiving  them  for  carriage. 
Hutchinson  on  Carrier,  Sec.  439. 
Crouch  v.  Railway  Co.,  23  L.  J.  C.  P.  (U.  S.) 

73. 

State  v.  Goss,  59  Vt.,  266. 
The  Nitro  Glycerine  Case,  15  Wall.,  524. 
Baldwin  v.  S.  S.  Co.,  74  N.  Y.,  125. 
Dinsmore  v.  R.  R.  Co.,  3  Fed.,  593. 
The  carrier,  therefore,  not  being  authorized  to  in- 
spect   the    goods    before    shipment    or    delivery,    a 
fortiori,  he  cannot  break  open  the  package  after  its 
receipt  for  the  purpose  of  inspecting  the  goods,  un- 


287 

less  there  is  an  agreement  permitting  the  carrier  to 
do  so. 

The  carrier,  however,  has  the  right  to  make  inquiry 
as  to  the  value  of  the  goods  shipped  for  the  purpose 
of  fixing  the  amount  of  his  charge  for  the  carriage 
and  of  ascertaining  the  amount  of  his  responsibility 
which  he  is  to  assume,  and  the  degree  of  the  care  he 
will  be  required  to  exercise  in  respect  to  them. 

I  am  not  unmindful  of  the  provision  (Section  10)  of 
the  interstate  commerce  Act,  which  provides  thus : 

"Any  .person  and  any  officer  or  agent  of  any 
corporation  or  company  who  shall  deliver  prop- 
erty for  transportation  to  any  common  carrier, 
subject  to  the  provision  of  this  act,  or  for  whom 
as  consignor  or  consignee  any  such  carrier  shall 
transport  property,  who  shall  knowingly  and  will- 
fully, by  false  billing,  false  classification,  false 
weighing,  false  representation  of  the  contents  of 
the  package,  or  false  report  of  weight  or  by  any 
other  device  or  means,  whether  with  or  without 
the  consent  or  connivance  of  the  carrier,  its  agent 
or  agents,  obtain  transportation  for  such  property 
at  less  than  the  regular  rates  then  established  and 
in  force  on  the  line  of  transportation,  shall  be 
deemed  guilty  of  fraud,  which  is  hereby  declared 
to  be  a  misdemeanor,  and  shall,  upon  conviction 
thereof  in  any  court  of  the  United  States  of  com- 
petent jurisdictoin  within  the  district  in  which 
such  offense  was  committed,  be  subject  for  each 
offense  to  a  fine  of  not  exceeding  five  thousand 
dollars  or  imprisonment  in  the  penitentiary  for 
a  term  of  not  exceeding  two  years,  or  both,  in  the 
discretion  of  the  court. ' ' 

I  do  not  express  any  opinion  as  to  the  right  of  the 
United  States  to  break  open  the  cases  for  the  pur- 
pose of  discovering  evidence  of  a  violation  of  the 
statute.  In  the  absence  of  a  controlling  decision  to 
the  contrary,  I  am  of  the  opinion  that  the  act  does 
not  give  the  carrier  the  right  to  break  open  packages. 


288 


THE  ILLINOIS  STATUTE  REQUIRING  A  SUIT  TO  BE  COM- 
MENCED WITHIN  ONE  YEAR  WHERE  DEATH  HAS  BEEN 
CAUSED  BY  WRONGFUL  ACT,  NEGLECT  OR  DEFAULT. 

(Mt.  Vernon  Car  Manufacturing  Company,  November 

21,  1903.) 

"I  would  like  to  ask  when  the  law  went  into 
effect  making  it  necessary  for  injured  employees 
to  begin  suit  within  one  year  from  the  date  of 
injury.  If  you  can  give  me  this  information,  also 
a  copy  of  the  law,  I  will  thank  you  for  the  favor. ' ' 
Section  1,  Chapter  70,  Hurd's  Bevised  Statutes  of 

1901  (p.  1002),  provides: 

"Whenever  the  death  of  a  person  shall  be 
caused  by  wrongful  act,  neglect  or  default,  and 
the  act,  neglect  or  default  is  such  as  would,  if 
death  had  not  ensued,  have  entitled  the  party  in- 
jured to  maintain  an  action  and  recover  damages 
in  respect  thereof,  then  and  in  every  such  case  the 
person  who  or  company  or  corporation  which 
would  have  been  liable  if  death  had  not  ensued 
shall  be  liable  to  an  action  for  damages,  notwith- 
standing the  death  of  the  person  injured,  and  al- 
though death  shall  have  been  caused  under  such 
circumstances  as  amount  in  law  to  felony." 
Section  2  of  the  act  was  amended  May  13,  1903  (in 

force  July  1,  1903),  so  as  to  read  as  follows: 

"Every  such  action  shall  be  brought  by  and  in 
the  names  of  the  personal  representatives  of  such 
deceased  person,  and  the  amount  recovered  in 
every  such  action  shall  be  for  the  exclusive  bene- 
fit of  the  widow  and  next  of  kin  of  such  deceased 
person,  and  shall  be  distributed  to  such  widow  and 
next  of  kin  in  the  proportion  provided  by  law.  In 
relation  to  the  distribution  of  personal  property 
left  by  persons  dying  intestate,  and  in  every  such 
action  the  jury  may  give  such  damages  as  they 
shall  deem  a  fair  and  just  compensation  with  ref- 
erence to  the  pecuniary  injuries  resulting  from 
such  death  to  the  wife  and  next  of  kin  of  such  de- 


289 

ceased  person  not  exceeding  the  sum  of  ten  thou- 
sand dollars:     Provided,  that  every  such  action 
shall  be  commenced  within  one  year   after   the 
death  of  such  person.    Provided,  further,  that  no 
action  shall  be  brought  or  prosecuted  in  this  state 
to  recover  damages  for  a  death  occurring  outside 
of  this  state,  and  that  the  increase  from  five  thou- 
sand to  ten  thousand  dollars  in  the  amount  there- 
by authorized  to  be  recovered  shall  apply  only  in 
cases  when  death  hereafter  occurs." 
It  will  be  seen,  therefore,  that  the  limitation  of  one 
year  only  applies  to  actions  for  causing  death.     The 
limitation  of  two  years  for  personal  injuries  is  still 
in  force. 


WHETHER  THE  INSTALLATION  OF  APPARATUS  AS  INCIDENTAL 
TO  THE  SALE  OF  THE  SAME  CONSTITUTES  DOING  BUSI- 
NESS WITHIN  THE  MEANING  OF  THE  FOREIGN  CORPORA- 
TION LAW  OF  INDIANA. 

(American  Foundry  and  Furnace  Company,  Novem- 
ber 21,  1903.) 

"It  seems  that  whether  or  not  w'e  should  com- 
ply with  the  Indiana  foreign  corporation  law  1901 
as  amended  March  9,  1901,  depends  entirely  upon 
particular  circumstances  of  our  business  transac- 
tions in  that  state.  We  therefore  submit  our 
method  of  operating  in  the  state  of  Indiana. 

We  are  engaged  in  the  manufacture  and  sale  of 
heating,  ventilating  and  sanitary  apparatus  for 
public  buildings.  In  Toledo,  Ohio,  we  have  a  sales 
agent  who  has  his  office  in  that  city.  The  Indiana 
territory  is  operated  from  that  point.  Our  To- 
ledo representative  visits  different  cities  in  Indi- 
ana and  obtains  contracts  for  furnishing  and  in- 
stalling in  public  school  buildings  heating,  venti- 
lating and  sanitary  apparatus.  This  apparatus 
is  generally  so  installed  in  the  building  as  to  be- 
come a  part  of  it.  We  furnish  from  our  Bloom- 
ington  (111.)  office  practically  all  of  the  material 


290 

which  is  used,  and  superintendents  are  sent  to  the 
town  where  order  is  taken,  work  completed 
and  paid  for.  We  have  no  agents  with  headquar- 
ters in  Indiana,  and  do  no  business  in  that  state 
except  as  above  described.  We  would  be  pleased 
to  have  you  advise  us  through  your  legal  depart- 
ment or  otherwise  whether  or  not  the  above  trans- 
action would  require  us  to  comply  with  the  Indi- 
ana statute  above  mentioned." 

I  assume  that  all  the  material  sold  is  shipped  from 
without  the  state  of  Indiana.  I  assume  also  that  the 
erection  and  installation  of  the  apparatus  is  not  the 
principal  business  of  the  company,  but  it  is  merely 
incidental  to  the  contract  of  sale.  The  transactions 
are  close  to  the  border  line  which  separate  interstate 
commerce  from  that  which  is  intra  state  or  domestic. 
Of  course,  a  merely  isolated  or  single  transaction  does 
not  constitute  doing  business.  I  am  inclined  to  the 
opinion,  however,  although  the  question  is  not  free 
from  doubt,  that  the  business  transacted  by  the  com- 
pany in  Indiana  is  interstate  commerce,  and  does  not 
subject  the  company  to  the  operation  of  the  foreign 
corporation  laws. 

Milan  Mill  &  Mfg.  Co.  v.  Gorton  (Term.),  26 

L.  E.  A.,  135. 
Caldwell  v.  No.  Carolina,  187  U.  S.,  622. 

NOTE: — See  also  the  opinion  of  March   11,   1904,  in  answer  to  the 
query  of  Barnard  &  Leas  Mfg.  Co.— Ed. 


LIABILITY  OF  THE   HIREE  OF  A  TEAM   FOR  INJURIES  CAUSED 
BY  THE  DRIVER  OF  SUCH  TEAM. 

(S.  A.  Maxwell  &  Co.,  November  24,  1903.) 
* '  The  Company  in  which  we  have  taken  out  our 
general  liability  policy  call  our  attention  to  the 
fact  that  this  policy  does  not  cover  the  operation 
of  teams.  The  following  is  an  extract  from  their 
letter : 

'Where  the  team  and  driver  is  delivered  to  the 
hirer  by  the  contractor,  the  driver  and  the  team 


291 

to  be  under  his  direction  and  control  for  his  sole 
use  in  his  business,  the  hirer  incurs  the  same  lia- 
bility as  if  the  team  and  driver  were  his  prop- 
erty and  employe.  This  is  well  established  law. ' 

The  largest  part  of  our  teaming  is  done  under 
contract  at  so  much  per  ton,  then  we  have  for 
city  deliveries  a  wagon  and  driver  for  which  we 
pay  so  much  per  day.  While  the  teaming  com- 
pany have  sent  us  for  some  time  the  same  driver, 
we,  however,  do  not  insist  upon  their  doing  so. 

We  would  like  to  have  the  opinion  of  Mr.  Levy 
Mayer  if  under  the  existing  conditions  wTe  are  li- 
able for  any  injuries  that  either  the  driver  of  the 
city  wagon  may  sustain  while  hauling  our  goods 
or  the  drivers  for  the  wagons  hauling  our  out- 
going freight  for  which  we  pay  so  much  per  ton. ' ' 
In  Pioneer  Construction  Co.  v.  Hansen,  176  111.,  100, 
the  court  said  (p.  108) : 

"He  is  the  master  who  has  the  choice,  control 
and  direction  of  the  servants.  The  master  re- 
mains liable  to  strangers  for  the  negligence  of 
his  servants,  unless  he  abandons  their  control  to 
the  hirer.  Control  of  servants  does  not  exist,  un- 
less the  hirer  has  the  right  to  discharge  them  and 
employ  others  in  their  places.  The  doctrine  of 
respondeat  superior  is  applicable  where  the  per- 
son sought  to  be  charged  has  the  right  to  control 
the  action  of  the  person  committing  the  injury. 
It  follows  that  the  right  to  control  the  negligent 
servant  is  the  test,  by  which  it  is  to  be  determined 
whether  the  relation  of  master  and  servants  ex- 
ists ;  and,  inasmuch  as  the  right  to  control  involves 
the  power  to  discharge,  the  relation  of  master  and 
servant  will  not  exist,  unless  the  power  to  dis- 
charge exists." 

In  N.  0.,  B.  R.  V.,  etc.,  v.  Norwood,  62  Miss.,  565, 
the  court  said  (p.  569) : 

"In  the  application  of  these  supposed  tests  to 
particular  cases,  great  confusion  and  conflict  of 
authority  has  arisen,  but  amid  it  all  there  seems 
to  be  a  class  of  cases  in  which  there  has  been  uni- 


292 

formity  of  decision,  and  to  this  class  the  case  be- 
fore us  is   obviously  assignable.     The  cases  re- 
ferred to  are  those  in  which  a  person  hires  the 
personal  property  of  another  and  that  other  sup- 
plies, also  under  the  contract  of  hiring  the  servant 
who  is  charged  with  the  general  management  and 
control  of  the  property,  in  which  cases,  though  the 
hirer   acquires  to  a   limited   degree   a   dominion 
over  the  servant,  with  a  right  to  superintend  and 
direct  his  conduct,  he  still  in  legal  contemplation 
continues  the  servant  of  the  owner,  who  is  re- 
sponsible for  his  negligence,  though  it  occurs  in 
the  performance  of  that  work  which  he  does  for 
the  hirer  and  in  which  the  hirer  alone  is  inter- 
ested.    As  where  one  hires  horses  and  a  driver 
from  a  jobman  to  draw  his  carriage,  the  owner 
and  not  the  hirer  is  liable  for  negligence  of  the 
driver.    Dean  v.  Braithwaite,  5  Esp.,  35 ;  Samuel 
v.  Wright,  Ib.,  262 ;  Laugher  v.  Pointer,  5  B.  &  C., 
311;  Quarman  v.  Burnett,  6  Mee  &  W.,  499.    Or 
where  one  sends  his  team,  wagon  and  driver  to 
work  for  a  neighbor.    Michael  v.  Stanton,  10  N.  Y., 
462.    Or  where  a  vessel  and  crew  are  chartered  by 
the  day  or  for  a  voyage,  the  crew  are  the  serv- 
ants of  the  owner,  even  though  as  a  part  of  the 
contract  the  hirer  is  to  pay  the  owner  the  wages 
of  the  crew.    Daly  ell  v.  Tyrer,  EL  Bl.  &  EL,  899; 
Fenton  v.  Dublin  Packing  Co.,  8  A.  &  E.,  835." 
In  Quinn  v.  Electric  Co.,  46  Fed.,  505,  the  plaintiff 
was   injured   by   a   horse    and   truck   driven   by   one 
Murphy.     Under  a  contract  the  defendant  furnished 
to  the  Western  Electric  Co.  a  horse,  truck  and  driver 
daily  to  do  its  trucking  work  at  a  specified  price,  the 
defendant  selecting  the  team  and  driver  which  were 
to  be  at  the  disposition  of  the  Western  Electric  Co., 
in  whose  service  the  team  and  driver  were  at  the  time 
of  injury.    The  court  said  (p.  507) : 

1  i  Under  these  circumstances,  although  the  West- 
ern Electric  Company  was  the  primary  employer 
for  whom  the  service  which  Murphy  was  engaged 
in  was  being  rendered,  the  defendant  was 


293 

Murphy's  immediate  superior.  It  had  hired  him, 
and  could  discharge  or  retain  him,  and  thus  had 
the  selection  and  control  of  the  means  of  accomp- 
lishing the  object  of  the  contract  which  had  been 
made  between  the  Western  Electric  Company  and 
itself.  The  defendant  was  not  the  servant  or  agent 
of  the  Western  Electric  Company,  but  was  an  in- 
dependent contractor;  hence  those  employed  by 
the  defendant  to  do  the  work  contracted  for  were 
its  servants,  and  not  those  of  the  Western  Electric 
Company.  (Citing  cases.) 

The  rule  of  the  respondeat  superior  rests  on 
the  power  which  the  superior  has  a  right  to  ex- 
ercise, and  which,  for  the  protection  of  third  per- 
sons, is  bound  to  exercise  over  the  acts  of  his  sub- 
ordinates. It  does  not  apply  to  cases  where  the 
power  of  control  does  not  exist,  and  the  power 
does  not  exist  when  the  primary  employer  has  no 
voice  in  the  selection  or  retention  of  the  subordi- 
nate." 

In  1  Shearman  &  Eedfield  on  Negligence  (5th  Ed.), 
Sec.  162,  the  doctrine  is  summoned  up  as  follows : 

"The  master  who  hires  out  one  of  his  servants 
to  work  for  another  person  is  liable  to  the  hirer 
for  such  servant's  negligence  in  the  work  and  this 
even  though  the  particular  servant  was  selected 
by  the  hirer  himself,  and  unless  master  abandons 
the  entire  control  of  his  servants  to  the  hirer  he 
remains  liable  to  strangers  for  their  negligence. 
The  hirer  cannot  properly  be  said  to  have  control 
of  the  servants,  unless  he  has  the  right  to  dis- 
charge them  and  employ  others  in  their  places  in 
case  of  their  misconduct  or  incapacity ;  that  being 
the  only  practical  means  by  which  free  servants 
can  be  controlled.  If,  therefore,  the  hirer  has  no 
power,  he  is  not  responsible  to  any  one  for  the 
faults  of  the  servants.  If  the  hirer  is  vested  for 
the  time  with  exclusive  control  with  the  right  to 
discharge  the  servants  and  to  employ  others,  he 
alone  is  responsible  for  their  defaults.  Where 
a  person  hires  the  personal  property  of  another, 


294 

who  supplies,  under  the  contract  a  servant  charged 
with  the  general  management  and  control  of  the 
property,  although  the  hirer  acquires  to  a  limited 
degree,  a  dominion  over  the  servant,  with  a  right 
to  superintend  and  direct  his  conduct,  the  latter 
still  continues  the  servant  of  the  owner  who  is  re- 
sponsible for  his  negligence,  though  it  occurs  in 
the  performance  of  work  in  which  the  hirer  alone 
is  interested." 
To  the  same  effect  see: 

Consolidated  Fireworks  Co.  v.  Koehl,  190  111., 

145. 

Laugher  v.  Pointer,  5  Barn.  &  C.,  560. 
Quarman  v.  Burnett,  6  Mees.  &  W.,  497. 
Jones  v.  Mayor,  14  Q.  B.  Div.,  890. 
Michael  v.  Stanton,  3  Hun.,  462. 
Fenton  v.  Steam  Packet  Co.,  8  Adol.  £  E.,  835. 
Dalyell  v.  Tyrer,  28  L.  J.  Q.  B.,  52. 
Coyl  v.  Pierrepont,  37  Hun.,  379. 
Under  the  facts  set  forth  in  the  letter  of  the  Max- 
well Company  (the  hirer)  there  is  no  liability  on  the 
part  of  the  hirer  for  injuries  caused  by  the  operation 
of  the  teams  hired  by  it. 

There  can  be  no  liability  unless  the  drivers  can  be 
considered  as  the  servants  of  the  hirer.  The  drivers 
are  not  selected  by  the  hirer,  nor  has  he  the  right  to 
discharge  them.  These  elements  are  essential  to  the 
existence  of  the  relationship  of  master  and  servant  and 
unless  that  relationship  exists,  persons  injured  by  the 
operation  of  teams  under  the  circumstances  hereinbe- 
fore referred  to,  must  look  to  the  contractor  who  em- 
ploys the  driver  and  not  the  hirer.  It  is  true  the  hirer 
acquires  to  a  limited  degree  the  right  to  control  the 
driver,  but  the  latter  is  still  the  servant  of  the  owner. 
To  hold  the  hirer  liable  the  contractor  must  abandon 
the  entire  control  of  his  servants  to  the  hirer,  so  that 
they  become  in  effect  his  servants. 


295 


THE  VALIDITY  OF  AN  EMPLOYMENT  CONTRACT  AND  THE 
CONSTITUTIONALITY  OF  THE  ILLINOIS  STATUTE  OF  1903 
REGULATING  THE  PAYMENT  OF  WAGES  BY  CORPORATIONS. 

(Dillon-Griswold  Wire  Co.,  November  24, 1903.) 

"Herewith  enclosed  is  a  copy  of  a  form  of 
agreement  which  this  company  has  been  for  years 
requiring  its  employes  to  sign  before  entering  into 
service.  The  binding  force  of  the  agreement  in 
several,  if  not  all  parts,  has  frequently  been  called 
into  question.  We  would  like  to  have  you  refer 
the  form  of  agreement  to  Mr.  Levy  Mayer,  general 
counsel,  as  to  whether  the  same  is  legal  and  can 
be  enforced  by  us.  It  is  said  that  a  portion  at 
least  of  the  contract  is  in  conflict  with  a  law 
passed  by  the  last  Illinois  legislature,  which  took 
effect  July  1,  1903,  subjecting  the  employer  to  a 
fine  of  $200  if  he  should  attempt  to  retain  any 
portion  of  the  employe's  wages  on  account  of  the 
employe  leaving  without  notice.  If  this  is  the 
case,  we  fail  to  see  how  the  employer  is  going  to 
be  protected  against  labor  tramps  who  are  con- 
stantly going  about  seeking  a  few  days '  work  with- 
out any  intention  of  rendering  permanent  serv- 
ice. ' ' 
The  agreement  enclosed  is  as  follows: 

"!N  CONSIDERATION  of  the  Dillon-Griswold  Wire 
Company  having  employed  me  to  work  for  it  at 
Sterling,  111.,  at  the  rate  of  wages  set  opposite  my 
name  hereto  by  me  subscribed  on  the  terms  here- 
inafter stated,  I  hereby  agree  to  work  for  said 
company,  according  to  its  rules  and  regulations, 
for  one  month  or  more,  for  such  rate  of  wages, 
and  that  I  will  not  assign  my  wages  or  quit  such 
employment  without  giving  said  company  two 
weeks '  previous  notice.  And  for  the  consideration 
aforesaid,  I  further  agree  that  if  I  fail  to  keep  this 
agreement,  or  am  discharged  from  such  employ- 
ment for  cause,  I  shall  receive  but  four-fifths  of  the 
wages  which  would  otherwise  be  due  to  me,  it  be- 


296 

ing  stipulated  and  agreed  that  in  such  case  one- 
fifth  of  such  wages  then  due,  according  to  the  said 
rate,  is  but  reasonable  damage  to  said  company, 
to  be  retained  by  it.  And  for  the  consideration 
aforesaid,  I  further  agree,  that  if  I  shall  violate 
this  agreement,  or  any  of  the  rules  or  regulations 
of  said  company,  such  violation  shall  be  lawful 
cause  for  my  discharge  and  I  may  be  discharged 
from  such  employment  for  such  lawful  cause  and 
without  notice. 

"This  agreement  is  a  several  contract  between 
myself  and  said  company,  although  other  names 
are  subscribed  hereto  above  or  below  my  name; 
and  the  same  has  been  explained  to,  and  is  fully 
understood  by  me. 

'  *  It  is  further  agreed  that  I  do  not  belong  to  any 
labor  association  or  union,  and  that  I  will  not  join 
the  same  without  giving  this  company  ten  days' 
notice. 

"And  for  the  consideration  aforesaid,  I  further 
agree  to  the  company's  regular  semi-monthly  pay 
days. ' ' 

There  are  two  questions  involved — one  as  to  the  con- 
stitutionality of  the  act  of  the  Legislature  of  Illinois, 
May  14,  1903,  regulating  the  payment  by  corporations 
of  wages  of  their  employes.  As  I  stated  in  an  opinion 
of  very  recent  date  to  Parlin  &  Orendorff  Co.  that  act 
can  not  legally  or  constitutionally  apply  to  a  contract 
entered  into  between  employer  and  employe,  which  pro- 
vides for  the  withholding  of  the  wages  of  employes  for 
a  fixed  period  to  be  paid  in  the  future  to  such  employes^ 
provided  certain  conditions  are  complied  with.  In 
other  words,  adult  employers  and  employes  have  the 
legal  right  to  contract  for  the  sale  and  purchase  of  ser- 
vices or  labor,  the  same  as  they  have  with  reference  to 
the  sale  or  purchase  of  merchandise  or  other  property. 
Labor,  as  I  have  often  said  in  opinions  to  the  Associa- 
tion, is  property,  and  is  so  regarded  by  the  courts  when 
applying  to  labor  the  constitutional  limitations  which 
restrict  legislative  power.  If,  therefore,  it  be  at- 
tempted to  apply  the  act  of  May  14,  1903,  to  the  given 


297 

case,  the  courts  will,  in  my  opinion,  hold  it  unconsti- 
tutional. . 

The  other  and  more  serious  question  involved  is 
this — is  the  agreement  under  consideration  a  contract 
—that  is  to  say,  an  agreement  legally  binding  on  both 
parties!  It  is  patent  that  the  parties  to  the  agreement 
intend  to  make  a  legally  binding  contract.  The  diffi- 
culty, however,  that  presents  itself  is  the  doubt  as  to 
whether  the  contract  is  mutual.  If  it  is  not  mutual 
and  is  binding  only  on  one  party,  no  action  can  be 
maintained  on  it  for  its  breach  by  either  party. 

A  careful  examination  of  the  agreement  leaves 
serious  uncertainty  as  to  whether  the  Dillon-Griswold 
Wire  Company  binds  itself  to  do  anything.  True,  it 
recites  that  "in  consideration  of  the  Dillon-Griswold 
Wire  Company  having  employed  me  to  work  for  it," 
etc.  There  is,  however,  in  the  agreement  no  positive 
undertaking  on  the  part  of  the  wire  company  to  em- 
ploy. It  has  been  frequently  decided  by  the  courts 
that  unless  there  is  a  promise  by  the  employer  to  em- 
ploye, the  promises  of  the  employe  will  be  without  cor- 
responding obligations  on  the  part  of  the  employer, 
and  will  not  be  binding. 

In  an  opinion  which  I  gave  on  May  14,  1903,  to  the 
Kinley  Manufacturing  Company  the  question  involved 
covered  an  agreement  which  read  this  way :  "In  con- 
sideration of  my  receiving  employment  by  E.  E.  Wag- 
ner Manufacturing  Company  and  in  further  consider- 
ation of  the  fact  that  it  takes  a  full  weeks'  time  after 
employment  to  work  for  the  company  to  advantage 
I  hereby  agree,"  etc.  My  opinion  on  that  agreement 
was  that  it  was  unilateral  and  therefore  not  binding 
on  either  party  to  it. 

The  language  of  the  Wire  Company  agreement  is 
in  some  respects  much  stronger  than  is  the  language 
of  the  Kinley  Manufacturing  Company  agreement.  I 
can  see  forcible  arguments  that  can  be  advanced  in 
support  of  the  proposition  that  the  courts  would  read 
mutuality  into  the  Wire  Company  agreement.  In  view, 
however,  of  the  decision  of  the  Supreme  Court  in 
Vogel  v.  Pekoe,  157  111.,  339,  I  am  inclined  to  the  opin- 


298 

ion  (particularly  on  account  of  the  existing  tendency 
of  the  courts  against  agreements  of  the  kind  in  ques- 
tion) that  the  agreement  under  consideration  will  prob- 
ably be  held  unilateral  and  therefore  not  binding. 

I  would  advise  that  it  be  so  changed  as  to  make  it 
mutual. 

Practically  all  of  the  questions  propounded  by  the 
Wire  Company,  with  the  exception  of  that  as  to  the 
constitutionality  of  the  act  of  May  14,  1903,  are  cov- 
ered by  my  opinion  of  May  14,  1903,  to  the  Kinley 
Manufacturing  Company,  to  which  I  refer  for  a  further 
statement  of  my  views. 


LIABILITY    OF    A    CARRIER    FOR    GOODS    FROZEN    IN    TRANSIT 
WHEN   DELIVERY  IS  DELAYED. 

(Ernest  Tosetti  Brewing  Company,  January  22,  1904.) 
"Will  you  kindly  favor  us  with  the  opinion  of 
Attorney  Levy  Mayer  regarding  the  contention  of 
the  Chicago  Junction  Railway  Company  in  re- 
sponse to  a  claim  made  by  us  for  beer  frozen  while 
in  transit,  as  follows: 

"On  Friday,  the  llth  inst.,  at  4:30  o'clock,  we 
shipped  a  car  of  bottled  beer  to  LaGrange,  111. 
The  Chicago  Junction  Eailway  Company,  not 
possessing  any  refrigerator  cars,  we  were  com- 
pelled to  ship  in  an  ordinary  box  car,  in  conse- 
quence a  salamander  was  placed  in  the  car  and 
the  car  thoroughly  heated,  before  leaving.  In  ad- 
dition to  this,  the  cases  of  beer  were  well  covered 
with  shavings.  These  precautions  would  have 
been  sufficient  to  prevent  freezing  almost  under  the 
most  severe  cold  weather  provided  the  car  had 
been  delivered  at  the  proper  time.  However,  in- 
stead of  the  car  arriving  at  its  destination  upon 
the  following  morning  (Saturday)  which  is  the 
usual  or  schedule  time  of  arrival,  it  did  not  arrive 
until  Sunday  afternoon  at  2:30  o'clock.  The  car 
was  immediately  unloaded  and  a  part  of  the  con- 
tents were  found  frozen. 


;  299 

"On  Saturday  morning,  we  received  word  from 
our  LaGrange  branch  that  the  car  had  not  arrived. 
We  investigated  the  matter  and  found  that  the  car 
was  still  in  the  C.  J.  yards  and  had  not  left  the 
evening  previous  as  was  customary.  We  there- 
fore called  up  Mr.  O'Brien,  the  assistant  super- 
intendent, on  the  telephone  and  informed  him  of 
the  situation.  He  stated  that  the  car  would  be 
sent  on  at  once;  however,  it  did  not  arrive  until 
the  following  afternoon,  as  stated  above. 

"We,  on  the  15th  inst.,  filed  a  claim  with  the 
railroad  company  for  damages  amounting  to 
$166.60,  and  in  reply  to  same  received  from  the 
railroad  company  the  following : 

"  'Replying  to  your  letter  of  the  15th  inst.  and 
returning  your  bill  for  $166.60  covering  alleged 
loss  of  beer  contained  in  C.  J.  car  1078  by  frost, 
I  have  to  advise  that  this  company  will  not  as- 
sume responsibility  for  loss  or  damages  to  freight 
by  freezing  when  it  is  loaded  in  box  cars  and  your 
claim  is  respectfully  declined  ? '  " 
You  state  in  reference  to  the  manner  of  packing : 
"These  precautions  would  have  been  sufficient  to  pre- 
vent freezing  almost  under  the  most  severe  weather 
provided  the  car  had  been  delivered  at  the  proper 
time."    I  assume  this  to  be  true,  and  that  the  railroad 
company  had  notice  of  and  acquesced  in  the  precau- 
tions taken. 

The  carrier  is  an  insurer  against  all  loss  except  that 
caused  by  the  act  of  God,  or  the  public  enemy. 
C.  SN.  W.  R.  R.  v.  Sawer,  69  111.,  285. 
Where  perishable  merchandise  is  exposed  to  varia- 
tions of  temperature  the  consequent  injury  is  not  at- 
tributable to  the  act  of  God. 

Where  a  carrier  accepts  goods  with  a  full  knowl- 
edge that  they  are  expected  to  be  delivered  by  a  cer- 
tain time,  he  assumes  the  liability  for  delivering  them 
in  time,  or  showing  that  he  used  every  reasonable  ef- 
fort to  make  the  delivery.  Where  he  expressly  agrees 
to  deliver  them  by  a  specified  time,  not  even  unavoid- 
able accident  will  excuse  the  delay. 


300 

C.  &  A.  R.  R.  Co.  v.  Thrapp,  5  111.  App.,  502. 
R.  I.  &  Peoria  R.  R.  Co.  v.  Porter,  36  111.  App., 

590. 

I.  C.  R.  R.  Co.  v.  Waters,  41  111.,  73. 
But  personal  neglect,  or  misconduct  of  the  shipper, 
will  excuse  the  carrier  from  liability  for  delay. 
/.  C.  R.  R.  Co.  v.  McClellan,  54  111.,  58. 
Notwithstanding  a  provision  in  a  bill  of  lading  that 
the  carrier  shall  not  be  responsible  for  "damage  to 
perishable  property  of  any  kind,  occasioned  by  delays 
from  any  cause,"  the  carrier  becomes  liable  for  delay 
as  the  result  of  actual  negligence. 

Wabash  R.  R.  Co.  v.  Jaggerman,  115  111.,  406. 
However,  proof  of  delay  merely  is  not  sufficient  to 
show  negligence  on  the  part  of  the  carrier. 

If  all  the  facts  have  been  submitted  to  me,  it  is  my 
opinion  that  the  facts  justify  a  suit  and  that  the  case, 
if  properly  presented,  will  result  favorably  to  the 
Tosetti  Brewing  Company. 


LIABILITY  FOB  CANCELLING  AN  ORDER  FOR  GOODS  AFTER  IT 
HAS  BEEN  ACCEPTED  AND  THE  MEASURE  OF  DAMAGES  IN 
RESPECT  THERETO. 

(Sturges  &  Burri  Manufacturing  Company,  January 

22,  1904.) 

"A  commission  salesman  of  ours  sold  to  a  firm 
in  Canada,  two  cars  of  scaleboards,  for  shipment 
four  months  hence.  The  buyers  gave  a  written 
order  specifying  price,  terms,  quantity  and  dates 
of  shipment.  The  order  was  mailed  to  us  and 
upon  receipt  we  promptly  acknowledged  it  and 
sent  it  forward  to  the  factory  who  makes  these 
boards,  we  taking  their  output. 

"As  soon  as  the  factory  received  the  order  for 
the  two  cars  they  purchased  the  raw  material  from 
which  to  make  them.  A  month  later  we  received 
a  letter  from  the  purchasers,  reading  as  follows: 

11  'Some  weeks  ago  we  ordered  through  your 
agent  two  cars  of  scaleboards.  We  have  made 


301 

Bother  arrangements  for  same,  so  you  will  cancel 
our  order.    Yours  respectfully, 

(Signed)  * ' 

"We  have  since  learned  that  the  reason  for  can- 
celling was  due  to  their  having  received  a  lower 
price  from  another  maker,  after  the  order  had 
been  placed  with  us,  and  while  we  have  expressed 
a  willingness,  without  prejudice  to  our  rights,  un- 
der the  contract,  to  meet  the  price,  they  still  re- 
fuse to  allow  us  to  furnish  the  goods,  on  the 
ground  that  they  have  made  other  arrangements. 
"The  salesman,  who  travels  on  commission, 
takes  the  stand  that  he  spent  his  money  in  secur- 
ing the  business,  and  is  entitled  to  the  commis- 
sion. On  the  other  hand  the  scaleboard  factory, 
with  whom  we  placed  the  order,  contends  that  they 
have  purchased  the  logs  from  which  to  make  these 
and  they  naturally  expect  us  to  take  them,  and 
what  we  wish  to  know  is,  can  we  legally  compel 
them  (the  purchasers)  to  carry  out  the  terms  of 
the  contract — that  is,  accept  the  two  cars  and  pay 
for  them!" 
I  reply  as  follows: 

(a)  Your  contract  with  the  Canadian  firm  is  valid, 
and  you  have  an  action  at  law  for  their  breach  of  it. 
The  measure  of  damages  is  the  difference  between  the 
contract  price  and  the  cost  of  supplying  them  with  the 
scaleboards. 

Roehm  v.  Horst,  178  U.  S.,  1,  21. 
Hinckley  v.  Pittsburg  Steel  Co.,  121  U.  S.,  265, 
276. 

(b)  The  question  of  commission  to  your  salesman 
is  governed  by  your  contract  with  him.    On  the  facts 

given  he  is  entitled  to  his  commission. 

(c)  You  are  liable  to  the  scaleboard  factory  in  dam- 
ages for  a  breach  of  your  contract  with  them.     The 
measure  'of  damages  is  the  same  as  already  given. 


302 


LIABILITY  TINDER  THE  NEW  YORK  STATUTE  PROHIBITING 
THE  USE  OF  THE  NAME,  PHOTOGRAPH  OR  PICTURE  OF 
ANY  PERSON  FOR  ADVERTISING  PURPOSES  WITHOUT  THE 
CONSENT  OF  SUCH  PERSON,  AND  AS  TO  WHETHER  AN 
ACTION  CAN  BE  SUSTAINED  IN  ILLINOIS. 

(Osgood  Company,  January  22,  1904.) 

"Enclosed  we  hand  you  a  copy  of  one  of  the  laws 
of  the  State  of  New  York  entitled  'An  act  to  pre- 
vent the  unauthorized  use  of  the  name  or  picture 
of  any  person  for  the  purpose  of  trade. ' 

"We  would  like  to  have  Mr.  Mayer's  opinion 
in  regard  to  the  liability  under  this  law  for  using 
faces  from  copyrighted  photographs  if  the  matter 
is  printed  and  circulated  from  the  State  of  Illi- 
nois. In  other  words,  if  a  mail  order  house  should 
issue  a  catalog  using  photograph  faces  circulat- 
ing same  from  the  State  of  Illinois,  would  they 
be  liable  for  damages  under  this  law?" 
The  law  in  question  provides : 

"AN  ACT  TO  PREVENT  THE  UNAUTHORIZED  USE 
OF  THE  NAME  OR  PICTURE  OF  ANY  PERSON  FOR  THE 
PURPOSE  OF  TRADE. 

"Section  1.  A  person,  firm,  or  corporation  that 
uses  for  advertising  purposes,  or  for  the  purpose 
of  trade,  the  name,  portrait  or  picture  of  any  liv- 
ing person  without  having  first  obtained  the  writ- 
ten consent  of  such  person,  or  if  a  minor,  of  his 
or  her  parent  or  guardian,  is  guilty  of  a  mis- 
demeanor. 

"2.  Any  person  whose  name,  portrait  is  used 
within  this  State  for  advertising  purposes  or  for 
the  purpose  of  trade  without  the  written  consent 
first  obtained  as  above  provided,  may  maintain 
an  equitable  action  in  the  Supreme  Court  of  this 
State  against  the  person,  firm  or  corporation  so 
using  his  name,  portrait  or  picture,  to  prevent 
and  restrain  the  use  thereof;  and  may  also  sue 
and  recover  damages  for  any  injuries  sustained 
by  reason  of  such  use,  and  if  the  defendant  shall 


303 

have  knowingly  used  such  person's  name,  picture 
or  portrait  in  such  manner  as  is  forbidden  or  de- 
clared to  be  unlawful  by  this  act,  the  jury,  in  its 
discretion,  may  award  exemplary  damages. 

"3.     This  act  shall  take  effect  September  1st, 
nineteen  hundred  and  three. ' ' 

The  questions  asked  are  as  interesting  as  they  are 
difficult  of  solution.  My  opinion  is  as  follows: 

I.  Section  1,  which  makes  the  alleged  wrongdoer 
guilty  of  a  misdemeanor,  is  not  enforcible  in  Illinois. 
One  State  can  not  enforce  the  criminal  or  penal  laws 
of  another.     Such  laws  have  no  extraterritorial  force. 

Rorer  on  Interstate  Law,  2nd  Ed.,  308. 
The  Antelope,  10  Wheaton  (U.  S.),  66,  123. 
Wisconsin  v.  Insurance  Co.,  127  U.  S.,  290. 
Indiana  v.  Oil  Co.,  85  Fed.,  873. 
Attrill  v.  Huntington,  146  U.  S.,  657. 
12  Am.  St.  Rep.,  351,  note. 

II.  An  injunction  cannot  be  maintained  in  Illinois 
to  enforce  the  New  York  statute.    The  specific  remedy 
provided  by  the  law  will  not  be  applied  to  Illinois. 
It  is  a  principle  well  recognized  that  laws  have  no  ex- 
tra-territorial force.   Their  authority  is  limited  to  the 
territorial  jurisdiction  of  the  State  that  enacts  them. 

C.  &  E.  I.  R.  R.  Vo.  v.  Rouse,  178  111.,  132,  137. 
Rorer  on  Interstate  Law,  2nd  Ed.,  226,  227. 
Pennoyer  v.  Neff,  95  U.  S.,  714. 
Blanchard  v.  Russell,  13  Mass.,  1. 
Cleveland,  etc.,  R.  R.  v.  Penn,  15  Wall.,  300. 
Hill  v.  Wright  (Mass.). 
State  v.  Bunce,  65  Mo.,  349. 

III.  The  law  is  violated  if  any  person  uses  the 
name,  portrait  or  picture  of  any  living  person  for  ad- 
vertising purposes  or  for  the  purposes  of  trade,  with- 
out having  first  obtained  the  written  consent  of  such 
person.    It  is  not  necessary  that  the  law  be  knowingly 
violated,   but   if  it   is,    exemplary   damages   may   be 
awarded. 

In  determining  whether  or  not  the  acts  set  forth  in 
the  letter  of  the  Osgood  Company  are  a  violation  of 
the  law  under  consideration,  I  assume  that  the  com- 


304 

pany  has  used  the  name,  portrait  or  picture  of  another 
for  advertising  purposes,  or  for  the  purpose  of  trade, 
without  the  written  consent  of  such  person,  and  that 
the  question  to  be  determined  is  whether  or  not  the 
printing  in  and  circulation  from  this  State  of  a  cata- 
logue containing  such  name  or  portrait  is  a  violation 
of  the  law.  I  presume  the  catalogues  are  sent  by  mail 
to  various  persons  in  New  York.  The  law  provides 
that  the  name  or  portrait  must  be  "used  within"  the 
State  of  New  York,  and  that  any  person  may  recover 
damages  for  injuries  sustained  by  reason  of  "such 
use."  Is  the  name  or  portrait  "used  within"  the 
State  of  New  York? 

"Use"  is  denned  in  the  Century  Dictionary  as  "the 
act  of  employing  anything,  or  the  state  of  being  em- 
ployed ;  employment ;  application ;  conversion  to  a  pur- 
pose, especially  a  profitable  purpose."  "To  employ 
for  the  attainment  of  some  purpose  or  end ;  avail  one 's 
self  of."  I  am  of  the  opinion  that  the  circulation  of 
catalogues  from  this  State,  as  above  set  forth,  is  a 
violation  in  New  York  of  the  law  in  question. 

The  question  remains,  therefore,  whether  or  not  the 
courts  of  Illinois  will  enforce  the  specific  remedy  of 
the  statute  of  New  York.  The  courts  of  one  State  will 
not,  as  already  stated,  enforce  the  penal  or  criminal 
laws  of  another  State. 

Is  the  present  law  penal  in  its  nature?  Penal  laws 
are  those  which  impose  punishment  for  an  offense 
committed  against  the  State.  The  test  whether  a  law 
is  penal  is  whether  the  wrong  sought  to  be  redressed 
is  a  wrong  to  the  public,  or  a  wrong  to  the  individual. 
Crimes  and  offenses  against  the  laws  of  any  State  can 
only  be  prosecuted  by  the  sovereign  authorities  of  that 
State.  Section  1  of  the  law  in  question  is  clearly 
criminal.  A  penal  law  may  also  be  remedial  or  may 
be  penal  in  one  part  and  remedial  in  another. 

Sutherland  on  Statutory  Construction,   Sec. 

208. 
Bell  v.  Farrell,  176  111.,  489,  496. 

Section  2  of  the  law  under  consideration  is  intended 
to  extend  a  remedy  for  a  civil  injury,  and  not  to  pun- 


305 

ish  a  wrong  to  the  public.  It  is  not,  therefore,  of  a 
penal  nature,  even  though  the  wrongs  committed  also 
constitute  a  misdemeanor  under  Section  1. 

There  is  no  statute  similar  to  the  New  York  statute 
in  force  in  this  State.  In  order  to  maintain  an  action 
for  an  injury  to  the  person  committed  in  another 
State,  some  courts  have  held  that  the  wrong  must  be 
one  which  would  be  actionable  also  in  the  State  where 
the  suit  is  brought,  as  well  as  in  the  State  where  the 
injury  is  committed. 

Huntington  v.  Attrill,  146  U.  S.,  657,  670,  and 
cases  cited. 

But  the  weight  of  authority  is  to  the  effect  that  the 
courts  of  a  State  have  jurisdiction  by  comity  of  a  right 
of  action  given  by  a  statute  of  another  State  for  a 
tort  or  a  civil  injury  of  a  transitory  nature,  committed 
in  such  State,  even  though  at  common  law  no  such  right 
of  action  existed,  and  even  though  there  is  no  similar 
statute  in  the  State,  where  the  action  is  instituted. 
Personal  injuries  are  of  a  transitory  nature  as  dis- 
tinguisjied  from  crimes  and  offenses  and  actions  re- 
lating to  land,  and  sequuntur  forum  rei.  This  doctrine 
has  recently  been  followed  by  the  Supreme  Court  of 
Illinois : 

C.  &  E.  I.  R.  R.  Co.  v.  Rouse,  178  111.,  132. 

See  also : 

Hanna  v.  Grand  Trunk,  41  111.  App.,  116. 

Eights  of  action  based  upon  a  statute  of  a  foreign 
State  will  not,  however,  be  enforced  here  if  against 
good  morals,  public  policy,  natural  justice,  or  the  gen- 
eral interest  of  the  citizens  of  the  State. 

C.  &  E.  I.  R.  R.  Co.  v.  Rouse,  supra. 

There  is  nothing  in  the  enforcement  of  the  present 
law  against  good  morals,  public  policy,  natural  jus- 
tice, or  the  general  interest  of  the  citizens  of  this  State, 
and  in  my  opinion  an  action  for  damages  will  probably 
be  sustained  in  this  State  for  a  violation  of  the  New 
York  statute. 


306 


THE  LIABILITY  OF  A  TRANSPORTATION  COMPANY  FOR  GOODS 
DESTROYED  IN  WAREHOUSE  AFTER  ARRIVAL  AT  DESTINA- 
TION. 

• 

(D.  B.  Scully  Syrup  Company,  January  22,  1904.) 

"As  members  of  your  association  we  would  ask 
you  to  kindly  obtain  Mr.  Levy  Mayer's  opinion 
as  to  the  liability  of  a  transportation  company  un- 
der the  following  circumstances : 

Supposing  that  we  ship  a  pooled  car  of  goods 
to  any  stated  point,  consigned  to  our  agent  at  that 
point;  these  goods  are  unloaded  at  destination  by 
the  transportation  company  into  their  warehouse 
or  docks ;  and  this  warehouse  or  dock  is  destroyed 
by  fire  before  the  various  consignees  have  had  any 
chance  to  remove  the  goods,  is  not  the  transporta- 
tion company  liable  to  us  for  the  full  invoice  price 
of  the  same?     It  is  customary  on  the  arrival  of 
goods  at  any  point  for  all  transportation  com- 
panies to  send  out  notices  to  the  consignees,  giv- 
ing them  from  twenty-four  to  forty-eight  hours 
in  which  to  remove  the  goods.    As  we  understand 
it,  until  the  expiration  of  the  twenty-four  or  forty- 
eight  hours  mentioned  above,  the  transportation 
company  is  responsible  for  goods  in  their  care, 
just  as  much  as  a  storage  warehouse  would  be." 
The  matter  is  covered  by  my  opinion  to  the  associa- 
tion under  date  of  December  30,  1902,  in  answer  to 
the  query  of  Roos  Manufacturing  Company.     Under 
the  circumstances  set  forth  in  the  company's  letter, 
the  transportation  company's   liability   as   a   carrier 
ceased  under  the  law  of  this  State  upon  the  storage  of 
the  goods  in  a  safe  and  suitable  warehouse.    The  rule 
is  different,  however,  in  some  other  jurisdictions.    The 
fact  that  the  railway  company  may  give  notice  to  the 
consignee  does  not  change  their  liability.     After  the 
placing  of  the  goods  in  the  warehouse,  the  liability  is 
the  same  as  that  of  a  "storage  warehouse,"  but  a 
warehouseman  is  bound  only  to  use  reasonable  care 
and  diligence  for  the  preservation  of  the  property.    If 


307 

the  goods  were  stored  in  a  suitable  warehouse,  and 
the  carrier  used  reasonable  care  and  diligence,  it  is 
without  liability  under  the  above-stated  facts. 

NOTE: — See  opinion  of  Nov.  26,  1907,  collating  the  law  of  all  the 
states  upon  when  a  carrier's  liability  ceases  and  that  of  warehousemen 
begins  upon  arrival  of  goods  at  destination. — Ed. 


LIABILITY  OF  CONSIGNEE  FOE  FREIGHT  WHERE  SALE  IS  MADE 
F.  O.  B.  SHIPPING  POINT  AND  RIGHT  OF  CONSIGNEE  TO 
DISCOUNT  ON  AMOUNT  OF  FREIGHT  ADVANCED. 

(W.  0.  King  &  Co.,  January  22,  1904.) 
1  i  We  would  like  to  have  Mr.  Levy  Mayer 's  opin- 
ion on  the  following  matters:  First — We  sold  a 
cargo  of  lumber  free  over  vessel  rail  at  shipping 
port  in  Michigan  and  agreed  to  freight  it  on  our 
boat  at  a  certain  freight  rate  which  was  agreed 
upon. 

When  the  boat  arrived  the  captain  called  at 
our  customer's  office  for  his  freight,  which  was 
refused,  and  he  was  referred  to  us  for  the  freight, 
our  customer  claiming  that  it  was  our  duty  to  de- 
liver the  lumber  to  his  dock  and  pay  the  freight 
charges. 

Second — In  buying  goods  delivered  f.  o.  b.  des- 
tination, where  a  discount  is  allowed  on  the  pur- 
chase price,  and  where  the  consignee  pays  the 
freight  and  charges  to  the  shipper,  would  the  con- 
signee be  entitled  to  a  discount  on  the  freight;  in 
other  words,  cash  discount  on  the  face  of  an  in- 
voice?" 

1.  In  answer  to  the  first  question,  it  was  the  custom- 
er's duty  to  pay  the  freight;  f.  o.  b.  a  particular  place 
means  that  the  goods  will  be  delivered  free  of  expense 
to  the  consignee  up  to  that  place,  and  that  thereafter 
the   freight   charges    and    expenses    of   carriage    are 
chargeable  to  the  consignee. 

2.  I  do  not  quite  understand  this  question.     It  is 
asked  whether  or  not  the  consignee  is  "entitled"  to  a 
discount  on  the  freight.    The  question  must  be  decided 


308 

by  the  contract  between  the  parties.  If  the  discount 
is  to  be  allowed  on  the  "purchase  price,"  and  the 
freight  is  included  in  the  "purchase  price,"  then  the 
discount  should  be  deducted  from  the  "purchase 
price"  of  the  merchandise  before  the  amount  of  the 
freight  is  credited  on  the  "purchase  price."  If  the 
discount  is  allowed  on  the  "invoice,"  and  the  amount 
of  the  freight  is  not  included  in  the  "invoice,"  then 
the  discount  must  be  allowed  only  on  the  amount  of 
the  invoice. 


THE  LEGALITY  OF  A  BOYCOTT  BY  A  LABOR  UNION  DIRECTED 
AGAINST  THE  SPECIFIC  GOODS  OF  A  PARTICULAR  FIRM,  AND 
THE  REMEDY  THEREFOR. 

(Rueckheim  Bros.  &  Eckstein,  January  23,  1904.) 

"It  has  come  to  our  notice  that  handbills  are  be- 
ing circulated  by  the  United  Order  of  Box  Makers 
and  Sawyers  of  America  calling  attention  to  union 
labor  to  demand  the  union  label  on  all  folding 
boxes  used  for  Cracker  Jack,  candy,  shoes,  hats, 
drugs,  neckwear,  etc. 

We  feel  very  much  interested  in  this  matter 
for  the  reason  that  we  are  the  sole  manufacturers 
of  'Cracker  Jack'  and  the  name  'Cracker  Jack' 
for  confections  is  our  exclusive  property.  We  wish 
to  inquire  whether  it  could  not  be  considered  as 
an  illegal  act  in  calling  attention  specifically  to 
Cracker  Jack.  Is  this  not  a  distinct  boycott  on 
our  company?  These  handbills  are  being  circu- 
lated in  large  numbers  and  we  fear  that  unless  the 
same  is  soon  suppressed  this  act  will  be  very  in- 
jurious to  our  business." 
The  hand  bill  in  question  is  as  follows : 

United  Order  of  Box  Makers 

and  Sawyers  of  America. 

Union  made — and  paper 

"The  Attention  of  UNION  LABOR  is  called  to 
the  above  label  of  the  Registered 


309 

UNITED  ORDER  OF  PAPER  BOX  MAKERS. 
DEMAND  THE  ABOVE  LABEL. 

On  all  Folding  Boxes,  Cracker  Jack,  Candy,  Shoes, 
Hats,  Drugs,  Neckwear  and  on  all  Paper  Boxes 
when  you  purchase  goods." 

The  principles  governing  the  legality  of  the  action 
of  labor  unions  and  the  rights  of  employers  and  em- 
ployes with  respect  thereto,  are  fully  discussed  in  my 
prior  opinions  to  the  association,  under  date  of  April 
12,  1902 ;  May  13,  1903,  and  August  5,  1903. 

It  is  unnecessary  to  further  discuss  those  principles. 
The  question  now  to  be  determined  is  as  to  the  ap- 
plicability of  the  principles  to  the  present  case. 

I  understand  that  the  company  does  not  manufacture 
its  own  boxes,  but  that  it  purchases  the  same  from  dif- 
ferent manufacturers,  both  union  and  non-union.  In 
no  case,  however,  is  the  label  of  the  Boxmakers '  Union 
placed  upon  the  "Cracker  Jack"  boxes. 

Does  the  circulation  of  the  label  in  question  consti- 
tute a  conspiracy  or  boycott?  A  "boycott"  is  an  or- 
ganized attempt  to  coerce  a  person  or  party  into  com- 
pliance with  some  demand,  by  combining  to  abstain, 
and  compel  others  to  abstain,  from  having  any  business 
or  social  relations  with  him  or  them.  It  is  an  organ- 
ized persecution  of  a  person  or  company,  as  a  means 
of  coercion,  or  intimidation,  or  of  retaliation  for  some 
act,  or  refusal  to  act  in  a  particular  way.  It  is  a  com- 
bination of  many  to  cause  loss  to  one  person  by  coerc- 
ing others  against  their  will  to  withdraw  from  him 
their  beneficial  business  intercourse  through  threats 
that  unless  those  others  do  so  the  many  will  cause  sim- 
ilar loss  to  them. 

On  the  subject  in  general  see : 

Beck  v.  Union,  42  L.  R.  A.,  407  (Mich.). 
Casey  v.  Union,  12  L.  R.  A.,  193 ;  45  Fed.,  135, 

and  cases  cited. 

The  Illinois  statute  provides  (Sec.  46,  ch.,  38,  S.  & 
C.  Rev.  Stat.) : 

"If  any  two  or  more  persons  conspire  or  agree 
together,  or  the  officers  or  executive  committee  of 
any  society  or  organization  or  corporation  shall 


310 

issue  or  utter  any  circular  or  edict  as  the  action 
of  or  instruction  to  its  members,  or  any  other  per- 
sons, societies,  organizations  or  corporations  for 
the  purpose   of  establishing  a   so-called  boycott 
or  blacklist,  or  shall  post  or  distribute  any  writ- 
ten or  printed  notice  in  any  places,  with  the  fraud- 
ulent or  malicious  intent  wrongfully   and  wick- 
edly  to    injure    the    person,    character,    business 
or  employment  or  property  of  another     *     * 
or  to  commit  any  felony,  they  shall  be  deemed 
guilty  of  a  conspiracy;     *     *     *     ." 
Every  person  has  the  right  to  refuse  to  trade  with 
any  particular  person  or  class  of  persons,  even  though 
such  refusal  be  based  on  mere  whim  or  caprice.     A 
number  of  persons  cannot,  however,   agree  together 
that  they  will  not  deal  with  a  particular  person,  or 
class  of  persons,  unless  such  agreement  is  in  further- 
ance of  a  legal  right.    The  authorities  upon  this  ques- 
tion are  referred  to  in  my  prior  opinions. 

It  is  also  illegal  for  any  association  of  persons  to 
combine  together  with  the  purpose  of  compelling  an- 
other to  accede  to  the  demands  of  the  association,  by 
means  of  coercion,  intimidation,  or  threats  of  violence. 
This  coercion  may  be  exercised  directly  upon  the  per- 
son intended  to  be  injured,  or  upon  third  persons,  to 
compel  such  third  persons  to  inflict  injuries  by  with- 
drawal of  business  relations,  etc.  In  the  present  case, 
the  circular  referred  to  is  in  effect  a  request  to  union 
labor  to  refuse  to  purchase  the  Cracker  Jack  unless 
the  union  label  is  on  the  box.  The  circular  refers  spe- 
cifically to  the  goods  of  a  particular  company,  and 
" Cracker  Jack"  is  not  used  in  a  general  sense,  the 
same  as  is  candy,  etc.  If  the  circular  is  directed 
against  any  particular  person,  or  any  particular  goods, 
it  is,  in  my  opinion,  illegal. 

The  law  is  elastic.  It  keeps  abreast  of  the  times. 
It  is  broad  enough  to  meet  changing  condition.  Though 
I  can  find  no  precedent  that  fits  the  present  facts,  I 
am  however,  inclined  to  the  opinion  that  there  is  a 
good  fighting  chance  of  securing  relief  by  a  proper 


311 

court  proceeding,  particularly  if  suit  can  be  instituted 
in  the  Federal  Court.  Whether  suit  can  be  begun  in 
the  Federal  Courts  will  probably  depend,  under  the 
present  facts,  upon  the  citizenship  of  the  parties. 


THE    FOREIGN    CORPORATION    LAW    OF     MISSOURI    AND    THE 
EFFECT    OF    COMPLIANCE    SUBSEQUENT    TO    THE    INSTITU- 
TION OF   SUIT. 

(Ernst  Tosetti  Brewing  Co.,  February  5,  1904.) 

I  have  your  favor  enclosing  copy  of  letter  from  the 
Ernst  Tosetti  Brewing  Co.,  in  which  my  opinion  is 
asked  upon  the  effect  of  that  company's  failure  to 
comply  with  the  foreign  corporation  law  of  Missouri. 
The  company  states : 

"We  formerly  had  a  branch  in  Kansas  City, 
Mo.,  which  we  disposed  of  about  a  year  ago.    We 
have  had  a  large  number  of  claims  against  per- 
sons in  the  city  for  goods  delivered  and  have  had 
to  resort  to  the  court  for  the  collection  of  same. 
We  have  just  ascertained  that  a  number  of  our 
debtors  have  refused  to  honor  the  accounts,  mak 
ing  a  claim  that  we  have  not  complied  with  the 
laws  of  Missouri  in  the  transaction  of  our  busi- 
ness in  that  state.     As  near  as  we  can  ascertain 
we  are  not  positive  as  to  whether  the  laws  of  the 
state  have  been  complied  with  in  the  direction  of 
filing  a  statement  to  the  state  authorities,  relative 
to  our  incorporation,  etc.,  and  we  would  like  you 
to  inform  us  if  in  the  event  this  is  so  if  this  would 
invalidate  our  claim  against  our  several  debtors." 
I  assume,  therefore,  that  the  law  in  question  has  not 
been  complied  with.    I  have  examined  the  foreign  cor- 
poration laws  of  Missouri.     They  are  too  lengthy  to 
set  out  here. 

The  Act  of  April  21,  1891,  as  amended  March  11, 
1895,  provides  that: 

"No  foreign  corporation     *     *     *     which  shall 


312 

fail  to  comply  with  this  act  (An  Act  imposing 
conditions  upon  foreign  corporations)  can  main- 
tain any  suit  or  action  *  *  *  in  any  of  the 
courts  of  this  state." 

The  company,  unless  it  complies  with  the  law,  can 
not  maintain  any  action  in  Missouri. 

There  is  but  one  possible  loophole  of  escape.  That 
is  for  the  company  to  now  comply  with  the  law  be- 
fore further  prosecuting  the  suits  pending  in  Missouri. 

In  Carson-Rand  Co.  v.  Stern,  129  Mo.,  381,  the  plain- 
tiff, a  foreign  corporation,  brought  an  action  to  re- 
cover upon  certain  notes.  The  corporation  complied 
with  the  law  after  the  institution  of  the  suit,  but  be- 
fore the  filing  of  any  motion,  answer  of  plea  by  the 
defendants.  The  court  held  that  the  action  could  be 
maintained. 

The  Court  of  Appeals,  in  Eberhardt  v.  Robertson, 
78  Mo.  App.,  404,  decided  the  contrary  of  this  propo- 
sition, saying  the  question  was  not  really  before  the 
Supreme  Court  in  the  former  case. 

In  the  later  case  of  Chicago  Mill  &  Lumber  Co.  v. 
Sims,  74  S.  W.,  128,  decided  April  28,  1903,  the  Court 
of  Appeals  followed  the  Carson-Band  case  and  held 
that  the  failure  to  comply  with  the  law  did  not  render 
the  contracts  of  the  corporation  void,  but  only  sus- 
pended the  remedy  thereon.  In  that  case,  however, 
the  law  was  complied  with  before  the  institution  of 
the  suit,  but  after  the  making  of  the  contract.  The 
court,  however,  construes  the  holding  of  the  Supreme 
Court  in  the  Carson-Rand  case  to  be,  that  a  subse- 
quent compliance  at  any  time  after  suit  is  instituted, 
will  enable  the  corporation  to  maintain  the  suit.  The 
case,  however,  was  certified  to  the  Supreme  Court  for 
decision.  That  decision  has  not  yet  been  announced 
as  far  as  I  can  discover.  The  Supreme  Court,  in  my 
opinion,  will  probably  adhere  to  its  former  opinion 
and  will  hold  that  a  compliance  with  the  law  at  any 
time  will  enable  the  corporation  to  maintain  the  suit. 

If  the  amounts  at  stake  are  sufficient  to  justify  it, 
I  think  it  advisable  that  the  law  be  immediately  com- 


313 

plied  with.    Your  Missouri  representative  will  advise 
you  what  steps  are  necessary  to  comply  with  the  law. 

NOTE: — See  the  recent  cases  of  Tri-State,  etc.,  v.  Forest  Park  High- 
lands, 192  Mo.,  404;  Chicago  Mill  fy  Lumber  Co.  v.  Sims,  197  Mo., 
507,  and  Eoeder  v.  Bobertson,  100  S.  W.  (Mo.  1907),  1086,  upon  the 
effect  of  subsequent  compliance  with  the  Missouri  foreign  corporation 
law.— Ed. 


LIABILITY  OF  CAEEIER  FOR  TRANSFERRING  FREIGHT  CON- 
SIGNED TO  A  POINT  NOT  ON  ITS  OWN  LINES,  TO  ANOTHER 
CARRIER,  IN  VIOLATION  OF  THE  SHIPPER'S  INSTRUCTIONS. 

(Edward  Eose  &  Co.,  February  6,  1904.) 
Dear  Sir:    I  have  your  favor  enclosing  communica- 
tion from  Edward  Kose  &  Co.    That  company  states: 

"We  beg  to  ask  advice  from  the  Hon.  Levy 
Mayer,  counsel  for  the  Illinois  Manufacturers' 
Assn.,  as  to  the  legality  of  coercing  a  common  car- 
rier to  indemnify  a  loss  incurred  through  the  neg- 
ligence of  said  carrier  in  not  complying  with  the 
following  instructions,  having  the  carrier's  official 
signature  in  acknowledgment  of  same : 

'Dear  Sir:  You  will  please  take  notice  and  in- 
struct your  billing  clerks  to  return  to  us  all  pack- 
ages that  can  not  be  routed  over  your  lines,  as  we 
desire  no  local  transfers  made.  Should  you  ac- 
cept or  deliver  any  of  our  freight  to  another  com- 
pany, we  will  hold  you  liable. 

Yours  very  truly,' 

We  also  beg  to  cite  the  case  at  issue  over  which 
the  controversy  arose.  At  a  certain  date  we  made 
a  shipment  to  a  concern,  but  through  an  error  on 
the  part  of  our  Shipping  Clerk  the  package  was 
misdirected  and  given  to  the  carrier  who  could 
have  handled  this  package  in  the  event  that  it  had 
been  addressed  correctly,  but  inasmuch  as  the  ad- 
dress given  was  not  a  common  point  of  the  receiv- 
ing carrier,  they  could  not  route  it,  but  deliberately 
ignored  our  instructions,  effected  a  local  transfer 
to  another  carrier  over  whose  lines  this  misdi- 
rected package  could  be  routed,  thereby  causing 


314 

a  great  delay  and  inconveniences  to  both  custo- 
mer and  ourselves,  and  after  any  amount  of  trac- 
ing and  corresponding,  finally  the  package  was 
located  but  the  consignee  refused  to  accept  goods 
on  account  of  delay. 

We  look  therefore  to  the  carrier,  whose  receipt 
we  hold,  to  re-imburse  our  loss  sustained. 

His  worthy  opinion  in  this  matter  will  oblige," 
etc. 

The  exact  question,  so  far  as  I  am  advised,  has  not 
been  passed  upon  by  the  courts.  The  carrier  has  the 
right  to  accept  freight  for  points  beyond  or  not  upon 
its  own  line.  If  it  accepts  this  freight,  the  liability 
of  a  carrier,  as  an  insurer,  attaches  to  the  shipment. 
In  the  absence  of  a  special  contract,  therefore,  the  car- 
rier can  transfer  freight  to  other  or  connecting  lines. 
In  the  present  case  the  package  was  misdirected 
through  the  mistake  of  the  shipper.  The  carrier  had 
the  right  to  assume  that  the  package  was  correctly  ad- 
dressed. The  delivery  of  the  package  to  the  car- 
rier, the  package  being  addressed  to  a  point  not  on  the 
line  of  the  carrier,  was  at  least  an  implied  direction 
to  the  carrier  to  ship  to  the  address  indicated,  even 
though  that  address  was  on  a  connecting  line.  I  as- 
sume that  a  way-bill  or  railroad  receipt  or  bill  of  lad- 
ing is,  in  every  instance,  issued  by  the  carrier.  The 
contract  of  shipment,  therefore,  was  entered  into  be- 
tween the  shipper  and  the  carrier  for  the  transporta- 
tion of  goods  to  a  point  not  on  the  line  of  railway  of 
the  carrier.  The  carrier,  therefore,  had  the  right  to 
transfer  the  shipment  to  a  carrier  whose  lines  did 
reach  the  point  of  destination. 

The  shipper  seeks  here  .to  hold  the  carrier  liable 
because  the  carrier  has  made  such  a  transfer  in  viola- 
tion of  a  previous  letter  of  instructions  to  the  shipper. 
The  shipper  is  seeking,  by  means  of  a  letter,  to  qualify 
his  future  dealings  with  the  carrier,  the  terms  of  which 
letter  are  not  consented  to  by  the  carrier.  He  is  thus, 
in  effect,  without  the  consent  of  the  carrier,  attempt- 
ing to  make  the  letter  a  part  of  and  a  limitation  upon 
the  subsequent  contract,  when  such  letter  is  at  vari- 


315 

ance  with  the  express  terms  of  the  contract.  If  the 
shipper  wishes  to  restrict  the  terms  of  the  contract 
of  shipment  and  impose  upon  the  carrier  the  duty  of 
returning  goods  which  have  been  delivered  to  it  for 
shipment,  because  the  place  of  destination  is  not  on 
the  line  of  the  carrier,  then  such  restriction  should 
accompany  each  delivery  so  as  to  be  part  of  the  par- 
ticular contract  of  shipment,  and  no  bill  of  lading 
should  be  accepted. 

The  liability  of  the  carrier  for  delay  is  covered  in 
my  opinion  of  October  28,  1902,  in  answer  to  the  query 
of  F.  T.  Bentley,  Chairman  of  the  Traffic  Committee. 

The  liability  of  the  initial  carrier  for  delay  occurring 
on  connecting  lines,  is  covered  in  my  opinion  of  Octo- 
ber 30,  1903,  in  answer  to  the  query  of  the  Austin  Mfg. 
Co. 


NOTE: — See  the  opinion  of  November  7,  1906,  for  the  John  E.  Burns 
Lumber  Company  as  to  the  right  of  a  carrier  to  control  the  routing  of 
shipments;  and  also  the  cases  therein  cited  of  So.  Pac.  Co.  v.  Interstate 
Commerce  Com'n.,  200  TL  S.,  536  (1906);  L.  $•  N.  B.  Co.  v.  West  Coast 
Naval  Stores  Co.,  198  U.  S.,  483;  A.,  T.  $  S.  F.  B.  Co.  \.  D.  $  N.  0. 
B.  Co.,  110  U.  S.,  667,  680 ;  Post  v.  So.  B.  Co.,  103  Tenn.,  184,  52  S.  W., 
301;  Lowe  v.  Seaboard  Air  Line  B.  Co.,  63  S.  C.,  248,  41  S.  E.,  297. — Ed. 


CONSTITUTIONALITY  OF  THE  FOREIGN  CORPOEATION  LAW  OF 

NEW  YORK. 

(Oliver  Typewriter  Co.,  February  8,  1904.) 

"Will  you  kindly  find  out  for  us  from  the  at- 
torneys of  your  association  whether  the  laws  of 
the  state  of  New  York  in  connection  with  foreign 
corporations  doing  business  in  that  state,  have 
been  declared  constitutional,  so  far  as  the  follow- 
ing items  of  taxation  are  concerned,  viz. : 

For  license  for  the  privilege  of  exercising  its 
corporate  franchises  or  carrying  on  business  based 
on  the  amount  of  capital  stock  employed  in  New 
York  state,  per  chapter  558,  Laws  of  1901,  Sec- 
tion 181,  tax  1^4  mills  (.00125). 

For  tax  or  franchise  or  business  based  on  value 
of  capital  stock  employed  in  New  York  state,  per 


316 

chapter  908,  Laws  of  1906,  Section  181,  and  acts 
amendatory  thereof,  for  the  year  ending  Oct.  31st, 
tax  V/2  mills  (.0015). 

If  we  remember  correctly,  one  of  the  statutes 
was  under  consideration  in  the  Courts,  about  a 
year  ago;  just  what  the  result  was,  however,  we 
do  not  know." 

"Laws  of  1906"  referred  to  in  paragraph  3  of  the 
above  communication  probably  refers  to  Laws  of  1896. 

The  law  passed  in  1901  (Section  181,  Chap.  558)  is 
an  amendment  to  the  law  passed  in  1896  (Chap.  908). 

The  two  laws  referred  to  in  the  letter  of  the  Oliver 
Typewriter  Company,  are  therefore  one  and  the  same. 

The  law  as  amended  provides : 

"Every  foreign  corporation,  except  banking 
corporations,  fire,  marine,  casualty  and  life  in- 
surance companies,  co-operative  fraternal  insur- 
ance companies  and  building  and  loan  associations, 
authorized  to  do  business  under  the  general  cor- 
poration law,  shall  pay  to  the  state  treasurer,  for 
the  use  of  the  state,  a  license  fee  of  one-eighth 
of  one  per  centum  for  the  privilege  of  exercis- 
ing its  corporate  franchises  or  carrying  on  its 
business  in  such  corporate  or  organized  capacity 
in  this  state,  to  be  computed  on  the  basis  of  the 
capital  stock  employed  by  it  within  this  state,  dur- 
ing the  first  year  of  carrying  on  its  business  .in 
this  state;  and  if  any  year  thereafter  any  such 
corporation  shall  employ  an  increased  amount  of 
its  capital  stock  within  this  state,  the  same  license 
fee  shall  be  due  and  payable  upon  any  such 
increase.  The  tax  imposed  by  this  section  on  a 
corporation  not  heretofore  subject  to  its  pro- 
visions shall  be  paid  on  the  first  day  of  Decem- 
ber, nineteen  hundred  and  one,  to  be  composed 
upon  the  basis  of  the  amount  of  capital  stock  em- 
ployed by  it  within  the  state  during  the  year  pre- 
ceding such  date,  unless  on  such  date  such  cor- 
poration shall  not  have  employed  capital  within 
the  state  for  a  period  of  thirteen  months  in  which 
case  it  shall  be  paid  within  the  time  otherwise 


317 

provided  by  this  section.  No  action  shall  be  main- 
tained or  recovery  had  in  any  of  the  courts  in  this 
state  by  such  foreign  corporation  without  obtain- 
ing a  receipt  for  the  license  fee  hereby  imposed 
within  thirteen  months  after  beginning  such  busi- 
ness within  the  state,  or  if  at  the  time  this  sec- 
tion takes  effect  such  corporation  has  been  en- 
gaged in  business  within  this  state  for  more  than 
twelve    months,    without    obtaining    such    receipt 
within  thirty  days  after  such  tax  is  due. ' ' 
The  statute  has  been  in  effect  upheld  in  Dunbarton 
Co.  v.  Greenwich  Co.,  83  N.  Y.  Sup.,  1054. 
In  my  opinion  the  statute  is  constitutional. 


THE  EFFECT   OF   IMPROPER   SERVICE  OF   PROCESS    UPON   COR- 
PORATIONS IN   THE   STATE  OF   TEXAS. 

(Western  Cottage  Piano  and  Organ  Company,  Feb- 
ruary 8,  1904.) 

"We  would  be  pleased  to  have  counsel  for  your 
Association  advise  us  in  the  following  matter: 

Through  alleged  misconduct  of  a  former  sales- 
man and  collector,  acting  for  our  company  in  the 
state  of  Texas,  we  are  being  subjected  to  a  series 
of  very  annoying  lawsuits  instituted  in  the  state 
courts  of  Texas. 

In  order  to  get  service  upon  our  company,  plain- 
tiffs have  served  citations  and  copy  of  petition  on 
our  collector,  who  is  not  a  proper  agent  under  the 
statute,  upon  whom  service  may  be  had,  but  our 
local  attorney  advises  us  that  his  motion  to  quash 
service  operates  as  our  appearance  to  the  next 
term  of  court,  and  that  the  Supreme  Court  of 
Texas  has  held  that  upon  motion  to  set  aside  or 
enjoin  the  enforcement  of  a  judgment,  void  or 
irregular  by  reason  of  improper  service,  the  op- 
posite party  may,  upon  cross-bill,  relitigate  his 
original  cause  of  action.  According  to  these  hold- 
ings we  are  compelled  to  litigate  in  the  state 
courts  of  Texas.  The  amount  sought  to  be  recov- 


318 

ered  not  being  $2,000  in  any  one  case,  the  action 
is  not  removable  to  the  Federal  Courts. 

The  question  now  is,  are  we  compelled  to  try 
cases  in  Texas  courts  by  the  fiction  of  serving 
citation  on  an  improper  person?     Could  we,  by 
any  method,  force  trial  in  a  Federal  Court?    Col- 
lection of  an  execution  could  be  had  by  garnish- 
ment proceedings  on  customers  with  whom  we  do 
business  in  Texas,  and  it  would  not  be  necessary 
to  sue  us  here  upon  a  foreign  judgment  to  make 
amount  of  a  judgment  obtained  in  Texas." 
The  holdings  of  the  Texas  courts  to  the  effect  that 
a  motion  to  set  aside  a  judgment  rendered  upon  ir- 
regular service  constitutes  an  appearance  are  based 
upon   statutory   provisions   peculiar   tp   the   state   of 
Texas. 

Aetna  Life  Ins.  Co.  v.  Hanna,  17  S.  W.,  35. 
Railway  Co.  v.  WUtley,  13  S.  W.,  853. 
York  v.  State,  11  S.  W.,  869. 

The  validity  of  these  statutory  provisions  has  been 
passed  upon  by  the  United  States  Supreme  Court,  and 
that  court  has  held  that  they  do  not  contravene  the 
provisions  of  the  Federal  Constitution. 
York  v.  Texas,  137  U.  S.,  15. 
Kauffman  v.  Wootters,  138  U.  S.,  285. 
The  Supreme  Court  also  held  that  these  provisions 
are  not  applicable  to  actions  in  the  federal  courts. 

Southern  Pacific  Co.  v.  Dentpn,  146  U.  S.,  202. 
Under  these  circumstances  no  relief  can  be  had  in 
the  federal  courts  where  the  amount  in  dispute  is  less 
than  $2,000. 

The  Supreme  Court  of  the  United  States  said  in 
York  v.  Texas,  supra: 

"The  state  has  full  power  over  remedies  and 
procedure  in  its  own  courts  and  can  make  any 
order  it  please  in  respect  thereto,"  etc. 
And  again: 

"If  the  defendant  had  taken  no  notice  of  this 
suit,  and  judgment  had  been  formally  entered 
upon  such  insufficient  service,  and  under  process 
thereon  his  property,  real  or  personal,  had  been 


319 

seized  or  threatened  with  seizure,  he  could  by 
original  action  have  enjoined  the  process  and  pro- 
tected the  possession  of  this  property.  If  the 
judgment  had  been  pleaded  as  defensive  to  any 
action  brought  by  him,  he  would  have  been  free 
to  deny  its  validity.  There  is  nothing  in  the 
opinion  of  the  Supreme  Court  or  in  any  of  the 
statutes  of  the  state,  of  which  we  have  been  ad- 
vised, gainsaying  this  right." 

I  do  not  pass  upon  the  question  of  the  validity  of 
the  service  upon  the  company,  as  I  have  not  before 
me  a  copy  of  the  return  upon  the  summons. 

Where  there  is  a  total  lack  of  service  the  judgment 
is  void,  but  if  the  service  is  merely  irregular  or  de- 
fective, and  actually  gives  the  defendant  notice  of  the 
proceedings,  it  is  only  voidable. 

.Of  course,  if  the  judgment  is  void  it  can  not  be 
sued  on  in  another  state,  nor  made  the  subject  of 
garnishment  proceedings. 

WHETHER  A  MINOR  MAY  INSTITUTE  LEGAL  PROCEEDINGS 
WITHIN  TWO  YEARS  AFTER  ATTAINING  HIS  MAJORITY  FOR 
DAMAGES  ON  ACCOUNT  OF  INJURIES. 

(Rosenow  &  Co.,  February  8,  1904.) 
"We  have  the  opinion  of  Mr.  Levy  Mayer,  Chi- 
cago, Nov.  21,  1923,  regarding  damage  suit  for 
injured  of  the  communication  of  the  Mount  Ver- 
non  Car  Manufacturing  Co.  before  us.    We  would 
like  to  ask  if  same  answer  applies  to  minors.  We 
understand  that  the  injured,  if  a  minor,  has  the 
right  to  sue  until  he  is  of  age." 
The  law  (Section  1,  Chap.  70,  Kurd's  Rev.  Stat.  of 
1901,  p.  1002 ;  Sec.  2,  Act  of  May  13,  1903,  Laws  1903, 
p.  217)  providing  for  a  recovery  when  the  death  of  a 
person  is  caused  by  the  wrongful  act,  neglect  or  de- 
fault of  another,  makes  no  exception  in  favor  of  a 
minor.    The  limitation  of  one  year  applies  to  all  per- 
sons, including  minors,  where  death  is  the  cause  of 
action. 

Section   14  of  the  Limitation  Law    (Kurd's   Rev. 


320 

Stat.,  p.  1163)  provides  that  actions  for  damages  for 
injuries  to  the  person  shall  be  commenced  within  two 
years  after  the  cause  of  action  accrued. 
Section  21  of  the  same  law  provides : 

"If  the  person  entitled  to  bring  an  action,  men- 
tioned in  the  nine  preceding  sections,  is,  at  the 
time  the  cause  of  action  accrued,  within  the  age 
of  twenty-one  years,  or  if  a  female,  within  the  age 
of  eighteen  years,  or  insane,  or  imprisoned  on  a 
criminal  charge,  he  or  she  may  bring  the  action 
within  two  years  after  the  disability  is  removed." 
The  injured  minor  under  that  section  is  entitled, 
therefore,  to  bring  suit  at  any  time  within  two  years 
after  he  or  she  attains  his  or  her  majority. 

THE  MECHANICS'  LIEN  LAW  OF  ILLINOIS. 

(Kaestner  &  Co.,  February  8,  1904.) 
"Is  there  such  a  thing  as  protection  under  our 
present  Mechanics'  Lien  Laws,  and  what  is  need- 
ful to  protect  lien  rights?     This  question  will  no 
doubt  interest  many  of  our  members,  and  there 
seems  to  be  a  difference  of  opinion  among  attor- 
neys as  to  whether  a  lien  can  be  enforced,  etc." 
The  legislature  of  Illinois  on  May  18,  1903,  passed 
an  entirely  new  law  covering  the  subject  of  mechanics' 
liens.     (Session  Laws,  1903,  pp.  130,  145.)     The  pro- 
visions of  that  law  are  too  lengthy  to  be  set  out  here. 
They  cover  sixteen  printed  pages.     If  the  statute  is 
complied  with  there  is  no  reason  why  a  lien  can  not 
be  enforced.    What  constitutes  a  sufficient  compliance 
is  a  question  which  must  be  decided  upon  the  facts 
in  each  case. 

AS  TO  WHAT  CONSTITUTES  " STEAM  PRESSURE"  UNDER  SEC- 
TION 10  OP  THE  ORDINANCE  FOR  THE  EXAMINATION  AND 
LICENSING  OF  ENGINEERS  IN  CHICAGO. 

(Illinois  Maintenance  Co.,  February  8,  1904.) 

"We  should  like  to  have  your  legal  opinion  as  to 
what  constitutes  'Steam  Pressure'  under  Section 


321 

10  of  an  'Ordinance  for  the  examination  and  li- 
cense of  engineers  in  charge  of  steam  machinery 
and  steam  boilers  in  the  city  of  Chicago,'  passed 
April  3rd,  1890. 

In  this  connection  kindly  note  the  wording  of 
Section  12  of  this  ordinance,  in  which  boilers  op- 
erating at  10  Ibs.  pressure  or  under  are  exempt 
from  the  provisions  of  the  Ordinance. 

Are  we  safe  in  concluding  that  a  boiler  which 
operates  part  of  the  time  at  60  Ibs.  and  part  of 
the  time  at  10  Ibs.  or  under,  does  not  need  the  con- 
stant supervision  of  a  licensed  engineer,  boiler 
or  water  tender,  during  such  times  as  it  is  operat- 
ing at  the  lower  pressure!" 
Section  10  of  the  ordinance  provides  as  follows : 

"It  shall  be  the  duty  of  the  board  of  examiners 
to  see  that  each  boiler  plant  in  the  city  of  Chi- 
cago shall  have  a  licensed  engineer,  or  boiler  or 
water  tender,  or  both,  as  provided  herein,  in 
charge  at  all  times  when  working  under  pressure, 
whose  certificate  of  qualification  shall  be  displayed 
in  a  conspicuous  place  in  the  engine  or  boiler 
room,  and  each  engineer  and  boiler  tender  shall 
devote  his  entire  time,  while  boilers  are  working 
under  pressure,  to  the  duties  of  the  plant  under 
his  charge." 

" Under  pressure"  means  while  the  boilers  are  in 
operation — that  is,  while  the  boilers  are  being  devoted 
to  the  operation  of  the  motive  power  in  connection  with 
which  they  were  installed.  In  my  opinion  it  does  not 
include  the  casual  keeping  up  of  steam  at  low  pressure, 
as,  for  example,  when  the  fires  are  banked  during  the 
night  or  at  other  times  when  the  plant  is  not  in  opera- 
tion. 

Section  12  provides  as  follows: 

"Engineers  in  charge  of  locomotives  shall  be 
exempt  from  the  provisions  of  this  chapter,  and 
all  boilers  used  for  heating  private  dwellings,  hot 
houses,  conservatories  and  other  boilers  carrying 
not  more  than  ten  pounds  pressure  of  steam  per 
square  inch  and  the  persons  operating  them  shall 


322 

be  exempt  from  the  provisions  of  this  chapter. 
The  police  are  instructed  to  report  all  infractions 
of  this  chapter  coming  to  their  notice." 
This  section  provides  that  certain  specified  boilers 
shall  be  exempt  from  the  operation  of  the  law.     A 
boiler  plant  can  not  be  subject  to  this  law  at  one  time 
and  not  at  another.    If  a  boiler  is  under  sixty  pounds' 
pressure  at  one  time  and  under  ten  pounds'  pressure 
at  another,  it  is  within  the  provisions  of  Section  10  of 
the  law,  and  must  have  a  licensed  engineer  in  con- 
stant attendance  when  the  boiler  is  under  pressure  as 
provided  in  Section  10. 


WHETHER  A  PURCHASER  CAN  ACCEPT  ONE  PORTION  OF  AN 
ORDER  OF  GOODS  AND  REJECT  THE  BALANCE,  AND 
WHETHER  PRINTED  CONDITIONS  ON  AN  ORDER  ARE  BIND- 
ING. 

(Racine-Sattley  Company,  February  8,  1904.) 

"We  submit  the  following  statement  of  facts 
and  interrogatories  to  you  and  ask  you  to  kindly 
obtain  from  our  able  counsel,  Mr.  Levy  Mayer,  his 
opinion  and  answers : 

Facts:  The  R-S  Co.,  as  buyers  and  using 
printed  form  attached,  purchased  of  - 
certain  hickory  buggy  rims  of  a  specified  grade. 
The  car,  when  received,  was  inspected,  that  part 
accepted  being  consumed  and  balance  rejected. 
Seller  was  duly  notified  of  inspection  and  disposi- 
tion of  that  part  rejected  was  requested.  Seller 
demanded  acceptance  or  the  rejection  of  entire 
car,  which  demand  buyer  refused.  Seller  now 
claims  full  payment  for  car  and  refuses  to  accept 
legal  tender  for  that  part  accepted;  also  to  give 
any  disposition  of  part  rejected. 

Is  the  buyer  bound  to  accept  or  reject  all  of 
any  shipment,  or  may  he  reject  that  part  alone 
which  does  not  fulfill  specifications  ?  If  so,  please 
suggest  proper  wording  to  fully  protect  buyer, 
as  intended  and  outlined  above. 


323 

Again,  are  these  printed  conditions,  in  the  event 
that  order  is  accepted  as  printed  and  written,  bind- 
ing against  buyer  and  seller,  if  contradictory  as 
regards  established  custom  used  in  buying,  sell- 
ing and  inspecting  such  commodities!" 
The  printed  form  contains  the  following  conditions: 
"Material  shall  be  equal  to  highest  grade  here- 
tofore supplied — equal  to  the  highest  standard  of 
its  kind,  and  at  all  times  satisfactory  to  buyer  as 
to  quality,  style,  finish  and  workmanship,  and  sub- 
ject to  buyer's  inspection  and  acceptance  at  its 
works  at  Springfield,  111.    Rejected  material  shall 
be  held  subject  to  seller's  order  and  risk.      No 
charge  for  packages  or  drayage  will  be  allowed." 
If  the  contract  is  an  entire  one,  the  buyer  must  ac- 
cept or  reject  the  whole.    He  can  not  accept  one  part 
and  reject  another.    If  the  contract  is  severable,  then 
acceptance  of  one  part  does  not  obligate  the  buyer  to 
accept  the  balance. 

If  the  purchase  in  question  was  of  a  designated 
quantity,  deliverable  at  one  time,  the  contract  would 
be  an  entire  one.  All  of  the  facts  are  not  before  me, 
but  from  those  submitted  to  me  the  present  contract 
would  appear  to  be  entire.  If  so,  then  the  buyer  was 
obligated  to  accept  or  reject  the  entire  carload.  He 
could  not  accept  part  and  reject  the  balance  unless 
the  terms  of  the  contract  so  permitted. 

24  Encyc.  of  Law  (2nd  Ed.),  p.  1092. 
Williams  v.  Leslie,  66  111.  App.,  246. 
Wolf  v.  Dietzsch,  75  111.,  205. 
Harzfield  v.  Converse,  105  111.,  534. 
It  is  a  general  rule  that  when  there  is  an  acceptance 
by  the  buyer,  it  is  binding  and  conclusive  upon  him 
in  the  absence  of  fraud  or  deceit. 

If  there  is  a  warranty,  the  buyer  may  ordinarily  re- 
coup the  amount  of  his  damage  in  an  action  by  the 
seller  for  the  purchase  price.  Whether  or  not  there 
is  a  warranty  in  the  present  case  depends  upon  a  va- 
riety of  circumstances  with  which  I  am  not  familiar, 
as,  whether  or  not  the  goods  were  ordered  by  descrip- 
tion or  by  sample,  whether  they  were  manufactured 


324 

or  were  to  be  manufactured,  whether  the  defects  in  the 
goods  were  obvious  or  latent,  and  how  and  where  the 
goods  were  ordered.  The  question  must  be  decided 
from  all  the  facts  and  circumstances.  I  have  outlined 
above  the  general  principles  applicable  to  the  case. 

The  printed  conditions  in  the  order  are  binding 
upon  the  seller  if  accepted  by  him.  The  contract  is, 
however,  somewhat  informal  and  is  susceptible  of  im- 
provement, and  could  be  worded  so  as  to  make  every 
purchase  severable  as  to  the  part  accepted  and  part 
rejected. 

If  the  conditions  of  the  contract  are  contrary  to  an 
established  custom,  the  contract  controls.  A  custom  is 
of  no  effect  where  the  subject-matter  is  expressly  cov- 
ered by  the  contract. 


WHETHER  A  FOREIGN  CORPORATION  IS  OBLIGATED  TO  PRO- 
CURE A  WHOLESALE  MERCANTILE  LICENSE  TAX  UNDER 
THE  LAWS  OF  PENNSYLVANIA. 

(Geo.  D.  Whitcomb  Company,  February  8,  1904.) 

"We  enclose  form  i Return  for  wholesale  mer- 
cantile license  tax,'  which  was  delivered  to  our 
office  in  Pittsburgh  to  be  filled  out.  We  have  no 
capital  employed  in  that  state  except  the  office 
fixtures  and  furniture,  amounting  to  about  $200. 
The  office  is  used  for  headquarters  for  our  trav- 
eling salesmen  to  conduct  their  correspondence 
and  it  therefore  occurred  to  us  that  we  are  not 
subject  to  any  taxation  in  Pennsylvania.  Our 
goods  are  all  manufactured  in  Chicago  and  ship- 
ments are  made  direct  from  here  to  consumers. 

We  will  appreciate  it  very  much  if  you  will  ad- 
vise us  what  action  should  be  taken  in  the 
matter. ' ' 

The    "Return    for    Wholesale    Mercantile    License 
Tax"  is  made  out  in  accordance  with  the  provision  of 
an  act  of  the  Legislature  of  Pennsylvania,  passed  May 
2,  1899  (Session  Laws,  1899,  p.  184). 
That  law  provides : 


325 

"Each  wholesale  vendor  of  or  wholesale  dealer 
in  goods,  wares  and  merchandise  shall  pay  an  an- 
nual mercantile  license  tax  of  three  dollars,  and 
also  persons  engaged  shall  pay  one-half  mill  ad- 
ditional on  each  dollar  of  the  whole  volume,  gross, 
of  business  transacted  annually.  Each  dealer  in 
or  vendor  of  goods,  wares  or  merchandise  at  any 
exchange  or  board  of  trade  shall  pay  a  mercantile 
license  tax  of  twenty-five  cents  on  each  thousand 
dollars'  worth,  gross,  of  goods  so  sold. 

Section  2.     And  it  is  provided  that  all  persons 
who  shall  sell  to  dealers  in  or  vendors  of  goods, 
wares  and  merchandise,  and  to  no  other  person 
or  persons,  shall  be  taken  under  the  provisions 
of  this  act  to  be  wholesalers ;  and  all  other  vendors 
of  or  dealers  in  goods,  wares  and  merchandise 
shall  be  retailers,  and  shall  pay  an  annual  license 
tax  as  provided  in  this  act  for  retailers." 
Whether  or  not  the  company  is  subject  to  the  pro- 
visions of  the  law  depends  upon  the  method  pursued 
by  the  company  in  carrying  on  its  business  in  Penn- 
sylvania. 

If  the  company  maintains  an  office  in  Pennsylvaia 
as  headquarters  exclusively  for  its  traveling  salesmen 
who  take  orders  that  are  subject  to  the  company's  ap- 
proval at  the  home  office  in  Chicago,  from  which  place 
all  orders  are  filled,  then  I  am  of  the  opinion  that  the 
company  is  engaged  in  interstate  commerce  and  need 
not,  therefore,  comply  with  the  law  in  question. 


WHETHER  A  FOREIGN  CORPORATION  HAVING  COMPLIED  WITH 
THE  FERTILIZER  CONTROL  LAW  OF  PENNSYLVANIA  IS  COM- 
PELLED TO  COMPLY  WITH  THE  "  BONUS "  ACT. 


(Darling  &  Co.,  February  8,  1904.) 
"We  have  a  salesman  traveling  western  Penn- 
sylvania who  works  on  commission,  appointing 
local  agents  to  sell  our  fertilizers.  The  enclosed 
form  of  contract  is  used  in  appointing  said  agents. 
We  have  complied  with  the  Fertilizer  Control  Law 


326 

of  Pennsylvania  by  paying  the  stipulated  amount 
per  brand  to  sell  our  fertilizers,  and  a  few  days 
ago  received  a  bonus  report  and  capital  stock  re- 
port to  fill  out. 

Kindly  advise  us  whether  or  not  it  is  necessary 
that  we  fill  out  said  reports  under  the  circum- 
stances. ' ' 

I  assume,  from  a  reading  of  the  enclosed  contract, 
that  goods  are  consigned  by  the  company  to  its  local 
agents  in  Pennsylvania,  who  sell  the  same  upon  a  com- 
mission basis.  The  contract  expressly  provides  that 
the  title  to  the  goods  so  consigned  shall  remain  in  the 
company. 

The  question  of  whether  or  not  the  method  of  doing 
business  pursued  by  the  company  subjects  it  to  the 
operation  of  the  foreign  corporation  laws  of  Penn- 
sylvania is  covered  by  my  opinion  to  the  Association 
under  date  of  July  19,  1901,  in  answer  to  the  query  of 
Darling  &  Co. 

The  provisions  of  the  " bonus"  act  of  Pennsylvania 
are  set  out  in  my  opinion  to  the  Association  under  date 
of  October  7,  1901,  and  are  further  referred  to  in  my 
opinions  of  January  15,  1902,  and  October  30,  1903. 

I  am  of  the  opinion  that  to  the  extent  that  the  com- 
pany has  capital  "actually  employed  or  to  be  em- 
ployed" wholly  within  Pennsylvania  it  is  liable  for  the 
tax.  It  is  immaterial  that  the  company  has  already 
complied  with  the  so-called  fertilizer  control  law  of  the 
State  of  Pennsylvania. 

THE  EFFECT  OF  THE  NEW  UNIFOEM  BILL  OF  LADING  PRO- 
POSED BY  THE  RAILROAD  COMPANIES,  AND  THE  RIGHT  OF 
THE  RAILROAD-  COMPANIES  TO  ADOPT  SUCH  BILL  OF 
LADING. 

(111.  Mfrs.  Assn.,  February  13,  1904.) 
Dear  Sir :     I  have  your  favor  enclosing  communica- 
tion from  F.  T.  Bentley,  Chairman  of  the  Traffic  Com- 
mittee, which  communication  is  as  follows : 

"Referring  to  the  copy  of  the  new  proposed 
uniform  bill  of  lading  to  be  put  in  effect  April  1, 


327 

1904,  you  will  note  that  this  bill  of  lading  to  be 
complete  should  carry  the  signature  of  the  agent 
as  many  as  three  times  and  demands  that  the 
shipper  shall  sign  it,  with  the  evident  intention  of 
making  a  special  contract  for  each  shipment.  The 
burden  of  conditions  as  shown  on  the  back  seems 
to  be  burdensome  and  inequitable.  The  attached 
circular  also  demands  that  all  bills  of  lading  shall 
be  of  a  uniform  size,  which  would  be  a  hardship, 
as  different  lines  of  business  demand  different 
shapes  and  forms  of  receipts.  Under  the  circum- 
stances the  traffic  committee  feels  that  it  would 
be  advisable  to  submit  this  bill  of  lading  to  Mr. 
Mayer  for  an  opinion  as  to  whether  it  can  be  en- 
forced by  the  railroad  companies  as  it  stands  in 
regard  to  state  and  interstate  commerce  business. 
If  his  opinion  is  against  the  use  of  it,  we  feel  that 
a  circular  letter  should  be  sent  to  the  various  mem- 
bers of  the  association,  so  that  if  they  desire  they 
may  not  feel  compelled  to  agree  to  the  burdens 
imposed  by  this  document." 

I  have  examined  the  proposed  uniform  bill  of  lading. 
Eleven  different  conditions  limiting  or  affecting  the 
liability  of  the  carrier  are  printed  on  the  back  of  the 
bill  of  lading,  and  made  a  part  of  it.    To  these  condi- 
tions the  following  most  important  note  is  appended: 
"NOTE — Unless  otherwise  provided  in  the  classi- 
fication,  property  will  be   carried  at  the   tariff 
rates,  if  shipped  subject  to  the  conditions  of  the 
Uniform  Bill  of  Lading. 

If  the  shipper  elects  not  to  accept  the  said  tariff 
rates  and  conditions,  he  should  so  notify  the  Agent 
of  the  receiving  carrier  at  the  time  his  property 
is  offered  for  shipment,  and  if  he  does  not  give 
such  notice  it  will  be  understood  that  he  desires 
his  property  carried  subject  to  the  Uniform  Bill 
of  Lading  conditions,  in  order  to  secure  the  re- 
duced class  rates  thereon.  Property  carried  not 
subject  to  the  conditions  of  the  Uniform  Bill  of 
Lading  will  be  at  the  carrier's  liability,  limited 
only  as  provided  by  Common  Law  and  by  Laws 


328 

of  the  United  States  and  of  the  several  States,  in 
so  far  as  they  apply.  Property  thus  carried  will 
be  charged  twenty  per  cent,  higher  (subject  to 
minimum  increase  of  one  cent  per  one  hundred 
pounds)  than  if  shipped  subject  to  the  conditions 
of  the  Uniform  Bill  of  Lading,  and  the  cost  of 
Marine  Insurance  will  be  added  over  any  part  of 
the  route  that  may  be  by  water. ' ' 
The  situation  thus  presented  is  extremely  important, 
and  affects  all  shippers  alike  in  this  country. 

I.  There  is  no  rule  of  law,  in  the  absence  of  ex- 
press statute,  which  requires  a  railroad  to  give  a  bill 
of  lading  for  goods  delivered  to  it  for  transportation 
(Johnson  v.  Stoddard,  100  Mass.,  306),  unless  a  long 
established  custom  has  grown  into  a  legal  duty.     The 
carrier  has  the  right  to  adopt  such  regulations  as  to 
the  issuance  of  its  bills  of  lading  as  it  may  see  fit,  pro- 
vided such  regulations  are  reasonable.    I  do  not  believe 
that  there  is  anything  unreasonable  in  the  requirement 
that  bills  of  lading  be  of  uniform  size  and  that  three 
copies  of  the  same  be  signed. 

II.  The  uniform  bill  of  lading,  however,  attempts 
to  greatly  limit  the  carrier's  liability  at  common  law. 
The  liability  of  the  carrier  at  common  law  is  ordinarily 
that  of  an  insurer  against  all  losses  or  damage  not 
arising  from  the  act  of  God,  the  public  enemy,  the 
act  of  public  authority,  the  act  of  the  shipper  and  the 
inherent  nature  of  the  goods  shipped  (Hutchinson  on 
Carriers,  Sec.  170a). 

Sec.  33,  of  Chap.  114,  of  the  Railroad  Act  of  Illinois, 
provides  as  follows: 

That  whenever  any  property  is  received  by 
any  railroad  corporation  to  be  transported  from 
one  place  to  another,  within  or  without  this  state, 
it  shall  not  be  lawful  for  such  corporation  to  limit 
its  common  law  liability  safely  to  deliver  such 
property  at  the  place  to  which  the  same  is  to  be 
transported,  by  any  stipulation  or  limitation  ex- 
pressed in  the  receipt  given  for  the  safe  delivery 
of  such  property." 
See  also : 


329 

i 

Sec.  1,  Chap.  27,  Vol.  1,  S.  &  C.  Eev.  Stat.,  p. 

899. 

This  statute  does  not  in  terms  prohibit  a  common 
carrier  from  limiting  its  common  law  liability  by  spe- 
cial contract.  In  many  respects  a  carrier  may,  by 
express  contract,  limit  its  strict  common  law  liability. 
It  may  by  special  contract  limit  its  liability  to  such 
loss  or  damages  as  may  occur  on  its  own  line  of  car- 
riage, or  against  loss  by  fire  without  its  fault  or  against 
other  loss  not  attributable  to  its  negligence  or  that  of 
its  servants.  But  a  common  carrier  cannot,  even  by 
express  contract,  exempt  itself  from  liability  for  gross 
negligence  or  wilful  misconduct  or  misfeasance  com- 
mitted by  itself  or  its  servants  or  employes. 

Railway  Co.  v.  Chapman,  133  111.,  96,  and  cases 
cited. 

C.  &  N.  W.  Ry.  Co.  v.  Calumet  Stock  Farm  Co., 
194  111.,  9. 

Arnold  v.  I.  C.  R.  R.  Co.,  83  111.,  273. 

Brown  v.  Railroad  Co.,  36  111.  App.,  140. 
The  conditions  of  the  uniform  bill  of  lading,  there- 
fore, even  if  otherwise  valid  and  even  if  accepted  by 
the  shipper,  will  not  abrogate  the  liability  of  the  car- 
rier for  gross  negligence  or  wilful  misfeasance. 

III.  The  shipper  is  not,  however,  obligated  to  ac- 
cept the  uniform  bill  of  lading.  He  is  entitled  to  have 
his  goods  carried  under  the  strict  common  law  liability 
of  a  carrier.  The  carrier  can,  as  already  indicated,  by 
special  contract,  limit  its  common  law  liability.  Where 
the  carrier  has  two  rates  for  carrying  goods,  one,  if 
carried  under  a  special  contract  at  reduced  rates,  and 
the  other,  a  higher  rate  if  carried  under  the  common 
law  liability,  the  shipper  must  have  real  freedom  of 
choice  in  making  his  selection.  If  the  carrier  affords 
the  shipper  no  opportunity  to  contract  for  the  trans- 
portation of  freight  under  its  common  law  liability  as 
an  insurer,  but  receives  it  under  a  restricted  liability, 
a  contract  containing  such  restriction  is  void.  The 
fact  that  such  contract  was  knowingly  entered  into  by 
a  shipper  and  without  demand  for  a  different  contract, 
makes  no  difference. 


330 

And  if  the  carrier  accepts  freight  without  notifying 
the  shipper  of  a  provision  in  the  shipping  contract 
limiting  the  carrier's  liability,  in  consequence  of  a  re- 
duced rate,  or  that  he  can  pay  a  higher  rate  with  un- 
limited liability,  such  provision  limiting  the  carrier's 
liability  will  not  be  enforced. 

Railway  Co.  v.  Brown,  152  111.,  439. 

IV.  To  uphold  a  special  contract  restricting  liabil- 
ity of  the  carrier,  there  must  be  some  consideration 
therefor  moving  to  the  shipper.     A  common  carrier 
is  bound  by  law  to  carry  without  any  contract  limit- 
ing its  liability.     If  the  compensation  of  the  carrier 
is  fixed  by  law,  a  contract  to  carry  for  the  legal  rate 
would  not  be  a  sufficient  consideration  for  a  reduction 
of  the  carrier's  liability.    But  if  the  rate  is  not  fixed 
by  law,  and  the  parties  are  left  free  to  make  their  own 
contracts,  some  courts  have  held  that  the  law  will  pre- 
sume that  the  carrier,  in  fixing  the  rate,  has  made 
an  allowance  for  the  restriction  of  its  common  law 
liability. 

Hutchinson  on  Carriers,  Sec.  278  (2d  Ed.). 

Rubens  v.  Steamship  Co.,  20  N.  Y.  S.,  481. 

Brown  v.  R.  R.  Co.,  36  111.  App.,  140. 
Many  courts  have  held  that  if  in  fact  there  was  no 
special  consideration   or   reduced  rate,   this  may  be 
shown  and  the  restriction  will  be  inoperative. 

5  Ency.  of  Law  (2d  Ed.),  pp.  298-299. 

R.  R.  Co.  v.  McCarty,  82  Tex.,  608. 

Cross  v.  Graves,  4  Tex.  App.,  100. 

McFadden  v.  R.  R.  Co.,  92  Mo.,  343. 

R.  R.  Co.  v.  Cravens,  57  Ark.,  112. 

R.  R.  Co.  v.  Spawn,  57  Ark.,  127. 

V.  The  act  of  Illinois  of  May  2, 1875  (Laws  of  1873, 
p.  135),  3  S.  &  C.  Eev.  Stat.  of  111.,  pp.  3309-3316,  pro- 
hibits unjust  discrimination  and  provides  that  a  rail- 
road company  shall  not  charge  for  the  transportation 
of  freight  for  any  distance  the  same  or  greater  amount 
of  compensation  than  is  charged  for  the  transportation 
in  the  same  direction  of  the  same  quantity  of  freight 
of  the  same  class  over  a  greater  distance. 


331 

The  act  also  provides  that  the  railroad  and  ware- 
house commissioners  shall  make  a  schedule  of  reason- 
able and  maximum  rates  for  the  transportation  of 
freight. 

The  provisions  of  the  Interstate  Commerce  Act  and 
the  recent  Elkins  law  are  set  forth  in  my  opinion  of 
May  25,  1903,  in  answer  to  the  query  of  Hibbard, 
Spencer,  Bartlett  &  Co.  That  act,  among  other  things, 
provides  that  every  carrier  shall  print  and  file  sched- 
ules of  its  rates,  and  prohibits  such  carrier  from 
charging  different  rates  from  those  published  in  the 
schedules. 

The  Elkins  law  provides  that  the  rates  published 
and  filed  shall  conclusively  be  presumed  to  be  the  legal 
rates. 

The  rates  in  the  published  tariffs,  filed  with  the  In- 
terstate Commerce  Commission,  are  therefore  the  legal 
rates  on  all  interstate  shipments.  The  rates  fixed  by 
the  Railroad  Commission  of  Illinois  are  the  legal  rates 
for  shipments  which  are  intra-state. 

VI.     The  uniform  bill  of  lading  provides  that 
"property  will  be  carried  at  the  tariff  rates,  if 
shipped  subject  to  the  conditions  of  the  uniform 
bill  of  lading." 

and  that  property,  shipped  under  carrier's  (common 
law)  liability,  will  be  charged  twenty  per  cent,  higher. 

If,  therefore,  the  "tariff"  rates  refer  to  the  regular 
published  rates  and  that  goods  shipped  under  car- 
rier's liability  are  in  fact  charged  20  per  cent,  higher, 
I  am  of  the  opinion  that  the  restriction  of  liability  is 
without  consideration  and  inoperative.  If,  however, 
the  rate  charged  where  the  carrier  has  unrestricted 
liability  is  the  regular  rate,  and  the  rate  for  limited 
liability  is  in  fact  twenty  per  cent,  less  than  the  regu- 
lar rate,  then  the  proposed  restrictions  may  be  valid. 
The  shipper,  however,  is  entitled  to  freedom  of  choice, 
as  heretofore  referred  to,  and  if  this  is  not  given  him, 
the  restriction  may  not  be  operative.  If  the  tariff 
rates  on  interstate  shipments  are  published  with  the 
Commission,  the  court  cannot  presume  that  the  carrier 


332 

gave  a  reduced  rate  in  consideration  of  a  restricted 
liability.  As  the  court  said  in  Wehman  v.  Railway  Co. 
(Minn.),  59  N.  W.  Eep.,  p.  547: 

"But  in  such  a  case  as  this,  any  abatement  of 
rates  is  forbidden  by  act  of  congress,  and  there- 
fore none  can  be  presumed.     The  tariff  of  joint 
rates  in  the  case  makes  no  mention  of  any  limita- 
tion of  liability.     They  are  taken,  therefore,  as 
rates  established  for  carriage  with  full  common 
carrier's  liability;  and  under  the  act  of  congress 
no  abatement  could  be 'made  to  support  a  contract 
for  a  limited  liability.    The  clause  is  void  for  want 
of  a  consideration  to  support  it." 
VII.     I  assume  that  the  carrier  has  not  two  pub- 
lished rates,  one  with  and  the  other  without  carrier's 
liability.     If  two  such  rates  do  in  fact  exist  and  the 
shipper  is  given  real  freedom  of  choice,  the  shipper 
has  no  cause  of  complaint  if  he  accepts  a  reduced  rate 
in  consideration  of  a  restrictive  liability.    This  accept- 
ance may  be  evidenced  by  an  express  assent  or  by  the 
signing  by  the  shipper  of  the  bill  of  lading. 

I  do  not  pass  upon  the  binding  effect  of  any  particu- 
lar condition  in  the  uniform  bill  of  lading.  The  above 
remarks  apply  to  limitations  of  the  common  law  liabil- 
ity of  the  carrier.  There  are  stipulations  in  the  uni- 
form bill  of  lading  which  do  not  actually  limit  the  com- 
mon law  liability  of  the  carrier,  such  as  a  limitation  of 
liability  to  losses  occurring  on  the  carrier's  own  lines, 
etc.  Such  stipulations  are  valid,  whether  any  special 
consideration  moving  from  the  carrier  is  shown  or  not. 

NOTE: — The  above  opinion  resulted  in  a  complaint  and  hearing  be- 
fore the  Interstate  Commerce  Commission,  and  as  a  result  of  the  hear- 
ing a  committee  of  the  carriers  and  shippers  was  appointed  to  agree 
upon  a  new  Uniform  Bill  of  Lading.  This  committee  arrived  at  an 
agreement  in  1907,  and  on  July  8,  1907,  the  Interstate  Commerce  Com- 
mission promulgated  an  order  for  all  the  railroads  in  the  country  to 
show  cause  why  the  bill  of  lading  agreed  upon  by  the  shippers  and 
carriers  should  not  be  adopted  by  all  the  railroads  in  the  country.  The 
matter  is  still  pending  at  this  date  (Dec.,  1907)  before  the  Commission. — 
Ed. 


333 


WHETHER  INSTALLATION   OF  MACHINERY  IN   WISCONSIN   BY 
AN  ILLINOIS  CORPORATION  CONSTITUTES  DOING  BUSINESS. 

RIGHT  TO  RECOVER  ON  A  QUANTUM  MERUIT  WHEN  TRANSAC- 
TION IS  COVERED  BY  AN  EXPRESS  CONTRACT. 

(Barnard  &  Leas  Mfg.  Co.,  March  11,  1904.) 

"We  enclose  you  a  copy  of  a  contract  with  Mr. 
— ,  Crivitz,  Marinette  County,  Wis.,  taken 
by  our  agents,  -  -  of  Minneapolis, 

Minn.,  but  accepted  and  approved  by  us  at  Moline, 
111.  The  machinery  was  all  shipped  from  Moline, 
and  upon  his  failure  to  pay  as  per  terms  of  con- 
tract, we  placed  the  same  in  the  hands  of  Messrs. 
— ,  attorneys  at  Marinette,  Wis., 
Who  filed  a  mechanic's  lien.  Our  rights  in  this 
matter  have  been  contested  by  the  Austrian  con- 
sul at  Milwaukee  on  account  of  our  not  having 
filed  necessary  papers  as  a  foreign  corporation  in 
the  state  of  Wisconsin,  we  claiming  that  in  view 
of  the  contract  having  been  approved  and  accepted 
at  Moline,  111.,  and  the  machinery  having  been 
shipped  from  Moline,  111.,  and  some  of  it  from 
Minneapolis,  Minn.,  that  it  was  interstate  business. 

In  the  opinion  of  our  attorneys,  the  weak  part 
of  the  contract  is  that  in  the  contract  we,  the 
first  party,  agree  to  do  the  millwright  work  or  the 
work  of  installing  the  machinery. 

We  would  like  to  have  the  opinion  of  Mr.  Levy 
Mayer,  attorney  for  the  Illinois  Manufacturers' 
Association,  upon  these  points  as  quickly  as  pos- 
sible. A  settlement  has  been  offered,  which  is  not 
satisfactory  to  us,  as  it  will  entail  considerable 
loss  should  we  accept  it.  Our  attorneys  write  us 
as  follows: 

'What  bothers  us  most  is  the  provision  in  the 
contract  that  we  shall  furnish  the  labor  at  Crivitz 
to  put  the  machinery  under  the  contract  for  $4,700. 
This  might  be  held  to  be  a  contract  to  transact 
business  within  the  State,  and  if  so,  it  might  be 


334 

argued  that  the  contract  is  indivisible.  The  propo- 
sition, however,  does  not  strike  us  as  a  fair  con- 
struction of  the  contract.  The  contract  reads,  that 
the  Barnard  &  Leas  Manufacturing  Company  are 
to  furnish  on  cars  at  Moline,  a  soft  wheat  flour 
mill,  consisting  of  the  following  machinery,  which 
is  enumerated.  We  could  change  our  complaint 
and  sue  on  what  is  called  a  quantum  meruit,  that 
is,  on  an  implied  contract  to  pay  us  for  the  value 
of  the  machinery.' 

Kindly  give  the  matter  your  prompt  attention 
and  greatly  oblige,  as  we  wish  to  accept  or  reject 
the  proposition  and  will  be  largely  guided  by  Mr. 
Mayer's  opinion  in  the  matter." 
The  portion  of  the  contract  material  to  the  present 
question  is  as  follows: 

"The  first  party  (B.  &  L.  Mfg.  Co.)  to  furnish 
the  necessary  labor  to  build  the  following  bins 
and  hoppers :  *  * 

All  millwright  work  and  labor  necessary  to  place 
the  foregoing  list  of  machines  and  connections 
(except  as  specified)  in  complete  order  ready  for 
operation,  to  be  furnished  by  the  party  of  the  first 
part. 

The  first  party  shall  also,  if  necessary,  send  an 
experienced  miller  to  superintend  the  starting  of 
said  mill  when  completed,  or  as  soon  thereafter 
as  possible,  at  no  dollars  per  day,  and  traveling 
and  living  expenses  from  Moline  to  said  mill  and 
return,  including  his  living  expenses  while  on  this 
contract.     Said  wages  and  expenses  to  be  paid 
promptly  by  the  second  party  in  cash  on  demand." 
Leaving  out  the   above   quoted  provisions   of  the 
contract,  the  transaction  in  question  is  an  interstate 
transaction  and  does  not  subject  the  company  to  the 
operation  of  the  foreign  corporation  laws.  Under  these 
provisions   of   the   contract   the   company,   in   effect, 
agrees  to  install  and  connect  in  Wisconsin  the  mill 
which  it  sells  to  the  second  party.    The  transactions 
in  question  are  very  close  to  the  borderline  which  sepa- 
rates interstate  commerce  from  that  which  is  intra- 


335 

state  or  domestic.  Of  course  if  the  transaction  is 
merely  a  single  or  isolated  one,  it  does  not  constitute 
"doing  business." 

Cooper  Mfg.  Co.  v.  Ferguson,  113  U.  S.,  727. 
But  assuming  that  the  transaction  is  not  an  isolated 
one,  I  am  inclined  to  the  opinion  that  the  installation, 
etc.,  of  the  mill  in  question  in  Wisconsin,  is  merely  in- 
cidental to  the  principal  business  of  the  company  and 
does  not  take  away  from  the  company  the  protection 
of  the  commerce  clause  of  the  Constitution. 
See: 

Milan  Mitt  &  Mfg.  Co.  v.  Gorton  (Tenn.),  26 
L.  E.  A.,  135. 

Caldwell  v.  North  Carolina,  187  U.  S.,  622. 
As  to  the  suggestion  of  the  Wisconsin  attorney  that 
the  complaint  be  amended  so  as  to  recover  on  a  quan- 
tum meruit,  that  is,  on  an  implied  contract  for  the 
value  of  the  machinery,  this  cannot  be  done.  The  only 
claim  the  company  has  is  on  the  contract.  Where  a 
suit  is  brought  upon  a  quantum  meruit,  the  defendant 
can  defend  by  showing  an  express  contract.  In  other 
words  there  cannot  be  an  implied  and  an  express  con- 
tract covering  the  same  transaction. 

White  v.  Lueps,  55  Wis.,  222. 

Holmes  v.  Stummel,  24  111.,  370. 

Walker  v.  Brown,  28  111.,  378. 

Compton  v.  Payne,  69  111.,  354. 

Mead  v.  Degolger,  16  Wend.,  637. 

NOTE: — See  also  the  opinion  of  November  21,  1903,  in  answer  to 
the  query  of  American  Foundry  &  Furnace  Co. — Eid. 


LIABILITY    OF   A   EAILROAD   COMPANY    WHEN    GOODS   AKE    DE- 
LIVERED AT  A  NON-AGENCY  STATION. 

(J.  C.  Grant  Chemical  Company,  March  11,  1904.) 

"Does  the  fact  that  a  railroad  unloads  a  ship- 
ment on  the  platform  of  a  prepay  station,  that  is, 
a  non-agency  station  where  no  agent  is  stationed 
to  receive  the  goods,  constitute  a  delivery  of  the 
goods  to  the  consignee  and  relieve  the  railroad 


336 

from  all  liability  as  to  safe  delivery  of  these  goods 
to  the  consignee. 

We  made  a  shipment  to  a  prepay  station,  pre- 
paying the  freight,  but  the  consignees  did  not  re- 
ceive the  goods,  and  the  railroad  declines  to  en- 
tertain our  claim,  as  they  say  their  records  show 
that  the  goods  were  unloaded  on  the  platform  by 
the  conductor  and  this  constituted  delivery.  Have 
we  any  recourse?" 

The  rule  of  the  common  law  in  respect  to  ordinary 
carriers  by  land  (that  they  must  make  delivery  to  the 
consignee  at  his  ordinary  place  of  business  or  at  his 
home)  is,  as  a  matter  of  necessity,  so  far  relaxed  that 
a  delivery  at  the  warehouse  or  depot  of  the  railroad 
company,  provided  for  the  storage  of  goods,  is  suf^ 
ficient;  and  they  may  then  hold  them  as  warehouse- 
men, discharged  of  their  more  strict  liability  as  car- 
riers, until  they  are  applied  for  by  the  consignee. 

Eorer  on  Bailroads,  p.  1232. 

In  Schumacher  v.  C.  &  N.  W.  R.R.  Co.,  207  111.,  199, 
the  court,  quoting  from  a  prior  Illinois  decision,  says: 
"In  Gregg  v.  Illinois  Central  Railroad  Company 
the  action  was  for  damage  to  grain  by  water, 
which  has  been  stored  by  the  railroad  company  in 
a  warehouse  in  Augusta,  Gra.  The  grain  was  not 
received  promptly  upon  arrival  at  its  destination 
and  was  stored,  and  while  in  storage  was  injured 
by  a  flood.  In  speaking  of  the  duty  of  the  com- 
pany with  reference  to  such  freight,  this  court  said 
(p.  560) :  'The  railroad  company  was  not  required 
to  keep  the  corn  in  its  cars  on  track  indefinitely, 
and  although  the  consignee  was  in  default  in  not 
receiving  the  freight  after  reasonable  time  and 
opportunity  has  been  afforded  in  which  to  take  it, 
the  carrier  could  not  abandon  it,  but  was  required 
to  exercise  ordinary  and  reasonable  care  for  its 
preservation  as  warehouseman.  In  the  exercise  of 
such  care  it  might  leave  it  in  the  cars,  store  it  in 
its  own  warehouse,  assuming  the  liability  of  bailee 
or  warehouseman  therefor,  or  it  might,  with  the 
exercise  of  like  degree  of  care  in  selecting  a  re- 


337 

sponsible  and  safe  depository,  store  the  grain  in 
an  elevator  or  warehouse  at  the  expense  and  risk 
of  the  owner.'  " 

In  the  absence,  however,  of  circumstances  such  as 
are  pointed  out  in  the  opinion  of  the  court  quoted  be- 
low, there  is  a  reasonable  basis  to  justify  the  institu- 
tion of  suit  with  good  prospect  of  recovery. 

In  McMasters  v.  P.  R.,  69  Pa.,  374,  McMasters,  the 
consignee,  sought  to  recover  the  value  of  a  barrel  of 
sugar,  which  was  unloaded  from  a  local  freight  train 
on  the  platform  of  a  minor  station  where  the  company 
had  no  agent.  The  defense  was  that  the  local  freight 
train  stopped  at  all  the  stations  on  the  road,  and  at 
the  one  in  question,  at  which  the  business  was  not  of 
sufficient  importance  to  warrant  the  erection  of  ware- 
houses, or  to  have  freight  agents ;  that  there  was  a  no- 
torious custom,  which  had  been  acquiesced  in  by  all 
persons  in  the  neighborhood  receiving  freight,  to  de- 
liver goods  at  the  station  without  storing  them;  and 
that  plaintiff  had  been  in  the  habit  of  receiving  goods 
in  this  way  for  a  long  time  and  was  aware  of  the  cus- 
tom and  acquiesced  in  it.  The  court  held  that  a  custom 
may  control  the  general  law  of  liability  of  carriers  if 
reasonable,  continued  and  acquiesced  in  by  all  acting 
within  its  operations,  and  that  where  it  is  so  known 
and  practiced  by  the  community,  it  is  the  law  of  the 
particular  business  in  which  it  exists  and  the  parties 
are  presumed  to  have  contracted  with  respect  to  it. 
The  custom  relied  upon  was  held  to  be  a  good  custom. 
At  page  380  the  court  said: 

"In  all  cases  where  this  (usage  and  course  of 
business  modifying  liabilities  of  carriers)  is  relied 
upon  by  the  carrier  the  custom  or  usage  must  be 
clearly  proved  and  that  the  employer  knew  it,  or 
is  presumed  to  know  it,  by  reason  of  its  generality 
in  the  neighborhood  where  it  is  claimed  to  exist. 
*  *  *  The  case  below  was  well  ruled.  Both 
points,  the  delivery  of  the  sugar  and  the  custom 
were  found  on  proper  instructions,  in  favor  of  the 
defendant. ' ' 
Ordinarily  delivery  on  a  station  platform  is  not  a 


338 

sufficient  delivery  to  the  consignee,  yet  under  special 
circumstances  and  under  a  well-proved  custom  such 
'delivery  might  be  held  valid. 

NOTE: — See  the  opinion  of  July  20,  1906,  for  the  Illinois  Sewing 
Machine  Co.  upon  the  liability  of  a  railroad  for  goods  delivered  at  a 
"prepay  station,"  citing  the  following  cases  upon  the  question:  Allam 
v.  Penn.  B.  Co.,  183  Pa.,  174,  38  Atl.,  709  (1897)  ;  Hill  v.  8t.  L.  S.  W. 
Ey.  Co.,  67  Ark.,  402,  55  S.  W.  216  (1900)  ;  S.  $  N.  A.  B.  Co.  v.  Wood, 
66  Ala.,  168;  Wells  v.  Wilmington,  $c.,  B.  Co.,  51  N.  C.,  47;  L.  ^  N. 
B.  Co.  v.  Gilmer,  89  Ala.,  534,  7  So.,  654;  McMasters  \.  Penn.  B.  Co., 
69  Pa.,  374.— Ed. 


LEGALITY  OF  A  CONTRACT  OF  CONDITIONAL  SALE  RESERVING 
TITLE  IN  THE  VENDOR. 

(Gregory  Electric  Company,  March  11,  1904.) 

"We  enclose  herewith  a  copy  of  one  of  our  reg- 
ular contracts  which  you  will  observe  is  practically 
the  standard  contract  now  used  by  the  majority 
of  engine  and  dynamo  builders,  the  same  being 
a  conditional  contract.  Kindly  refer  this  contract 
to  your  legal  department  and  advise  us  whether 
you  consider  this  contract,  properly  signed  and 
executed,  acknowledged  and  recorded,  would  be  a 
good  contract  against  third  parties.  Or,  in  other 
words,  would  we  have  protection  against  other 
creditors  if  selling  a  machine  on  this  contract. 

The  clause  we  particularly  desire  information 
about  is  clause  21,  where  we  state  in  this  contract 
that  after  being  signed,  this  contract  is  to  be  con- 
strued, accepted  and  completed  in  Illinois.  We 
are  aware  that  in  Illinois  such  a  contract  is  no 
protection  against  other  creditors;  also  in  Louisi- 
ana. A  special  form  of  contract  must  be  used, 
stating  that  the  contract  was  completed  in  Louisi- 
ana :  otherwise  there  is  no  protection  against  other 
creditors. 

Would  you  consider  that  clause  21  invalidates 
the  contract  in  any  way?  In  our  business  we  em- 
ploy no  traveling  salesmen;  all  orders  are  sent 
to  our  office  here  at  Chicago  direct  by  our  cus- 
tomers, by  mail,  or  are  placed  here  in  the  house, 


and  you  will  note  all  contracts  are  subject  to  ap- 
proval by  an  executive  of  this  company,  here  at 
Chicago. 

We  think  a  large  number  of  your  members  have 
this  question  of  the  validity  of  a  contract  coming 
up  at  all  times,  and  think  the  matter  of  common 
interest  to  us  all.  If  you  agree  with  us,  kindly 
let  us  have  your  opinion." 

The  contract  referred  to  is  a  contract  of  bargain  and 
sale.  Clause  13  provides  as  follows: 

"The  title  to  the  apparatus  shall  not  pass  from 
the  Gregory  Electric  Company  until  all  payments 
hereunder  (including  deferred  payments  and  any 
notes  or  renewals  thereof,  if  any)  shall  have  been 
fully  made  in  cash;  and  the  purchaser  agrees  to 
execute,  or  cause  to  be  executed,  acknowledge  and 
deliver  to  the  Gregory  Electric  Company  all  legal 
instruments  necessary  and  appropriate  to  pre- 
serve the  title  of  the  Gregory  Electric  Company 
therein. ' ' 
Clause  21  provides  as  follows : 

"The  foregoing  proposal  is  subject  to  the  ap- 
proval of  an  executive  officer  of  the  Gregory  Elec- 
tric Company,  and  shall  not  be  binding  upon  the 
Gregory  Electric  Company  until  so  approved,  nor 
unless  accepted  by  the  purchaser  within  twenty 
days  from  the  date  hereof,  and  after  being  signed 
by  both  parties  and  approved  by  an  executive 
officer  of  the  Gregory  Electric  Company  this 
agreement  shall  become  and  is  hereby  declared  to 
be  a  contract  to  be  construed  as  accepted  and  com- 
pleted in  Illinois." 

In  Illinois  the  contract  in  question  constitutes  a 
"conditional  sale."  Such  a  sale  is  valid  as  between 
the  parties  to  it  in  every  State  in  the  Union.  As 
against  third  parties  the  rule  is  variant  in  the  different 
States.  In  this  State  if  a  person  agrees  to  sell  to  an- 
other a  chattel  on  the  condition  that  the  price  should 
be  paid  within  a  certain  time,  retaining  the  title  in 
himself  in  the  meantime,  and  the  chattel  is  delivered 
to  the  vendee  so  as  to  clothe  him  with  an  apparent 


340 

ownership,  a  bona  fide  purchaser  from  the  vendee,  or 
an  execution  or  attachment  creditor  of  the  vendee,  is 
entitled  to  protection  as  against  the  claim  of  the  orig- 
inal vendor. 

Gilbert  v.  National  Cash  Register  Co.,  176  111., 
288,  and  cases  cited. 

Harkness  v.  Russell,  118  U.  S.,  678. 

Hervey  v.  Rhode  Island  Loc.  Wks.,  93  U.  S., 
664. 

Dooley  v.  Pease,  180  U.  S.,  126. 

Murch  v.  Wright,  46  111.,  487. 

In  re  Alexander  Rodgers,  125  Fed.,  169. 
There  is  no  mode  under  our  law,  except  by  chattel 
mortgage,  duly  acknowledged  and  recorded,  by  which 
the  owner  of  personal  property  retaining  its  possession 
can  give  another  a  lien  on  it,  that  can  be  enforced 
against  creditors  and  subsequent  purchasers;  nor  will 
the  recording  of  a  contract  of  condition  sale,  under 
the  Chattel  Mortgage  Act,  give  it  the  effect  of  a  chat- 
tel mortgage. 

(Cases  cited,  supra.) 

The  only  safe  course  to  pursue  is  to  procure  the 
execution  of  a  chattel  mortgage  in  each  case. 

In  many  States  the  rule  is  the  same  as  in  Illinois. 
In  other  States  actual  notice  of  the  contract  on  the 
part  of  the  attaching  or  execution  creditors  will  be 
binding,  even  though  the  contract  is  not  recorded,  and 
in  other  States  the  contract  is  binding  on  the  creditor 
though  it  is  not  recorded  and  even  though  the  creditor 
has  no  notice. 

Clause  21  of  the  contract  under  consideration  is  valid 
and  binding.  This  clause  has  the  effect  of  making  the 
contract  an  Illinois  contract  to  be  construed  in  accord- 
ance with  the  laws  of  Illinois.  But  the  rights  of  attach- 
ing or  execution  creditors,  or  subsequent  purchasers, 
must  be  determined  by  the  law  of  the  State  where  the 
property  is  situated,  irrespective  of  where  the  owner 
is  domiciled  or  where  the  contract  was  made.  There- 
fore, though  the  present  contract  is  an  Illinois  con- 
tract, the  question  of  priority  as  between  the  original 
vendor  and  the  creditors  of  the  vendee  must  be  de- 


341 

termined  by  the  law  of  the  State  where  the  property  is 
situated  and  the  proceedings  are  had. 

Green  v.  Van  Buskirk,  5  Wall.,  307. 

Hervey  v.  E.  I.  Loco  Wks.,  93  U.  S.,  664. 

Dooley  v.  Pease,  180  U.  S.,  126. 

In  re  Rodgers,  125  Fed.,  169. 

I  am  therefore  of  the  opinion  that  the  contract  in 
question  is  a  valid  and  binding  contract  between  the 
parties.  Whether  or  not  it  is  valid  as  against  subse- 
quent purchasers  or  execution  or  attaching  creditors, 
must  be  determined  by  the  law  of  the  State  where  the 
property  is  located.  As  I  have  stated,  it  is  not  valid 
in  Illinois. 


NOTE: — See  the  opinion  of  April  20,  1907,  for  the  Comptograph 
Company  collating  the  requirements  of  the  laws  of  all  the  states  upon 
the  subject  of  conditional  sales. — Ed. 


AS  TO  WHAT  CONSTITUTES  INFRINGEMENT  OF  A  TRADE-MARK 
AND  WHO  IS  LIABLE  THEREFOR. 

(J.  E.  Tilt  Shoe  Company,  March  11,  1904.) 

"We  send  our  salesmen  out  and  obtain  orders. 
After  these  orders  are  received,  we  make  and  ship 
the  shoes  at  the  time  designated  in  the  order,  and 
we  make  these  shoes  and  stamp  them  or  print 
them  as  the  buyer  dictates,  and  in  many  cases  they 
have  instructed  us  to  put  on  their  shoes  the  name 
Regent.  In  such  cases  we  have  ordered  from  a 
Boston  firm  strapping  with  this  name  Eegent,  and 
also  have  instructed  our  box  makers  to  put  the 
name  Regent  on  the  end  of  the  cartons. 

Will  you  please  advise  us  what  is  our  position! 
Are  we  liable  in  carrying  out  the  instructions  from 
our  customers?" 

Three  things  are  requisite  to  the  acquisition  of  a 
title  to  a  trade-mark;  first,  the  person  desiring  to  ac- 
quire title  must  adopt  some  mark  not  in  use  to  dis- 
tinguish goods  of  the  same  class  or  kind  already  on 
the  market  belonging  to  another  trade;  second,  he 
must  apply  his  mark  to  some  article  of  traffic,  and 


342 

third,  he  must  put  his  article,  marked  with  his  mark, 
on  the  market. 

Schneider  v.  Williams,  44  N.  J.  Eq.,  391. 
Assuming  that  the  trade-mark  in  question  is  a  valid 
trade-mark,  it  protects  a  property  right.  The  cus- 
tomer cannot  violate  it  himself  and  his  order  to  the 
manufacturer  is  no  authority  for  its  infringement  by 
the  latter. 

The  right  to  a  trade-mark  is  a  property  right,  for  the 
violation  of  which  damages  may  be  recovered  in  an 
action  at  law,  and  the  continued  violation  be  restrained 
in  equity. 

U.  8.  v.  Steffens  (Trade-mark  Cases),  100  U. 

S.,  82,  92. 

Positive  proof  of  fraudulent  intent  is  not  required 
to  give  a  right  to  an  injunction,  where  the  proof  of 
infringement  is  clear. 

McLean  v.  Fleming,  96  U.  S.,  245,  253. 
Injunction  may  be  granted  even  though  defendant 
was  ignorant  that  the  devices  or  symbols  were  the 
property  of  another. 

Davis  v.  Kendall,  2  B.  I.,  566,  568. 
In  Millington  v.  Fox,  3  My.  &  Cr.,  338,  where  an  in- 
junction was  granted,  the  court  said : 

'  *  It  is  positively  denied  by  the  answer,  and  there 
is  no  evidence  to  show  that  the  defendants  were 
even  aware  of  the  existence  of  the  plaintiffs,  as  a 
company  manufacturing  steel.  *  *  *  In  short, 
it  does  not  appear  to  me  that  there  was  any  fraud- 
ulent intention  in  the  use  of  the  marks.  That  cir- 
cumstance, however,  does  not  deprive  the  plain- 
tiffs of  their  right  to  the  exclusive  use  of  these 
names." 

In  Cartier  v.  Carlile,  31  Beav.,  292,  where  an  injunc- 
tion was  granted  for  an  infringement  of  a  trade-mark, 
the  court  said: 

* '  I  am  of  opinion  that  the  liability  to  account  for 
the  profits  is  incident  to  the  injunction,  and  that 
the  fact  of  the  defendant  not  knowing  to  whom 
the  trade-mark  he  copies  belongs,  does  not  in  the 
slightest  degree  affect  the  right  of  the  owner  to  an 


343 

injunction,  and  to  an  account  of  the  profits,  as 
soon  as  he  ascertains  that  it  is  imitated  and  used. ' ' 

In  Barnett  v.  Leuchars,  13  L.  T.  N.  S.,  495,  plaintiff 
and  defendant  made  similar  fireworks.  At  the  request 
of  his  customer  and  without  making  any  false  repre- 
sentations, defendant  placed  his  fireworks  in  old  boxes 
bearing  the  plaintiff's  labels.  An  injunction  was 
granted  and  the  court  said: 

''According  to  the  principle  which  governs  these 
cases,  an  owner  has  an  exclusive  right  to  a  trade- 
mark or  label  and  that  right  is  to  be  regarded  as 
his  property." 

In  Tonge  v.  Ward,  21  L.  T.  N.  S.,  480,  plaintiffs  and 
defendants  were  both  manufacturers;  plaintiffs 
marked  their  goods  with  the  name  ' '  Tonge 's " ;  de- 
fendant, in  obedience  to  an  order  from  a  customer, 
affixed  to  goods  made  by  defendant  tickets  with  the 
name  "Tung's";  injunction  was  granted  for  infringe- 
ment. 

In  Rose  v.  Loftus,  47  L.  J.  Ch.,  576,  plaintiff  and  de- 
fendant were  manufacturers  of  lime  juice.  Defendant 
at  a  customer's  request,  filled  some  of  plaintiff's  spe- 
cially molded  bottles  bearing  plaintiff's  name  and 
mark,  with  defendant's  product.  He  washed  off  the 
labels  of  plaintiff  and  replaced  them  with  his  own. 
Held,  that  defendant  acted  wrongfully  but  injunction 
did  not  issue  on  defendant  executing  bond  not  to  repeat 
the  act. 

In  the  Collins  Co.  v.  Walker,  7  W.  B.,  222,  the  plain- 
tiffs were  American  manufacturers  of  edge  tools,  which 
they  stamped  with  the  words  "Collins  &  Co.,  Hartford 
Cast  Steel,  Warranted";  the  defendant,  in  accordance 
with  a  customer's  orders,  made  knives  and  stamped 
them  with  the  plaintiff's  mark.  The  defendant  acted  in 
ignorance  of  the  plaintiff's  existence.  Injunction  was 
nevertheless  granted. 

In  Dixon  v.  Fawcus,  3  Ell.,  537,  "A"  and  "B"  were 
manufacturers.  In  accordance  unth  a  customer's  order, 
"A"  manufactured  firebricks  marked  with  the  trade- 
mark of  "  B. "  The  latter  brought  a  bill  for  an  account- 
ing and  an  injunction  against  "A,"  who  compromised 


344 

with  him  at  considerable  expense.  "A"  then  brought 
an  action  at  law  against  the  customer  for  the  loss 
which  his  order  had  occasioned.  In  this  second  suit 
it  was  held  that  "A"  was  justified  in  compromising 
the  earlier  litigation  with  the  other  manufacturer, 
although  innocent  of  intentional  fraud  since  that  would 
have  been  no  defense  in  equity  and  that  "A"  was 
entitled  to  recover  from  the  customer. 

The  New  York  Court  of  Appeals  in  Colman  v. 
Crump,  70  N.  Y.,  573,  said  where  the  defendant,  who 
was  a  label  printer,  sold  labels  bearing  an  imitation, 
that  it  was  not  necessary  to  establish  a  guilty  knowl- 
edge or  fraudulent  intent  on  the  part  of  the  wrong- 
doer. It  is  sufficient  that  the  proprietary  right  of  the 
party  and  its  actual  infringement  are  shown.  See 
Brown  on  Trade-Marks,  p.  64,  wherein  is  cited  a  case 
where  the  French  courts  went  so  far  as  to  hold  a 
printer  criminally  liable  who  executed  imitations  on 
the  order  of  a  third  party. 

Printing  and  selling  labels  in  imitation  of  a  trade- 
mark, with  the  purpose  of  enabling  the  parties  to  whom 
the  labels  are  sold  to  palm  off  their  goods  upon  the 
public  as  the  goods  of  the  owner  of  the  trade-mark  is 
a  violation  of  the  rights  of  such  owner. 

DeKuyper  v.  Witteman,  23  Fed.,  871. 

An  injunction  to  restrain  the  infringement  of  a  trade- 
mark will  not  be  refused  because  defendants  bought 
boxes  with  infringing  labels  on  them  without  knowing 
of  the  infringement. 

Cuervo  v.  Landauer,  63  Fed.,  1003. 

The  use  by  a  manufacturer  of  imitative  labels  and 
devices,  in  connection  with  an  inferior  article,  which 
is  sold  to  retailers  at  a  reduced  price,  with  the  purpose 
and  result  of  enabling  them  to  sell  it  to  customers  as 
the  goods  of  another  will  be  enjoined. 

Garrett  v.  Garrett  &  Co.,  78  Fed.,  472. 

It  is  no  sound  objection  to  the  granting  of  a  pre- 
liminary injunction  that  defendants  are  sellers  only, 
and  not  manufacturers. 

Hansen  v.  Siegel  &  Cooper,  106  Fed.,  690. 

The  amount  recoverable  from  a  wilful  infringer  is 


345 

not  limited  to  the  profits  made  by  the  defendant,  but 
includes  also  the  damages  resulting  to  the  complainant 
from  the  injury  to  his  business  or  the  reputation  of 
his  goods. 

Hennessey  y.  W.  L.  Co.,  103  Fed.,  90. 
A  party  whose  trade-mark  has  been  violated,  is  en- 
titled to  recover  all  the  profits  realized  from  the  sale 
of  the  spurious  articles,  and  also  all  damages  resulting 
from  such  violation. 

Gato  v.  Cigar  Co.,  6  L.  B.  A.  (Fla.),  823,  827. 

Pelts  v.  Eichele,  62  Mo.,  171. 

Marsh  v.  Billings,  1  Gush.,  322. 

Atlantic  Milling  Co.  v.  Robinson,  20  Fed.  Rep., 

217. 

Hostetter  v.  VowinUe,  I  Dill.,  329. 
Pitts  v.  Hall,  2  Blachtf.,  229. 

The  owner  of  a  trade-mark  is  entitled  to  nominal 
damages  for  the  violation  of  his  trade-mark,  although 
it  is  not  shown  that  he  sustained  actual  damages  and 
although  the  defendant's  articles  are  not  inferior  to 
his  own. 

Gato  v.  Cigar  Co.,  6  L.  B.  A.,  823,  827  (Fla.). 
Thomson  v.  Winchester,  19  Pick.,  214. 
Conrad  v.  Brewing  Co.,  8  Mo.  App.,  277. 
"The  proper  measure  of  damages  in  case  of 
violation  of  a  trade-mark  is  generally  the  profits 
realized  upon  the  sales  of  the  goods  to  which  the 
spurious  marks  are  attached         *    *    The  actual 
damages  would  seem,  as  a  general  rule,  to  be  all 
that  could  be  reasonably  claimed.    There  may  be 
exceptions.     Cases  may  arise  where  the  circum- 
stances are  aggravated,  and  such  as  to  repel  alto- 
gether the  bona  fides  of  the  infringement.     Each 
case  must  necessarily  depend  upon  its  own  cir- 
cumstances. ' ' 

Brown  on  Trade-Marks,  sec.  503. 
Under  the  cases  cited  injunction  will  lie  against  the 
buyer  who  orders  the  shoes,  against  the  manufacturer 
who  makes  and  packs  the  shoes,  and  against  the  other 
manufacturer  who  makes  the  strapping  with  the  in- 
fringed name  upon  it  and  against  the  box-makers  who 


346 

make  the  cartons  bearing  the  infringed  name ;  all  this 
is  upon  the  assumption  that  the  word  "Regent"  is  an 
infringement.  Upon  that  question,  however,  my  opin- 
ion is  not  asked. 


THE  FOREIGN  CORPORATION  LAW  OF  MINNESOTA  AND 
WHETHER  THE  MAINTENANCE  OF  A  TRANSFER  HOUSE  CON- 
STITUTES "DOING  BUSINESS." 


(Rock  Island  Plow  Company,  March  16,  1904.) 

' '  Acknowledging  your  favor  of  February  6th,  we 
have  received  from  Secretary  Glenn  your  opinion 
as  to  the  Manufacturers '  Association  taking  a  test 
case  to  the  court  of  final  resort  to  secure  decision 
under  the  Minnesota  statutes  with  reference  to 
doing  business  in  that  State,  and  as  we  have  al- 
ready found  several  of  the  members  who  are  inter- 
ested in  like  manner  as  ourselves,  who  have  found 
that  on  goods  being  sold  in  Minnesota  defense  is 
interposed  because  of  failure  to  comply  with  the 
State  laws,  we  would  like  to  have  this  matter  re- 
ceive your  further  consideration. 

While  we  presume  you  are  already  familiar  with 
the  decision  of  the  United  States  Supreme  Court 
in  re  E.  M.  Caldwell  v.  State  of  North  Carolina, 
23  U.  S.  Supreme  Court  Rep.,  229,  the  similarity 
of  the  two  cases,  manner  of  doing  business;  that 
in  question,  of  taking  orders  for  pictures  and 
frames,  shipping  them  into  the  State  and  assem- 
bling them  there  by  the  work  of  an  agent  and  col- 
lector, we  feel  certain  of  a  like  favorable  decision 
on  the  question  of  our  manner  of  transacting  busi- 
ness, and  while  in  your  opinion  you  refer  to  the 
decision  of  the  Supreme  Court  of  Minnesota  in 
Heilman  Brewing  Co.  v.  Peimeisl,  as  this  last  was 
not  taken  to  the  Supreme  Court  of  the  United 
States  we  cannot  see  that  it  is  more  than  the  con- 
struction of  the  Minnesota  Supreme  Court,  par- 
ticularly because  of  the  difference  between  the 
brewing  company's  manner  of  doing  business  and 


347 

that  of  ourselves  as  compared  with  the  decision 
in  re  Caldwell  v.  State  of  North  Carolina. 

We  would  particularly  like  to  have  you  favor  us 
with  your  views  after  further  consideration." 

I  am  familiar  with  Caldwell  v.  State  of  North  Caro- 
lina, 187  U.  S.,  622,  and  have  several  times  referred  to 
it  in  opinions  rendered  to  the  Association. 

(See  opinions  of  October  26,  1903,  and  No- 
vember 21,  1903.) 

The  facts  in  that  case  were  as  follows:  A  portrait 
company,  carrying  on  business  here,  obtained  orders 
through  an  agent  in  another  State  for  pictures  and 
frames.  In  filling  the  orders  it  shipped  the  pictures 
and  frames  in  separate  packages,  for  convenience  in 
packing  and  handling,  to  its  own  agent,  who  placed  the 
pictures  in  their  proper  places  or  frames  and  delivered 
them  to  the  persons  ordering  them.  The  court  held 
that  this  was  a  transaction  of  interstate  commerce.  ' 

The  situation  of  the  portrait  company  in  the  Cald- 
well case  differs  materially  from  that  of  the  plow  com- 
pany in  the  present  case.  In  the  first  place  the  por- 
traits were  all  shipped  in  pursuance  of  prior  orders. 
No  stock  of  goods  was  kept  in  North  Carolina,  The 
plow  company  maintains  a  "transfer  house"  and  there 
keeps  a  stock  of  goods,  which  it  delivers  to  its  cus- 
tomers upon  orders  which  may  thereafter  be  received. 
The  holding  in  the  Caldwell  case  merely  was  that  the 
method  of  delivery  was  no  different  in  legal  effect  than 
if  the  goods  were  shipped  direct  to  the  purchaser. 

I,  therefore,  re-affirm  my  former  opinion. 

NOTE: — See  the  opinion  of  July  13,  1907,  for  the  Kingman  Plow 
Co.  as  to  whether  the  maintenance  of  a  transfer  house  is  ' '  doing  busi- 
ness," and  the  cases  of  Rock  Island  Plow  Co.  v.  Peterson,  93  Minn.,  356, 
101  N.  W.,  616  and  Thomas  Mfg.  Co.  v.  Knapp,  112  N.  W.,  989  (Minn. 
1907).— Ed. 


348 


THE  FOREIGN  CORPORATION  LAW  OF  MASSACHUSETTS  AND 
WHETHER  THE  SHIPMENT  OF  GOODS  ON  CONSIGNMENT 
BY  A  FOREIGN  CORPORATION  CONSTITUTES  DOING  BUSI- 
NESS. 

(Wilcox  Manufacturing  Company,  March  17,  1904.) 

"A  claim  is  advanced  by  the  commissioner  of 
corporations  of  the  commonwealth  of  Massachu- 
setts that  we  are  doing  business  in  the  State  in 
violation  of  Chapter  No.  437  of  the  Act  of  1903. 

Briefly  stated,  the  facts  are  as  follows :  We  are 
selling  goods  manufactured  here  in  Aurora  to  the 
general  hardware  trade  throughout  the  New  Eng- 
land states.  The  selling  end  of  the  business  is 
conducted  by  the  Hardware  Agency  Company, 
of  Boston,  to  whom  we  make  consignment  of 
goods  for  the  purpose  of  facilitating  delivery  in 
that  section.  We  pay  no  rent  for  warehouse  or 
office  privileges,  nor  do  we  furnish  or  pay  for 
any  services  in  connection  with  the  handling  of 
these  goods,  except  as  the  Hardware  Agency 
Company  may  earn  commissions  in  making  sales 
thereof. 

In  addition  to  this  arrangement,  we  employ  a 
traveling  salesman  in  New  England  on  whose  sales 
some  goods  are  delivered  from  this  Boston  stock, 
but  who  is  not  authorized  to  open  new  accounts 
without  the  .approval  of  this  office,  and  the  ma- 
jority of  his  orders  are  filled  by  direct  shipment 
from  here.  Prices,  terms  and  settlements  are 
made  by  and  with  this  office  in  every  instance.  We 
should  like  to  have  the  opinion  of  your  counsel  on 
the  question  of  whether  or  not  we  are  'doing  busi- 
ness' in  the  State  of  Massachusetts  in  violation 
of  the  law  above  cited. 

The  matter  is  covered  by  my  opinion  to  the  Asso- 
ciation of  July  19,  1901,  in  answer  to  the  query  of 
Darling  &  Co.  As  I  stated  in  that  opinion,  the  ques- 
tion of  whether  or  not  a  corporation  which  consigns 
its  goods  to  agents  in  another  State,  who  sell  the  same 


349 

on  commission,  constitutes  "doing  business"  in  that 
other  State,  is  a  question  of  doubt  upon  which  there 
is  much  conflict  in  the  authorities.  Since  that  opinion 
has  been  rendered  the  following  decisions  have  been 
rendered : 

In  re  Hovey's  Estate,  48  AtL,  311  (Pa.).  (Feb- 
ruary, 1901.) 
Waller  v.  Rothfield,  73  N.  Y.,  141   (October, 

1901). 

Union  Cloak  &  Suit  Co.  v.  Carpenter,  102  111. 
App.,  339.    (May  23, 1902.) 

In  re  Hovey's  Estate,  48  AtL  Eep.  (Pa.),  311,  the 
question  arose  as  to  whether  the  consignment  of  goods 
by  a  foreign  corporation  constituted  "doing  business," 
but  the  question  was  not  passed  upon,  the  court  re- 
marking that  it  was  "not  free  from  doubt." 

In  Waller  v.  Rothfield,  73  N.  Y.  S.,  141,  a  commis- 
sion merchant  in  the  city  of  New  York  took  from  a 
dealer  an  order  for  goods  which  he  forwarded  to  a 
foreign  corporation,  which  sent  the  goods  direct  to  the 
dealer.  It  was  held  that  the  foreign  corporation  was 
not  doing  business  in  New  York. 

In  Union  Cloak  &  Suit  Co.  v.  Carpenter,  102  111. 
App.,  339,  the  plaintiff  was  a  New  Jersey  corpora- 
tion. It  sent  two  bills  of  consignment  goods  to  Chi- 
cago, marked  "Memorandum  Goods."  The  title  to 
the  goods  remained  in  the  plaintiff,  subject  to  the  right 
of  the  consignee  to  sell  as  many  as  they  could  at  the 
price  fixed  by  the  plaintiff.  When  the  goods  were 
sold  the  money  was  to  be  sent  to  plaintiff,  and,  if  not 
sold,  the  goods  were  to  be  returned  to  the  plaintiff. 
It  was  held  that  the  plaintiff  was  doing  business  in 
Illinois. 

In  view  of  the  tendency  of  the  courts,  the  chances 
are  perhaps  a  little  more  than  even  that  the  Massa- 
chusetts court  would  be  inclined  to  hold  that  the  Wilcox 
Manufacturing  Company  is  doing  business  there.  The 
question  is  not  at  all  free  from  doubt.  I  can  find  no 
controlling  decision  by  the  courts  of  Massachusetts. 
If  the  expense  is  not  in  the  way  the  facts  justify  mak- 
ing a  test  case  in  that  State.  A  good  deal  may  depend 


350 

upon  the  terms  of  the  consignment  contract,  and  in 
whom  the  title  to  the  goods  remains,  and  in  whose 
name  the  goods  are  sold.  The  inquiry  does  not  cover 
these  suggestions. 

The  taking  of  orders  through  the  medium  of  a  trav- 
eling salesman  does  not,  however,  constitute  "doing 
business." 

THE  FOREIGN  CORPORATION  LAW  OF  MASSACHUSETTS  AND 
WHETHER  THE  CARRYING  OF  A  STOCK  OF  GOODS  AND 
MAKING  DELIVERIES  THEREFROM  CONSTITUTES  DOING 
BUSINESS. 

(Chicago  Varnish  Company,  March  16,  1904.) 

"Referring  to  the  Foreign  Corporation  law  in 
Massachusetts,  changes  in  which  went  into  effect 
August  1st,  1903,  we  have  your  circular  dated  Oc- 
tober 24,  1903,  containing  the  opinion  of  your  Mr. 
Levy  Mayer,  and  also  one  dated  July  18,  1901, 
on  what  constitutes  doing  business  in  a  foreign 
State.  We  seek  further  information  as  to  what 
constitutes  doing  business  in  Massachusetts,  and 
are  in  hopes  that  since  the  dates  mentioned  some 
decisions  have  been  rendered  which  might  have  a 
bearing  on  this  particular  case. 

Would  the  employment  of  a  resident  agent 
whose  sole  duties  would  consist  in  taking  orders 
for  shipment  from  Chicago  or  a  branch  at  New 
York,  by  an  Illinois  corporation,  necessitate  its 
compliance  with  the  requirements  of  this  act? 
And,  again,  would  the  storage  of  a  small  stock  of 
goods  from  which  delivery  could  be  made  under 
the  direction  of  the  resident  agent,  but  billed 
from  Chicago  or  New  York,  cause  it  to  be  amen- 
able to  the  foreign  corporation  laws  of  that 
State?" 

The  employment  of  a  resident  agent  for  the  pur- 
pose of  taking  orders  for  the  shipment  of  goods  from 
without  the  State  is  not  doing  business,  and  does  not 
necessitate  compliance  with  the  foreign  corporation 
laws. 


351 

Whether  the  storage  of  a  small  stock  of  goods  in 
Massachusetts  from  which  delivery  is  made  under  the 
direction  of  the  resident  agent  constitutes  "doing  busi- 
ness" presents  a  more  difficult  question. 

In  an  opinion  rendered  June  21,  1901,  in  answer 
to  the  query  of  the  Wrisley  Company,  I  stated  that 
where  a  company  kept  a  small  stock  of  goods  in  a 
foreign  State,  in  the  hands  of  its  traveling  salesmen, 
who  out  of  such  stock,  but  not  in  the  ordinary  course 
of  business,  in  isolated  instances  executed  "hurry 
orders,"  that  this  probably  did  not  constitute  doing 
business.  In  numerous  other  opinions  I  have  stated 
that  single  or  isolated  transactions  did  not  constitute 
doing  business. 

In  an  opinion  to  Deere  &  Co.  under  date  of  October 
30,  1903,  I  stated  that  the  maintenance  of  a  transfer 
house  in  a  foreign  state  where  goods  were  stored  and 
from  which  deliveries  were  made,  probably  constituted 
"doing  business." 

I  am  inclined  to  the  opinion  that  the  keeping  of  a 
stock  of  goods  in  the  foreign  state  and  making  of  de- 
liveries therefrom,  in  the  manner  above  referred  to, 
constitutes  i l  doing  business ' '  there. 

See  further  on  this  subject  my  opinion  of  this  date 
to  Wilcox  Manufacturing  Company  on  the  Massa- 
chusetts law  in  question  as  it  relates  to  consignments. 

IN   REFERENCE  TO  F.   O.   B.   SHIPMENTS  AND  THE  EFFECT  OF 
THE  EQUALIZATION  OF  FREIGHT   RATES. 

(S.  A.  Maxwell  &  Co.,  March  19,  1904.) 
"We  have  read  the  opinions  given  by  Mr.  Levy 
Mayer  regarding  the  liability  of  the  consignor  for 
shipments  damaged  in  transit,  but  it  seems  our 
method  of  doing  business  is  different  from  the 
cases  quoted. 

We  equalize  freights  with  Kansas  City  and 
Omaha  as  well  as  various  other  cities,  on  all  of 
our  shipments.  We  do  not  quote  prices  f.  o.  b. 
these  different  cities,  but  agree  to  equalize  freight 
rates  from  these  points. 


352 

We  enclose  you  our  terms  and  would'  like  Mr. 
Mayer's  opinion  as  to  whether  we  are  liable  for 
goods  damaged  in  transit  between  Chicago  and 
Kansas  City  the  same  as  if  we  had  quoted  the 
goods  f.  o.  b.  Kansas  City.  We  do  not  prepay 
the  freight,  but  the  customer  deducts  for  the 
amount  when  he  remits  the  amount  of  the  bill. 
Of  course,  for  shipments  made  to  customers  in 
Kansas  City  they  deduct  the  entire  amount;  but 
for  points  beyond  Kansas  City  only  the  amount 
in  excess  of  what  it  would  be  if  the  shipment  orig- 
inated in  Kansas  City." 

The  "terms,"  which  I  assume  are  made  a  part  of 
the  contract,  are  as  follows : 

"EQUALIZATION  OF  FREIGHTS. 

On  shipments  of  wall  paper  made  during  the 
season  of  1903-4,  we  will  equalize  freight  with  the 
following  points: 

Buffalo,  N.  Y.  Hannibal,  Mo. 

Cedar  Rapids,  Iowa.  Kansas  City,  Mo. 

Chillicothe,  Ohio.  Minneapolis,  Minn. 

Cincinnati,  Ohio.  Omaha,  Neb. 

Cleveland,  Ohio.  Pittsburg,  Pa. 

Columbus,  Ohio.  St.  Joseph,  Mo. 

Dayton,  Ohio.  St.  Louis,  Mo. 

Des  Moines,  Iowa.  St.  Paul,  Minn. 

Detroit,  Mich.  Toledo,  Ohio. 

Grand  Rapids,  Mich. 

By  equalization  of  freight  we  do  not  mean 
that  we  pay  freight  to  destination,  but  should  the 
rate  from  any  of  the  above  places  to  your  ship- 
ping point  be  less  than  the  rate  from  Chicago 
send  us  your  freight  bills  after  the  receipt  of  each 
shipment  and  we  will  credit  the  difference  be- 
tween the  freight  paid  by  you  on  wall  paper  ship- 
ments made  by  us  and  what  you  would  be  obliged 
to  pay  were  the  goods  shipped  from  the  nearest 
equalization  point. 

We  request  freight  bills,  as  after  passing  credit 


353 

we  file  the  same  as  vouchers.  If  you  desire  to 
retain  the  original,  kindly  procure  duplicate  copy 
from  your  freight  agent  for  us,  and  we  will  ap- 
preciate the  favor. 

We  will  also  be  obliged  to  you  if,  when  send- 
ing us  freight  bills,  you  will  state  from  which 
equalizing  point  you  get  the  cheapest  rates,  and 
what  the  rate  on  wall  paper  from  that  point  is. 

We  ask  for  this  information  as  it  is  our  desire 
to  give  you  credit  for  all  you  are  entitled  to  as 
freight  equalization,  as  the  rates  given  in  the 
tariff  sheets  we  have  are  not  always  correct." 
On  October  24,  1903,  I  stated  in  an  opinion  to  Amer- 
ican Steel  &  Wire  Co.  that  in  the  absence  of  other 
qualifying  circumstances,  the  prepayment  of  freight 
by  the  consignor  constituted  the  carrier  the  agent  of 
the  consignor,  and  that  the  title  to  the  goods  shipped 
did  not  pass  until  delivery  to  the  consignee.  The  al- 
lowance of  freight  by  the  consignor  to  be  deducted 
from  the  purchase  price  is  the  same  in  legal  effect 
as  a  prepayment  by  the  consignor.  I  also  stated  in 
that  opinion  that  whether  the  title  to  goods  passes 
upon  the  delivery  to  the  carrier,  is  primarily  a  question 
of  intention  to  be  determined  from  the  contract  and 
from  all  the  facts  and  circumstances  of  the  case,  and 
that,  as  a  general  rule,  there  being  no  limiting  cir- 
cumstances, delivery  to  a  carrier  is  a  delivery  to  the 
consignee,  the  carrier  being  considered  as  the  agent 
of  the  consignee. 

The  present  situation  is  somewhat  different  from 
that  presented  in  the  opinion  above  referred  to.  The 
freight  is  allowed  to  the  consignee  for  the  sole  pur- 
pose of  meeting  competition  at  the  equalization  points. 
The  payment  of  freight  is  not  for  the  purpose  of  re- 
serving title,  nor  is  it,  in  effect,  an  agreement  to  de- 
liver f.  o.  b.  destination,  unless  there  is  some  other 
provision  in  the  contract  of  sale  with  which  I  am  not 
familiar.  The  question  whether  the  title  passes  is 
always  one  of  intention,  and  there  is  nothing  in  the 
present  case  showing  an  intention  to  reserve  to  the 
consignor  the  title.  Ordinarily,  the  prepayment  of 


354 

freight  by  the  consignor,  or  its  allowance  to  the  con- 
signee is  construed  as  an  agreement  to  deliver  "f.  o. 
b.  destination"  and  as  a  reservation  of  title  in  the  con- 
signor. But  the  purpose  of  the  equalization  arrange- 
ment is  here  otherwise  satisfactorily  explained,  and 
I  am  of  the  opinion  that  there  is  nothing  in  that  ar- 
rangement to  take  the  shipment  out  of  the  general 
rule  that  a  delivery  to  the  carrier  is  a  delivery  to  the 
consignee. 

I  advise,  however,  that  the  contract  or  proposition 
of  sale  contain  the  words  "Delivery  f.  o.  b.  Chicago," 
so  as  to  more  clearly  express  the  intention  to  pass  the 
title  to  the  consignee  and  make  Chicago  the  place  of 
sale. 

THE  PROPOSED  FEDERAL  STATUTE  PLACING  A  PENALTY  ON 
RAILROAD  COMPANIES  FOR  NOT  MOVING  FREIGHT  WITHIN 
FIVE  DAYS  AFTER  OFFER  OF  DELIVERY  HAS  BEEN  MADE. 

(Illinois  Manufacturers'  Association,  March  19,  1904.) 
I  have  your  communication  enclosing  draft  of  pro- 
posed federal  law,  submitted  by  the  Southwestern 
Lumbermen's  Association  to  the  Illinois  Manufac- 
turers' Association  for  its  endorsement,  and  on  which 
proposed  law  you  desire  my  opinion.  The  proposed 
law  reads  as  follows : 

"  SECTION  1.  It  shall  be  the  duty  of  every  rail- 
road company  engaged  in  carrying,  or  in  giving 
bills  of  lading  for  carrying  personal  property  and 
live  stock  between  points  in  different  States  or 
Territories,  upon  written  application  by  any  per- 
son for  the  carriage  of  any  such  property  or  live 
stock  over  the  railroad  of  any  such  company,  or 
over  such  railroad  and  any  connecting  line  or  lines 
of  railroad,  to  any  point  in  another  State  or  Ter- 
ritory, to  receive  and  commence  the  carrying 
thereof  within  five  days  after  the  offer  or  de- 
livery thereof  for  such  carriage  and  any  failure 
to  receive  or  commence  the  carrying  of  such  prop- 
erty or  live  stock  by  any  such  company  in  any 


355 

such  case  shall  entitle  the  person  making  such  ap- 
plication to  recover  from  such  company,  for  each 
car  necessary  for  such  carriage,  for  each  day 
after  said  five  days  during  which  such  failure 
shall  continue,  a  penalty  of  ten  dollars,  recover- 
able by  such  persons  as  plaintiff  against  said  com- 
pany as  defendant  bv  a  civil  action  in  a  circuit 
court  of  the  United  States  for  any  district  in 
which  such  company  may  have  an  office  and  agent 
for  the  transaction  of  any  business,  upon  whom 
summons  therein  may  be  served. 

SEC.  2.  The  provisions  of  the  next  preceding 
section  shall  apply  not  only  to  the  initial  railroad 
carrier  to  which  such  application  shall  be  made, 
but  also  to  any  connecting  railroad  carrier  en- 
gaged in  such  carrying  of  personal  property  and 
live  stock  on  any  railroad  line  or  part  of  line 
between  the  point  of  the  terminus  of  such  initial 
carrier  and  the  ultimate  point  of  shipment  to 
which  connecting  carrier  said  person  shall  make 
written  application  for  the  continued  carriage  of 
his  property  or  live  stock  by  such  connecting  car- 
rier. 

SEC.  3.  It  shall  be  the  duty  of  every  railroad 
company  engaged  in  carrying  personal  property 
or  live  stock  between  points  in  different  States  and' 
Territories  (whenever  so  engaged  as  a  sole  car- 
rier, or  as  an  initial  or  connecting  carrier  in  such 
carriage,  to  transport  and  haul  all  cars  furnished 
to  any  shipper  for  such  carriage  over  its  line  of 
railroad  from  the  starting  point  to  the  point  of 
destination  thereon  of  such  shipment,  in  such 
number  of  days  of  twenty-four  hours  each  as  will 
equal  the  number  resulting  from  the  division  by 
the  number  fifty,  of  the  total  number  of  miles  of 
carriage  of  said  shipment  over  its  line  of  railroad 
by  such  company  with  or  without  any  remainder 
by  such  division,  and  for  each  additional  day  oc- 
cupied in  such  carriage,  over  and  above  such  num- 
ber in  completing  such  shipment,  said  company 


356 

shall  forfeit  and  pay  to  the  consignee  of  such 
shipper  for  each  car  so  furnished  and  transported 
the  sum  and  penalty  of  ten  dollars  to  be  recovered 
by  him  in  the  manner  provided  in  the  first  sec- 
tion of  this  act. 

SEC.  4.  It  shall  not  be  a  defense  to  any  suit 
under  the  provisions  of  this  act,  that  the  com- 
pany sued  did  not  have  the  cars  necessary  for  any 
shipment  applied  for,  or  did  not  have  the  requisite 
equipment  for  the  carriage  or  hauling  thereof 
from  the  point  of  starting  to  the  destination  there- 
of, or  any  portion  thereof,  on  its  line  of  railroad. 
SEC.  5.  The  penalties  recoverable  under  this 
act  may  be  sued  for  in  one  single  count  or  state- 
ment in  the  petition  or  complaint,  without  hav- 
ing a  separate  count  for  the  penalty  of  each  car 
for  each  day  for  which  such  penalty  is  given  by 
this  act." 

Railroad  companies  are  endowed  with  special  and 
unusual  powers  with  an  express  view  to  their  render- 
ing to  the  public  a  service  adequate  to  the  needs  of 
the  country  through  which  their  lines  pass,  and  the 
common  law  (even  without  statute)  imposes  upon 
them  the  obligation  to  have  and  furnish  sufficient  fa- 
cilities for  reasonably  prompt  transportation  of  goods 
'tendered  for  carriage,  and  they  are  liable  for  a  failure 
to  transport  promptly,  whether  the  failure  is  due  to 
a  want  of  facilities  or  to  a  captious  refusal  to  carry. 
(7  Am.  &  Eng.  Ency.  of  Law,  p.  167.)  In  the  absence 
of  statute,  sudden  and  unusual  press  of  business  con- 
stitute a  defense  to  this  liability.  The  carrier  is  only 
bound  to  provide  facilities  for  such  transportation  as 
might  reasonably  have  been  anticipated.  The  car- 
rier, however,  must  give  the  shipper  notice  of  the  cir- 
cumstances and  must  obtain  his  assent,  express  or  im- 
plied. 

In  Dawson  v.  Chicago,  etc.,  R.  R.  Co.,  79  Mo.,  296, 
the  court  said : 

"When  the  facilities  of  the  carrier  are  adequate 
to  the  business  reasonably  to  be  expected,  the  de- 
lay caused  by  the  emergency  can  not,  of  course, 


357 

be  regarded  as  a  delay  caused  by  the  negligence 
of  the  carrier." 
To  the  same  effect  see: 

Helliwell  v.  Grand  Trunk  R.  Co.,  7  Fed.  Rep., 

68. 

Thomas  v.  Wabash  Ry.  Co.,  63  Fed.,  200,  202. 
Hutchinson  on  Carriers,  Sec.  292  (2nd  Ed.). 
I.  C.  R.  R.  Co.  v.  Gobi,  etc.,  64  111.,  128. 
Mich.  Cent.  v.  Burrows,  33  Mich.,  6. 
Louisville,  etc.,  R.  R.  Co.  v.  Queen  City  Coal 

Co.,  99  Ky.,  217. 

C.  &  A.  R.  R.  v.  Thrapp,  5  111.  App.,  502. 
Chicago,  etc.,  Ry.  Co.  v.  Wolcott,  141  Ind., 

267. 

Galena,  etc.,  R.  R.  Co.  v.  Rae,  18  111.,  488. 
P.  C.  C.  &  St.  L.  v.  Racer,  5  Ind.  App.,  209. 
Faulkner  v.  8.  P.  R.  R.,  51  Mo.,  311,  and 
P.  C.  &  St.  L.  R.  W.  Co.  v.  Morton,  61  Ind., 

539. 

By  way  of  transition  to  the  consideration  of  statu- 
tory rights  of  action  and  penalties,  it  may  be  ob- 
served that  the  right  to  recover  given  under  penal 
statutes  does  not  do  away  with  the  right  of  action 
existing  for  the  breach  of  the  carriers'  ordinary  com- 
mon law  duty  to  furnish  cars. 

Miss.,  etc.,  R.  Co.  v.  Graves   (Texas),  16  S. 

W.,  102. 

Branch  v.  Railroad,  77  N.  C.,  324. 
Section  84,  Chapter  114  of  Kurd's  Illinois  Statutes 
requires  every  railroad  corporation  within  the  State 
to  furnish,  start  and  run  cars  for  the  transportation 
of  property  offered  within  a  reasonable  time  previous 
thereto. 

Section  85,  Chapter  114,  provides : 

"In  case  of  refusal     *     *  to  take,  receive 

and  transport  property,  or  to  deliver 

the  same  within  a  reasonable  time,    *    *    *      such 
corporation    shall    pay    to    the    party    aggrieved 
treble  the  amount  of  damages  sustained  thereby, 
with  costs  of  suit;  and  in  addition  thereto   * 
forfeit  not  less  than  twenty-five  dollars  nor  more 


358 

.than  one  thousand  dollars—     *     *     *    the  treble 
damages  for  the  use  of  the  party  aggrieved,  and 
the  forfeiture  for  the  use  of  the  school  fund  of  the 
county  where  the  offense  is  committed. ' ' 
The  Supreme  Court  in  Schumacher  v.  C.  &  N.  W. 
Ry  Co.,  207  111.,  199,  said,  as  late  as  February  17,  1904, 
on  page  205 : 

"Upon  the  payment  or  tender  of  the  legal  tolls, 
freight  or  fare  such  companies  are  required  to 
furnish  cars  and  transport  freight  and  passen- 
gers within  a  reasonable  time,  and  upon  their 
failure  to  do  so  they  are  subject  to  treble  dam- 
ages to  the  party  aggrieved,  and  in  addition  there- 
to, a  penalty  or  forfeiture  to  the  school  fund  of 
the  State. 

(Kurd's  Stat.,  1899,  chap.  114,  pars.  84,  85.)" 
Statutes  of  this  character  must  be  especially  de- 
clared upon  in  manner  provided  by  statute.  The 
treble  damages  can  not  be  recovered  under  a  declara- 
tion for  failure  to  perform  duty  as  common  carriers 
generally. 

Ill  &  St.  L.  R.  &  C.  Co.  v.  People,  etc.,  19  111. 

App.,  141;  s.  c.,  122  111.,  506. 

It  was  held  in  the  above  case  that  there  is  no  duty 
to  furnish  cars  to  transport  coal  not  yet  mined. 

In  Galveston,  etc.,  Ry.  Co.  v.  Schmidt,  25  S.  W.  Kep. 
(Tex.),  452,  recovery  was  had  under  two  articles  of  the 
Texas  Civil  Code, — Article  4226  requiring  carriers  to 
furnish  sufficient  transportation  for  all  property, — and 
Article  4227  making  them  liable  for  damages  caused  by 
their  refusal  to  transport.  These  sections  embrace  in 
Texas  a  duty  prescribed  by  the  common  law  in  non- 
code  States. 

Article  4227a  provides  a  penalty  of  twenty-five  dol- 
lars per  day  if  cars  are  not  furnished  when  demand  is 
made  in  writing  and  freight  charges  deposited  or  ten- 
dered. The  requirements  of  the  latter  article  were  not 
strictly  complied  with  and  the  court  held  that  recovery 
of  the  penalty  could  not  be  had  but  that  damages  could 
be  recovered  under  Articles  4226  and  4227. 

In  McCarty  et  al.  v.  Gulf,  etc.,  Ry.  Co.,  79  Tex.,  38; 


359 

15  S.  W.  Rep.,  164,  which  was  an  action  on  a  contract 
to  furnish  cars,  the  court  said: 

"The  statutes  relied  upon  are  found  in  Sayles 
Civ.  St.,  Art.  4227a,  sections  1,  2.  These  statutes 
evidently  were  enacted,  not  for  the  purpose  of 
determining  who  should  have  power  to  make  such 
contracts,  but  for  the  purpose  of  prescribing  rules, 
by  compliance  with  which  the  shipper  should  have 
the  right  to  recover  a  penalty  in  case  the  carrier 
failed  to  furnish  cars  within  the  time  specified  for 
transportation  of  freight  tendered.  If  the  ship- 
per desires  to  recover  a  penalty,  he  must  entitle 
himself  to  it  by  compliance  with  the  law;  but,  if 
he  desires  only  to  recover  compensation  for  breach 
of  contract,  it  is  only  necessary  for  him  to  show 
a  valid  contract,  its  breach  and  extent  of  injury." 
To  the  same  effect  see : 

Receivers  of  M.,  K.  &  T .  Ry.  Co.  v.  Graves, 

et  al.,  16  S.  W.  (Tex.),  102. 

In  Branch  v.  R.  R.  Co.,  77  N.  C.,  324,  the  Supreme 
Court  of  North  Carolina  held  that  a  statute  which  pre- 
scribes a  forfeiture  of  $25  per  day  for  delay  of  local 
shipments  beyond  five  days  after  the  receipt  of  goods 
by  a  railroad  company,  is  constitutional,  and  a  valid 
exercise  of  the  police  power  of  the  State.  At  page  3^7, 
the  court  said : 

' '  The  legislature  considered  the  common  law  lia- 
bility as  insufficient  to  compel  the  performance  of 
public  duty.  It  must  have  thought  that  the  in- 
terest of  local  shippers,  for  whose  interest  princi- 
pally the  road  was  built,  and  against  whom  the 
company  had  a  complete  monopoly,  were  being 
sacrificed  by  wanton  delays  of  carriage  in  order 
that  the  company  might  obtain  the  carriage  from 
points  where  there  were  competing  lines  by  land 
or  water — as  from  Wilmington  or  Augusta.  It 
declared,  therefore,  that  the  maximum  delay 
should  be  five  days  after  a  receipt  for  carriage 
and  imposed  a  penalty  for  every  day's  delay  be- 
yond. The  act  does  not  supersede  or  alter  the 
duty  or  liability  of  the  company  at  common  law. 


360 

The  penalty  in  the  case  provided  for  is  super- 
added.  The  act  merely  enforces  an  admitted 
duty." 

In  Bagg  v.  Wilmington,  etc.,  R.  R.,  14  L.  E.  A., 
596,  the  same  court  held  that  the  s*ame  statute  was 
not  an  interference  or  regulation  of  interstate  com- 
merce, as  it  tends  to  expedite  such  commerce.  At  page 
599  the  court  said: 

"It  was  contended  on  the  argument  that  a  State 
could  not  compel  railroad  companies,  doing  busi- 
ness between  States,  to  provide  cars  for  removing 
freight  within  a  given  period  without  risk  of  im- 
pairing the  facilities  for  shipment  from  the  ad- 
jacent State  by  withdrawal  of  the  companies'  cars 
from  it.    That  is  evil  that  may  be  met  and  pro- 
vided against  by  the  enactment  of  a  similar  stat- 
ute in  the  adjacent  State,  and  thus  forcing  the 
company  to  provide  an  adjacent  supply  of  cars 
to  remove  its  freight  without  delay.    *     *    *    The 
palpable  purpose  of  the  Legislature  in  enacting 
our  statute  was  to  stimulate  trade  and  to  develop 
the  resources  of  its  people.     It  throws  the  aegis 
of  State  protection  alike  over  freight  consigned 
under  the  care  of  the  State  and  that  of  which  the 
general  Government  has  supervision." 
It  is  worthy  of  comment  that  these  State  statutes, 
which  are  similar  to  the  proposed  Federal  Law,  con- 
tain no  such  provision  as  Section  4  of  that  law,  that 
is, — a  section  absolutely  precluding  any  defense.    If  a 
State  statute  contained  such  a  provision  it  would,  in 
my  opinion,  conflict  with  the  Fourteenth  Amendment 
to  the  Constitution  of  the  United  States,  which  is  a 
limitation  on  the  power  of  the  States. 

In  Ohio  and  Miss.  Ry.  Co.  v.  Lackey,  78  111.,  55,  the 
court  held  to  be  void  a  statute  requiring  railroads  to 
pay  inquest  charges  and  burial  expenses  for  all  per- 
sons killed  by  their  trains. 
The  court  says: 

"An  examination  of  the  section  will  show  that 
no  default  or  negligence  of  any  kind  need  be  es- 
tablished against  the  railroad  company,  but  they 


361 

are  mulcted  in  heavy  charges  if,  notwithstand- 
ing all  their  care  and  caution,  a  death  should  oc- 
cur on  one  of  their  cars,  no  matter  how  caused, 
even  if  by  the  party's  own  hand.  *  *  It  is  not 
claimed  that  the  liability  attaches  for  a  violation 
of  any  law,  the  omission  of  any  duty  or  the  want 
of  proper  care  and  skill  in  running  their  trains. 
The  penalty  is  not  aimed  at  anything  of  this  kind. 
We  say  penalty,  for  it  is  in  the  nature  of  a  penalty, 
and  there  is  a  constitutional  inhibition  against 
imposing  penalties  where  no  law  has  been  violated 
or  any  duty  neglected." 

In  Bielenberg  v.  R.  R.  Co.,  2  L.  R.  A.,  813,  it  was 
held  that  a  Montana  statute  making  every  railroad 
corporation  liable  to  the  owner  for  damages  sustained 
by  injuring  or  killing  an  animal  by  running  trains, 
is  unconstitutional  as  attempting  to  create  the  liability 
without  reference  to  any  violation  of  law  or  omission 
of  duty.  It  was  held  invalid  as  depriving  the  defend- 
ant company  of  any  defense,  and  as  creating  a  con- 
clusive presumption. 

In  Wadsworth  v.  Union  Pacific  Co.,  18  Colo.,  600, 
S.  C.,  23,  L.  E.  A.,  812,  a  like  statute  fixing  the  lia- 
bility of  the  carrier  was  held  unconstitutional  because 
under  it  a  railway  company  might  be  denied  "equal 
protection  of  the  laws"  and  deprived  of  its  property 
' l  without  due  process  of  law. ' ' 
To  the  same  effect  see : 

Jensen  v.  U.  P.  R.  R.,  4  L.  R.  A.,  724. 
The  14th  Amendment  to  the  Constitution  of  the 
United  States  in  no  way  restricts  the  exercise  of  Fed- 
eral powers,  it  being  a  limitation  on  the  States.  It 
provides  that  no  State  "shall  deprive  any  person  of 
life,  liberty  or  property  without  due  process  of  law," 
etc.  The  courts  have  held  that  corporations  are  "per- 
sons" within  the  meaning  of  that  clause. 

Santa  Clara  Co.  v.  So.  Pac.  R.  R.  Co.,  118  U.  S., 

394. 

Smith  v.  Ames,  169  U.  S.,  466. 

The  5th  Amendment  to  the  Constitution  provides, 
among  other  things : 


362 

"Nor  shall  any  person  *  *  be  deprived  of 
life,  liberty  or  property,  without  due  process  of 
law,"  etc. 

The  14th  Amendment  is  a  limitation  on  the  power 
of  the  States,  but  is  not  a  limitation  on  the  power  of 
Congress. 

On  the  other  hand,  the  5th  Amendment,  like  the 
other  of  the  first  ten  amendments,  does  not  apply  to 
the  States,  but  affects  only  the  United  States  collect- 
ively. 

Barron  v.  Baltimore,  7  Pet.,  243. 
Withers  v.  Buckley,  20  How.,  84. 
Tuntchell  v.  Commonwealth,  7  Wall.,  321. 
The  question  of  whether  or  not  a  corporation  is  a 
"person"  within  the  meaning  of  the  5th  Amendment 
which  limits  the  powers  of  Congress,  has  not,  so  far 
as  I  can  find,  been  passed  upon  by  the  courts.  As  I 
have  stated,  the  courts  have  held  that  corporations 
are  "persons"  within  the  meaning  of  the  14th  Amend- 
ment, which  is  a  limitation  only  on  the  powers  of 
the  States.  The  wording  of  both  amendments  is  sub- 
stantially the  same.  I  am  of  the  opinion  that  a  cor- 
poration would  probably  be  protected  by  the  5th 
Amendment  and  that  the  courts  would  probably  hold 
that  Congress  has  no  power  to  deprive  it  of  its  prop- 
erty without  "due  process  of  law." 

Again  Congress  is  bound  to  the  reasonable  exercise 
of  its  powers,  though  under  this  power  (to  regulate 
commerce)  a  total  embargo  laid  on  foreign  commerce 
was  upheld  in  Gibbons  v.  Ogden,  9  Wheat.,  191.  A 
somewhat  different  rule  applies  to  interstate  com- 
merce. Such  commerce  is  of  an  essentially  different 
nature  from  foreign  commerce,  and  over  interstate 
commerce  Congress  has  no  such  latitude. 

"The  right  to  engage  in  such  commerce  is  one 
of  the  rights  reserved  to  the  people,  and  one  of 
the  privileges  and  immunities  of  citizenship.  Con- 
gress can  not  lay  an  embargo  upon  interstate 
commerce.  *  *  *  The  purpose  with  which  the 
grant  was  made — to  secure  freedom  of  transpor- 
tation throughout  the  country  unembarrassed  by 


363 

differing  regulations  at  State  lines — measured  not 
only  the  power  of  the  States  but  also  the  power 
of  Congress.  (Prentice  &  Egan,  Commerce  Clause, 
p.  305.)" 

In  Groves  v.  Slaughter,  15  Pet.,  449,  506,  the  Su- 
preme Court  said: 

* '  The  law  must  be  equal  and  general  in  its  pro- 
visions.   Congress  cannot  pass  a  non-intercourse 
law  as  among  the  several  States;  nor  impose  an 
embargo  that  shall  affect  only  a  part  of  them. ' ' 
The  bill,  should  it  become  law,  may  be  challenged 
in  the  courts  as  to  Section  4.    That  section  is,  in  my 
opinion,  objectionable  in  that  it  precludes  any  defense 
under  any  possible  kind  of  circumstances. 

Federal  legislation  must  find  its  warrant  in  the  rea- 
sonable exercise  of  the  express  or  implied  powers  con- 
ferred on  the  general  Government  by  the  States,  in 
the  Constitution. 

In  Monongahela  Nav.  Co.  v.  United  States,  148  U.  S., 
312,  324,  the  Supreme  Court  said : 

"In  the  case  of  Sinnickson  v.  Johnson,  17  N.  J. 
L.  (2  Harr.),  129,  145,  cited  in  the  case  of  Pum- 
pelly  v.  Green  Bay  Co.,  13  Wall.,  166,  178,  it  was 
said  that  'this  power  to  take  private  property 
reaches  back  of  all  constitutional  provisions ;  and 
it  seems  to  have  been  considered  a  settled  principle 
of  universal  law  that  the  right  to  compensation  is 
an  incident  to  the  exercise  of  that  power ;  that  the 
one  is  so  inseparably  connected  with  the  other 
that  they  may  be  said  to  exist  not  as  separate 
and  distinct  principles,  but  as  parts  of  one  and 
the  same  principle. '  And  in  Gardner  v.  Newburgh, 
2  Johns.,  ch.  162,  Chancellor  Kent  affirms  sub- 
stantially the  same  doctrine.  And  in  this  there  is 
a  natural  equity  which  commends  it  to  every  one. 
It  in  no  wise  detracts  from  the  power  of  the  public 
to  take  whatever  may  be  necessary  for  its  uses; 
while  on  the  other  hand  it  prevents  the  public  from 
loading  upon  one  individual  more  than  his  just 
share  of  the  burdens  of  government,  and  says  that 
when  he  surrenders  to  the  public  something  more 


and  different  from  that  which  is  exacted  from 
other  members  of  the  public,  a  full  and  just  equiva- 
lent shall  be  returned  to  him. 

But  we  need  not  have  recourse  to  this  natural 
equity,  nor  is  it  necessary  to  look  through  the 
Constitution  to  the  affirmations  lying  behind  it  in 
the  Declaration  of  Independence,  for  in  this  fifth 
amendment  there  is  stated  the  exact  limitation  on 
the  power  of  the  Government  to  take  private  prop- 
erty for  public  uses." 

The  courts  have  never  passed  on  the  identical  prin- 
ciple involved,  but  I  incline  to  the  opinion  that  Section 
4  of  this  proposed  act  cannot  be  justified  as  a  reasona- 
ble exercise  of  the  power  "to  regulate  interstate  com- 
merce" and  that  Congress  lacks  the  power  to  deprive 
the  carrier  absolutely  and  unconditionally  of  any  de- 
fense. Such  a  deprivation  is  contrary  to  natural  equity. 
In  our  acceptance  of  the  legal  theory  that  corporations 
have  relative  rights  only,  and  share  not  at  all  in  the 
absolute  rights  of  natural  persons,  we  must  not,  in  the 
fiction  of  artificial  personality,  entirely  lose  sight  of 
the  fact  that  they  are  made  up  of  natural  persons  whose 
rights  are  the  real  rights  in  question. 

The  Supreme  Court  has  said  in  Ry.  Co.  v.  Ellis,  165 
U.  S.,  150,  154,  in  speaking  of  corporations  as  "per- 
sons" under  the  14th  Amendment: 

"The  rights  and  securities  guaranteed  to  per- 
sons by  that  instrument  cannot  be  disregarded  in 
respect  to  these  artificial  entities  called  corpora- 
tions any  more  than  they  can  be  in  respect  to  the 
individuals  who  are  the  equitable  owners  of  the 
property  belonging  to  such  corporations.  A  State 
has  no  more  power  to  deny  to  corporations  the 
equal  protection  of  the  law  than  it  has  to  individual 
citizens. ' ' 

I  express  no  opinion  on  the  economical  or  policy 
view  of  the  proposed  legislation.  Whether  a  fine  of 
$10  per  car  per  day  and  a  period  of  five  days  allowed 
the  railroad,  are  sufficiently  stringent  is  a  question  I 
do  not  feel  called  upon  to  review. 


365 


WHETHER  THE  CHICAGO  TELEPHONE  COMPANY  CAN  BE  COM- 
PELLED  TO   ITEMIZE   ITS   BILL   FOR   MEASURED    SERVICE. 

(E.  J.  Cady  &  Co.,  March  19, 1904.) 
"I  would  like  to  get  reliable  information  if  pos- 
sible on  the  following  points : 

We  have  in  our  office  a  switchboard,  and  besides 
paying  the  telephone  company  an  agreed  on  figure 
for  the  use  of  the  trunk  lines,  of  which  we  have 
two,  we  also  pay  them  3  cents  for  each  message 
going  out  from  our  office.  We  have  considerable 
trouble  with  the  telephone  company  in  the  matter 
of  their  charges.  Their  bills  come  to  us  for  'so 
many'  calls  during  the  previous  month,  but  we 
have  no  means  of  knowing  whether  they  are  charg- 
ing us  for  the  connections  we  ask  for  and  get,  or 
whether  they  have  us  charged  with  the  services 
they  render  to  us  and  other  people  also.  As,  for 
instance,  we  don't  think  that  there  is  ever  a  day 
in  the  course  of  business  but  what  we  get  from  ten 
to  a  dozen  wrong  connections,  and  from  the  size 
of  the  bills  we  get  from  the  telephone  company  it 
appears  to  us  that  we  are  charged  with  not  only  all 
the  actual  service  we  get,  but  also  all  their  mis- 
takes and  part  of  the  service  bill  that  should  be 
rendered  somebody  else. 

We  have  requested  them  several  times  to  send 
us  an  itemized  bill  showing  the  customer's  number 
that  they  are  charging  us  with,  for  certainly  if 
they  can  do  that  on  the  long  distance  service  they 
render  us  they  can  do  it  on  the  local  city  service 
they  render  us.  It  does  seem  as  though  we  are 
within  the  limits  of  our  rights  in  demanding  that 
they  furnish  us  an  itemized  bill.  There  is  noth- 
ing unjust  in  it  and  their  claim  that  it  is  burden- 
some certainly  does  not  apply  to  that  service  any 
more  than  it  does  to  any  of  the  other  clerical  work 
that  they  have  to  perform,  for  which  the  Lord 
knows  they  are  well  enough  paid.  I  would  be 
glad  to  hear  from  you  at  an  early  date  as  to 


366 

whether  this  is  a  subject  that  has  ever  come  up 
before  your  body  before,  and  what  the  actual  status 
of  the  matter  is,  whether  we  are  right  or  wrong 
in  our  position."  . 

There  is  no  way  of  compelling  the  Telephone  Com- 
pany to  itemize  its  bills.  The  only  course  E.  J.  Cady 
&  Co.  can  pursue  is  to  keep  a  record  of  the  number  of 
calls  for  which  they  are  obligated  to  pay  tolls.  If  the 
telephone  company  then  renders  an  incorrect  state- 
ment, the  company  can  refuse  to  pay,  tendering  the 
correct  amount  and  asking  for  an  itemized  statement. 
If  the  telephone  company  institutes  suit,  an  itemized 
statement  can  then  be  demanded.  If  an  attempt  is 
made  to  discontinue  the  telephone  service,  resort  may 
be  had  to  injunction  to  restrain  the  telephone  company 
from  discontinuing  the  service. 


AS  TO  THE  PLACE  WHERE  A  CARRIER  MUST  MAKE  DELIVERY 
TO   THE  CONSIGNEE. 

(Block-Pollak  Iron  Company,  March  19,  1904.) 

"If  possible,  we  would  like  to  get  the  opinion 
of  your  general  counsel  on  the  question  of  delivery 
of  merchandise  shipped  in  carload  lots  to  the  city 
of  Chicago,  where  the  f.  o.  b.  point  designated  in 
the  contract  merely  states  Chicago.  Does  this 
designation  leave  the  point  as  to  what  place  in 
Chicago  the  material  is  to  be  delivered,  to  be  de- 
cided by  the  shippers  or  the  consignees? 

As  an  instance  of  what  we  wish  the  opinion  on, 
we  would  state  that  if  material  is  purchased  to  be 
shipped  by  a  railroad  company  that  encircles  the 
city,  would  the  delivery  in  any  point  on  that  line 
inside  the  city  limits  complete  the  contract  as  to 
the  delivery,  or  could  the  consignees  demand  de- 
livery at  a  stipulated  point  on  that  road?  An 
opinion  on  this  would  be  greatly  appreciated  by 
us  as  well  as  others  who  have  had  this  question 
come  up  before  them." 
The  question  must  be  determined  not  by  the  con- 


367 

tract  between  the  consignor  and  the  consignee  but  by 
reference  to  the  contract  between  the  carrier  and  the 
shipper,  and  the  usage  and  customs  of  the  place  where 
the  delivery  is  made  which  enter  into  and  form  part 
of  the  contract. 

If  the  carrier  makes  an  express  contract  to  deliver 
to  the  consignee  personally  or  to  a  particular  ware- 
house or  factory  it  is  bound  by  such  a  contract  and 
must  make  the  delivery  in  accordance  with  the  con- 
tract. 

Cahn  v.  M.  C.  R.  R.  Co.,  71  111.,  96. 

At  common  law  it  was  the  duty  of  a  carrier  to  make 
a  personal  delivery  to  the  consignee,  but  this  rule  has 
been  relaxed  in  regard  to  railways  from  necessity. 
The  liability  of  a  carrier  is  in  most  cases  discharged 
by  a  delivery  at  the  warehouse,  depot  or  team  track 
provided  by  the  carrier  for  the  storage  of  the  goods. 

This  rule  is  based  upon  the  ground  that  a  railway 
has  no  means  of  delivery  beyond  its  own  lines.  If  the 
carrier  is  able  to  make  a  delivery  to  the  consignee  by 
means  of  a  spur  or  switch-track,  the  necessity  of  the 
relaxation  of  the  rule  requiring  personal  delivery  no 
longer  exists  and  in  my  opinion  the  carrier  is  bound 
to  make  a  personal  delivery. 

Vincent  v.  C.  &  A.  Ed.  Co.,  49  111.,  33. 
5  Ency.  of  Law  (2nd  Ed.),  p.  216. 
Coe  v.  R.  R.  Co.,  3  Fed.  Rep.,  775. 

The  carrier  can  not,  however,  be  compelled  to  deliver 
freight  beyond  its  own  termini.  The  place  of  business 
of  the  consignee  must  be  upon  the  line  of  the  railroad 
company. 

Where  a  side-track  is  erected  and  owned  by  the  com- 
pany or  consignee  it  is  considered  part  of  the  line  of 
the  railroad  and  the  company  is  obligated  to  make  a 
personal  delivery  to  the  consignee.  But  where  the 
railroad  company  can  only  use  the  side-track  by  per- 
mission of  one  other  than  the  consignee,  it  need  not 
make  a  personal  delivery,  as  such  side-track  is  not  a 
part  of  its  line.  To  constitute  the  side-track  part  of 
the  line,  the  railroad  company  must  have  the  right  to 
use  it,  and  it  can  not  be  compelled  to  obtain  the  right, 


368 

nor  is  it  material  that  the  railroad  company  has  deliv- 
ered freight  over  such  side-track  by  virtue  of  special 
a  2*r  eements 

People  v.  C.  &  A.  Rd.  Co.,  55  111.,  95. 

Vincent  v.  C.  &  A.  Rd.  Co.,  49  111.,  33. 

Railway  Co.  v.  People,  56  111.,  365. 

Hoyt  v.  C.,  B.  &  Q.  Rd.  Co.,  93  111.,  601. 

C.  &  A.  Rd.  Co.  v.  Suffern,  129  111.,  274. 

R.  R.  Co.  v.  Elevator  Co.,  153  111.,  70. 
The  liability  of  the  carrier  to  make  a  personal  de- 
livery may  also  be  established  by  usage  or  custom. 
Where  the  goods  are  of  such  a  nature  that  the  carrier 
is  not  required,  in  the  usual  course  of  business,  to 
remove  the  freight  from  the  car,  as  in  the  case  of  grain 
in  bulk,  coal,  lumber  and  the  like,  the  carrier  discharges 
his  duty  by  delivering  the  car  in  a  safe  and  convenient 
position  for  unloading  at  the  elevator,  warehouse  or 
other  place  designated  in  the  contract  or  required  in 
the  usual  course  of  business,  or,  if  no  place  is  thus 
designated  or  required,  on  its  side-track  or  team-track, 
in  the  usual  and  customary  place  for  unloading  by  con- 
signees. 

Gregg  v.  Illinois  Cen.  R.  R.,  147  111.,  550. 

Schumacher  v.  C.  &  N.  W.  R.  R.  Co.,  207  111., 

199. 

If,  therefore,  it  has  been  the  well  established  and 
generally  well  known  custom  and  the  usual  course  of 
business  for  the  carrier  to  make  a  personal  delivery 
to  the  consignee  where  such  consignee  can  be  reached 
over  the  line  of  the  railroad,  such  custom  forms  a  part 
of  the  contract  of  carriage,  and  the  railroad  company 
is  obligated  to  make  a  personal  delivery.  But  to  have 
that  effect  the  custom  must  be  so  uniformly  acquiesced 
in  by  length  of  time  that  it  must  be  considered  to  have 
entered  the  minds  of  the  parties,  and  constituted  a 
part  of  the  contract. 

Cahn  v.  M.  C.  R.  R.  Co.,  71  111.,  96. 
It  is  the  duty  of  a  carrier  to  serve  all  its  patrons  who 
are  similarly  situated,  alike  and  without  unjust  dis- 
crimination.   If,  then,  it  makes  a  personal  delivery  to 


369 

one  consignee  and  denies  it  to  another  similarly  situ- 
ated, it  is  guilty  of  unjust  discrimination. 

The  carrier  does  not,  therefore,  discharge  its  duty 
by  a  delivery  on  any  part  of  its  line.  It  must  make  a 
personal  delivery  where  it  is  practicable,  otherwise  it 
must  deliver  in  the  usual  and  customary  place. 

What  constitutes  a  delivery  in  each  case  depends 
upon  the  contract  of  carriage,  the  custom  and  usages 
of  the  place,  and  the  location  of  the  consignee.  I  have 
outlined  above  the  principles  of  law  governing  the 
case. 

THE  LIABILITY  OF  A  COMMON  CARRIER  AS  AN  INSURER  AND 
WHEN  SUCH  LIABILITY  CEASES  UNDER  THE  LAW  OF  ILLI- 
NOIS, ALSO  WHETHER  A  CARRIER  BY  WATER  MUST  GIVE 
NOTICE  OF  THE  ARRIVAL  OF  GOODS. 

(Reid,  Murdoch  &  Co.,  March  21,  1904.) 
''Will  you  please  ascertain  for  us  from  the  at- 
torney of  your  association  at  what  point  the  lia- 
bility of  a  railroad  or  lake  transportation  company 
ceases  and  that  of  the  consignee  begins  for  fire? 
In  other  words,  when  we  receive  notice  from  the 
carrier  of  arrival  of  goods,  is  it  necessary  for  us 
to  cover  the  same  with  insurance  in  order  to  have 
protection,  or  can  we  look  to  the  carrier  for  indem- 
nity in  case  the  goods  burn  ?  For  how  long  a  time 
are  the  carriers  liable  after  arrival  of  goods  in 
Chicago!  In  case  we  order  goods  switched  to 
some  warehouse  or  track,  when  does  our  liability 
commence1? 

We  should  be  pleased  to  have  the  information 
as  fully  as  possible,  both  in  cases  where  goods  are 
consigned  to  shipper's  order,  and  when  consigned 
direct  to  us.  Also  when  freight  is  prepaid,  as  well 
as  when  freight  is  to  be  paid  by  consignee,  if  these 
conditions  affect  the  liability." 

A  common  carrier  is  an  insurer  of  the  goods  and 
is  liable  for  the  loss  of  such  goods  in  all  cases  except 
where  the  loss  is  occasioned  by  the  act  of  God  or  the 
public  enemy.  A  loss  by  fire  is  not  an  act  of  God. 


370 

Under  the  law  of  Illinois  the  liability  as  a  common 
carrier  ceases  after  the  goods  have  been  unloaded  from 
the  car  at  the  place  of  destination  and  have  been 
placed  in  a  safe  and  secure  warehouse ;  after  the  goods 
have  been  thus  placed  in  a  warehouse,  the  liability 
thereafter  is  that  of  a  warehouseman.  A  warehouse- 
man is  bound  only  to  use  reasonable  care  and  dili- 
gence for  the  preservation  of  the  property,  and  is 
not  an  insurer  thereof  against  loss  by  fire,  if  reason- 
able care  and  diligence  has  been  used  in  the  selection 
and  care  of  the  warehouse.  There  is  no  fixed  time 
during  which  the  carrier  remains  liable  as  an  insurer 
after  the  arrival  of  the  goods.  His  liability  as  an 
insurer  continues  until  the  goods  have  been  delivered 
to  the  consignee  or  have  been  put,  as  aforesaid,  by  the 
carrier  into  a  warehouse. 

Gregg  v.  I.  C.  R.  R.  Co.,  147  111.,  550. 
Richards  v.  R.  R.  Co.,  20  111.,  405. 
R.  R.  Co.  v.  Scott,  42  111.,  132. 
Transportation  Co.  v.  Hallock,  64  111.,  284. 
Cahn  v.  R.  R.  Co .,  71  111.,  96. 

In  case  the  cars  are  switched  to  the  warehouse  or 
track  of  the  consignee,  the  liability  as  carrier  continues 
until  the  delivery  of  the  car  to  such  warehouse  or  upon 
the  track  of  the  consignee. 

Whether  or  not  the  goods  are  consigned  to  the  order 
of  the  consignee  or  the  consignor,  or  whether  the 
freight  is  prepaid  or  otherwise,  does  not  affect  the 
liability. 

As  I  stated  in  my  opinion  rendered  the  Association 
December  30,  1902,  a  common  carrier  is  under  no  ex- 
press obligation  to  give  notice  of  the  arrival  of  freight. 
It  is  the  duty  of  the  consignee  to  receive  the  goods  on 
their  arrival  at  the  destination.  The  rule  as  to  notice 
may  be  changed  by  a  well  established  custom  on  the 
part  of  the  carrier  to  give  such  notice,  and  where  such 
custom  exists,  notice  must  be  given.  The  liability  of 
the  carrier  ceases  and  that  of  the  warehouseman  begins 
upon  the  unloading  of  the  goods  and  placing  the  same 
in  a  warehouse  as  aforesaid,  whether  notice  has  or  has 
not  been  given  to  the  consignee. 


371 

Richards  v.  R.  R.  Co.,  20  111.,  404. 

Hutcliinson  on  Carriers,  Sees.  367,  370. 
The  rule  as  to  the  necessity  of  giving  notice  does 
not  apply  to  a  carrier  by  water.  A  carrier  by  water 
is  under  obligation  to  give  notice  of  the  arrival  of  the 
goods  and  its  liability  as  a  carrier  continues  until  the 
giving  of  such  notice,  and  the  expiration  of  a  reason- 
able time  to  take  away  the  goods.  What  is  a  rea- 
sonable time  depends  upon  the  circumstances  of  each 
case.  The  necessity  of  a  carrier  by  water  giving  no- 
tice may  be  waived  by  contract,  by  the  course  of  deal- 
ings between  the  parties,  or  by  the  custom  of  the  port. 

Hutchinson  on  Carriers,  Sees.  359,  et  seq. 

I.  C.  R.  R.  Co.  v.  Carter,  62  111.  App.,  618. 

Crawford  v.  Clark,  15  111.,  561. 

NOTE: — See  opinion  of  Nov.  26,  1907,  for  Emerson  Mfg.  Co.  as  to 
when  the  liability  of  a  carrier  ceases  upon  the  arrival  of  goods  at  desti- 
nation under  the  laws  of  all  the  state. — Ed. 

AS  TO  THE  EFFECT  OF  SENDING  A  CHECK  IN  FULL  SETTLE- 
MENT OF  AN  ACCOUNT  WHERE  THE  AMOUNT  OF  THE 
CHECK  IS  LESS  THAN  THE  AMOUNT  DUE. 

(Squire  Dingee  Company,  March  31,  1904.) 

' '  If  consistent,  will  you  kindly  secure  an  opinion 
on  this  matter,  which  we  hope  will  be  of  interest 
to  some  of  the  other  members  of  the  Association, 
as  well  as  ourselves. 

When  a  firm  tenders  or  mails  a  check,  or  cur- 
rency in  settlement  of  a  bill  or  an  account,  and  the 
check  or  currency  is  not  for  the  full  amount  of  the 
account,  is  it  necessary  to  decline  to  accept,  or  to 
return  this  tender,  in  order  to  collect  or  force  pay- 
ment of  the  balance  of  the  account  ? 

We  do  not  refer  to  payment  for  certain  items  on 
the  account  which  are  made  in  full,  or  for  pay- 
ments made  with  the  understanding  that  it  is  only 
part  payment  of  the  whole,  but  with  the  balance  to 
be  paid  for  and  adjusted  later,  but  for  payments 
when  tendered  as  in  full  of.  account,  or  when  de- 
ductions are  made  arbitrarily,  or  otherwise,  or 


372 

made  in  error,  for  instance,  for  excess  freight, 
discount  after  the  time  limit,  breakage,  etc.,  or 
the  deduction  of  an  amount  which  has  been  in 
dispute,  but  not  yet  adjusted. 

Does  it  make  any  difference  if  the  check  or  re- 
mittance sheet  is  marked  'in  full  of  account,'  or 
whether  the  tender  threatens  to  make  further  de- 
ductions or  refuses  to  pay  at  all  if  same  is  not 
accepted,  or  recipient  by  declining  to  accept  the 
tender  will  get  any  of  the  account  without  long 
delay  or  legal  proceedings,  or  when  it  is  neces- 
sary, in  turn,  to  secure  the  money  involved  to  pay 
in  whole  or  part,  for  the  manufacture  or  purchase 
of  the  goods  furnished." 

The  payment  of  a  part  of  a  fixed  and  certain  de- 
mand which  is  due  and  not  in  dispute,  is  not  a  satis- 
faction of  the  whole  debt,  even  where  the  creditor 
agrees  to  receive  a  part  for  the  whole,  and  gives  a  re- 
ceipt for  the  whole  demand. 

Ostrander  v.  Scott,  161  111.,  339,  and  cases 

cited. 

This  doctrine  rests  upon  the  ground  that  the  agree- 
ment for  the  discharge  of  the  entire  debt  is  without 
consideration  and,  therefore,  not  binding. 

But  the  rule  has  no  application  to  the  honest  settle- 
ment of  unliquidated  and  disputed  demands.  If  there 
is  a  bona  fide  dispute  and  a  tender  is  made  by  the 
debtor  with  the  condition  that  the  amount  of  the  ten- 
der is  to  be  accepted  in  full  satisfaction  of  the  entire 
claim,  the  tender  must  be  accepted  or  rejected  in  toto. 
The  creditor  can  not  accept  the  tender  and  apply  it 
on  account  and  charge  the  debtor  with  the  difference. 
He  must  accept  it  in  full  settlement  or  return  the  re- 
mittance. An  acceptance  of  a  check  sent  in  full  settle- 
ment where  there  is  a  bona  fide  dispute,  is  an  accept- 
ance of  the  conditions  under  which  the  check  was  sent ; 
the  tender  and  the  condition  attached  to  it  cannot  be 
dissevered.  Under  such  circumstances  the  assent  of 
the  creditor  to  the  terms  proposed  by  the  debtor  will 
be  implied,  and  no  words  of  protest  can  effect  the  con- 
clusiveness  of  the  settlement. 


373 

Ostrander  v.  Scott,  161  111.,  339. 

Lapp  v.  Smith,  183  111.,  179. 

Bingham  v.  Browning,  197  111.,  122. 
If  a  check  is  received,  therefore,  in  settlement  of  a 
bill  it  may  be  retained  and  applied  on  account  only 
where  there  is  not  a  bona  fide  dispute  as  to  the  amount 
due,  and  such  amount  is  unliquidated. 

In  remitting  it  is  not  indispensable  that  it  be  stated 
that  the  remittance  is  in  "full  of  account."  There 
must,  however,  be  a  sufficient  notification  to  the  cred- 
itor that  the  debtor  intends  the  remittance  to  be  so 
received. 

THE  PEOPOSED  IOWA  PUKE  FOOD  LAW,  KELATIVE  TO  THE 
ADULTERATION,  MISBRANDING  AND  IMITATION  OF  GOODS, 
IS  INVALID  TO  THE  EXTENT  THAT  IT  AFFECTS  GOODS  IM- 
PORTED FROM  OTHER  STATES. 

(Anonymous.    March  31,  1904.) 
"There  has  come  to  our  attention  a  bill  in  the 
Iowa  legislature,  having  for  its  object  the  regula- 
tion of  the  sale  of  food  products,  a  copy  of  which 
we  send  herewith. 

While  we  are  in  favor  of  any  and  all  legislation 
which  will  prevent  improper  adulteration  of  food 
products,  we  fear  if  the  above  mentioned  bill  is 
enacted  into  a  law,  it  may  put  unnecessary  bur- 
dens on  reputable  manufacturers  and  distributors 
of  food  products,  and  therefore  would  like  the 
opinion  of  the  General  Counsel  of  the  Association 
as  to  whether  the  proposed  law,  if  enacted,  would 
be  binding  in  all  particulars. 

We  would  direct  attention  particularly  to  that 
portion  of  section  eight,  which  provides  in  sub- 
stance, that  if  a  local  (Iowa)  dealer  hold  a  guar- 
anty of  purity  from  a  manufacturer,  etc.,  resid- 
ing in  Iowa,  it  exempts  such  dealer  from  the  effect 
of  the  law;  a  guaranty  from  a  manufacturer  re- 
siding outside  of  Iowa  not  giving  him  the  same 
immunity, ' ' 
The  proposed  law  is  entitled : 


374 

11  An  Act  to  prevent  the  adulteration,  misbrand- 
ing  and  imitation  of  goods ;  to  change  the  name  of 
the  office  of  'State  Dairy  Commissioner'  to  that 
of  'State  Food  and  Dairy  Commissioner,'  and  to 
define  his  duties." 

The  first  five  sections  of  the  law  relating  to  the 
duties  of  the  commissioner,  chemist,  etc.,  are  not  ma- 
terial here. 

Section  6  provides : 

"That  no  person  by  himself,  his  servant  or 
agent,  or  as  the  servant  or  agent,  of  any  other 
person  shall  manufacture  or  introduce  into  the 
State,  or  solicit  or  take  orders  for  delivery  or 
sell,  exchange,  deliver  or  have  in  his  possession 
with  the  intent  to  sell,  exchange  or  expose  or  offer 
for  sale  or  exchange,  any  article  of  food  which 
is  adulterated  or  misbranded,  within  the  meaning 
of  this  act." 

The  act  further  provides  (Section  7)  that  the  terni 

misbranded"  shall  apply  to: 

* '  All  articles  of  food,  or  articles  which  enter  into 
the  composition  of  food,  the  package  or  label  of 
which  shall  bear  any  statement  regarding  the  in- 
gredients or  substance  contained  in  such  article, 
which  statement  shall  be  false  or  misleading  in 
any  particular,  and  to  any  food  or  product  which 
is  falsely  branded  as  to  the  State  or  county  in 
which  it  is  manufactured  or  produced,  or  shall 
bear  any  false  statement  regarding  the  weight  or 
quantity  contained  in  the  package." 

Section  8  defines  "adulteration."  Clause  2,  Subdi- 
vision 8,  of  Section  8,  provides: 

"That  no  dealer  shall  be  convicted  under  the 
provisions  of  this  act  when  he  is  able  to  prove 
a  written  guaranty  of  purity  in  a  form  approved 
by  the  commissioner  as  published  in  his  rules  and 
regulations,  signed  by  the  wholesaler,  salesman, 
jobber,  manufacturer  or  other  person  from  whom 
he  purchased  such  articles;  provided,  also,  that 
said  guarantor  or  guarantors  reside  in  this  State. 
Said  guaranty  shall  contain  the  full  name  and  ad- 


<  i 


375 

dress  of  the  party  or  parties  making  the  sale  to 
the  dealer,  and  said  party  or  parties  shall  be  amen- 
able to  the  prosecutions,  fines  and  other  penalties, 
which  would  attach  but  for  said  guaranty,  to  the 
retailer  under  the  provisions  of  this  act." 
The  remaining  sections  of  the  act  relate  to  proced- 
ure, penalties,  etc. 

It  is  within  the  power  of  a  State,  in  the  interest  of 
the  public  health,  to  require  an  article  to  be  sold  for 
what  it  really  is,  and  to  protect  the  public  from  impo- 
sition in  buying  one  article  of  food  in  the  belief  that 
it  is  another.  It  is  upon  this  foundation  that  laws 
prohibiting  adulteration  and  misbranding  rest  for 
their  validity.  It  is,  however,  beyond  the  power  of  the 
State  to  prohibit  the  introduction  and  sale,  in  original 
packages,  of  a  pure  article,  sold  upon  its  merits.  The 
present  statute  does  not  undertake  to  prohibit  the 
sale  of  a  pure  article  of  food,  but  it  is  directed  solely 
against  adulteration  and  deceit,  for  the  purpose  of  pre- 
venting frauds  upon  the  public.  In  its  general  scope, 
therefore,  it  is  a  valid  enactment. 

Plumley  v.  Mass.,  155  U.  S.,  461. 
Arbuckle  v.  Blackburn,  113  Fed.,  616. 
Such    statutes,    however,    must    not    discriminate 
against  the  products  of  other  States.    The  Commerce 
Clause  of  the  Constitution  protects  property  imported 
from  other  States   against  discrimination  by  reason 
of  its  foreign  origin,  even  after  it  has  become  incor- 
porated in  the  general  mass  of  property  in  the  State. 
In  Walling  v.  Michigan,  116  IT.  S.,  446,  a  statute  of 
Michigan  imposed  a  tax  upon  persons  who,  not  having 
their  principal  place  of  business  in  the  State,  engaged 
in  the  business  of  selling  intoxicating  liquors.     The 
court  said: 

"It  certainly  does  impose  a  tax  or  duty  on  per- 
sons who,  not  having  their  principal  place  of  busi- 
ness within  the  State,  engage  in  the  business  of 
selling,  or  of  soliciting  the  sale  of,  certain  de- 
scribed liquors,  to  be  shipped  into  the  State.  If 
this  is  not  a  discriminating  tax  leveled  against 
persons  for  selling  goods  brought  into  the  State 


376 

from  other  States  or  countries,  it  is  difficult  to 
conceive  of  a  tax  that  would  be  discriminating.    It 
is  clearly  within  the  decision  of  Welton  v.  Mis- 
souri, 91  U.  S.,  275,  where  we  held  a  law  of  the 
State  of  Missouri  to  be  void  which  laid  a  peddler's 
license   tax   upon   persons   going   from   place   to 
place  to  sell  patent  and  other  medicines,  goods, 
wares,  or  merchandise,  not  the  growth,  product, 
or  manufacture  of  Missouri.     The  same  principle 
is  announced  in  Hinson  v.  Lott,  8  Wall,  148 ;  Ward 
v.  Maryland,  12  Wall.,  418;  Guy  v.  Baltimore,  100 
U.  S.,  434,  438 ;  County  of  Mobile  v.  Kimball,  102 
U.  S.,  691,  697 ;  Webber  v.  Virginia,  103  U.  S.,  344. 
A  discriminating  tax  imposed  by  a  State  operat- 
ing to  the  disadvantage  of  the  products  of  other 
states  when  introduced  into  the  first  mentioned 
State,  is,  in  effect,  a  regulation  in  restraint  of 
commerce  among  the   States,  and  as  such  is   a. 
usurpation  of  the  power  conferred  by  the  Consti- 
tution upon  the  Congress  of  the  United  States." 
In  Minnesota  v.  Barber,  136  U.  S.,  313,  a  statute  of 
Minnesota  provided  for  an  inspection  before  slaught- 
ering of  cattle,  etc.,  before  sales  of  fresh  beef,  etc., 
could  be  made  in  Minnesota. 
The  court  said: 

"As  the  inspection  must  take  place  within  the 
twenty-four  hours  immediately  before  slaughter- 
ing, the  act,  by  its  necessary  operation,  excludes 
from  the  Minnesota  market  practically  all  fresh 
beef,  veal,  mutton,  lamb  or  pork — in  whatever 
form,  and  although  entirely  sound,  healthy  and 
fit  for  human  food — taken  from  animals  slaugh- 
tered in  other  States;  and  directly  tends  to  re- 
strict the  slaughtering  of  animals,  whose  meat  is 
to  be  sold  in  Minnesota  for  human  food,  to  those 
engaged  in  such  business  in  that  State." 
And  again : 

"If  the  object  of  the  statute  had  been  to  deny 
altogether  to  the  citizens  of  other  States  the  privi- 
lege of  selling,  within  the  limits  of  Minnesota,  for 
human  food,  any  fresh  beef,  veal,  mutton,  lamb 


or  pork,  from  animals  slaughtered  outside  of  that 
State,  and  to  compel  the  people  of  Minnesota, 
wishing  to  buy  such  meats,  either  to  purchase 
those  taken  from  animals  inspected  and  slaught- 
ered in  the  State,  or  to  incur  the  cost  of  purchas- 
ing them,  when  desired  for  their  own  domestic 
use,  at  points  beyond  the  State,  that  object  is  at- 
tained by  the  act  in  question.  Our  duty  to  main- 
tain the  Constitution  will  not  permit  us  to  shut 
our  eyes  to  these  obvious  and  necessary  results 
of  the  Minnesota  statute.  If  this  legislation  does 
not  make  such  discrimination  against  the  products 
and  business  of  other  States  in  favor  of  the  prod- 
ucts and  business  of  Minnesota  as  interferes  with 
and  burdens  commerce  among  the  several  States, 
it  would  be  difficult  to  enact  legislation  that  would 
have  that  result." 

In  Brimmer  v.  Rebman,  138  U.  S.,  78,  a  statute  of 
Virginia  prohibited  the  sale  of  beef,  etc.,  from  animals 
slaughtered  one  hundred  miles  or  more  from  the  place 
of  sale,  unless  previously  inspected  by  local  inspec- 
tors. The  court  said : 

1 '  But  it  may  not,  under  the  guise  of  exerting  its 
police  powers,  or  of  enacting  inspection  laws,  make 
discriminations  against  the  products  and  indus- 
tries of  some  of  the  States  in  favor  of  the  products 
and  industries  of  its  own  or  other  States.  The 
owner  of  the  meats  here  in  question,  although  they 
were  from  animals  slaughtered  in  Illinois,  had 
the  right  under  the  Constitution,  to  compete  in 
the  markets  of  Virginia  upon  terms  of  equality 
with  the  owners  of  like  meats,  from  animals 
slaughtered  in  Virginia  or  elsewhere  within  one 
hundred  miles  from  the  place  of  sale.  Any  local 
regulation  which,  in  terms  or  by  its  necessary  op- 
eration, denies  this  equality,  in  the  markets  of  a 
State  is,  when  applied  to  the  people  and  products 
or  industries  of  other  States,  a  direct  burden  upon 
commerce  among  the  States,  and,  therefore,  void." 
In  VoigU  v.  Wright,  141  U.  S.,  62,  a  statute  of  Vir- 
ginia provided  that  all  flour  brought  into  the  State  and 


378 

offered  for  sale,  shall  have  the  Virginia  inspection 
marked  thereon.    The  court  said : 

' '  The  law  in  question  is  a  discriminating  law, 
and  requires  the  inspection  of  flour  brought  from 
other  States,  when  such  inspection  is  not  required 
for  flour  manufactured  in  Virginia." 
Does  Section  8,  above  quoted,  bring  the  present  law 
within  the  doctrine  of  these  cases?  The  law  exempts 
a  dealer  from  prosecution  if  he  is  able  to  prove  a 
written  guaranty  of  purity,  signed  by  a  wholesaler, 
salesman,  jobber,  manufacturer,  or  other  person  from 
whom  the  goods  are  purchased,  provided  the  guarantor 
resides  in  the  State.  The  retailer,  if  he  wishes  to  avoid 
the  penalties  of  the  law,  must  purchase  his  goods  in 
Iowa.  A  guaranty  of  a  non-resident  avails  him  nothing. 
If  the  law  in  question  directly  discriminated  against 
the  non-resident,  the  law  would  be  invalid.  The  pres- 
ent law  effects  the  same  result.  The  non-resident  is 
reached  through  the  medium  of  the  retailer  to  whom 
he  sells  his  goods.  The  law  discriminates  between 
those  retailers  who  purchase  the  products  of  the  State 
of  Iowa  and  those  who  purchase  the  products  of  other 
States. 

I  am  inclined  to  the  opinion,  therefore,  that  to  the 
extent  that  the  law  in  question  affects  goods  imported 
from  other  States,  it  is  not  a  valid  exercise  of  the  police 
power  of  the  State  and  is  unconstitutional  and  void. 


THE  SAME  RULES  OF  EVIDENCE  APPLY  TO  THE  ADMISSION 
OF  A  CAEBON  COPY  OF  A  LETTEE  AS  TO  A  LETTEE  PEESS 
COPY. 

(J.  T.  Eyerson  &  Son,  March  31, 1904.) 
"In  making  a  little  change  in  our  system,  we 
desire  to  do  away  with  the  use  of  the  ordinary 
letter  copy  book,  substituting  therefor  carbon 
copies  of  all  correspondence,  which  would  remain 
in  our  files  for  future  reference,  but  in  this  con- 
nection the  question  arises  that  in  case  we  should 
get  into  court  and  have  occasion  to  prove  cor- 


379 

respondence,  could  these  carbon  copies  be  used  in 
evidence  in  the  same  manner  and  with  the  same 
effect  as  the  letter  press  copy?    The  letter  press 
copy  would  reproduce  the  signature  as  well  as 
the  letter,  while  these  carbon  copies  in  practice 
are  not  signed.     If  that  point  is  material  these 
carbon  copies  might  be  signed  with  indelible  pen- 
cil at  the  same  time  the  original  letter  was  signed. 
Will  you  kindly  refer  this  to  your  attorney  for 
his  opinion  and  very  much  oblige. ' ' 
The  same  rules  of  evidence  apply  to  the  admission 
of  a  carbon  copy  of  a  letter  as  to  a  letter-press  copy. 
There  is  no  reason  why  they  are  not  admissible,  pro- 
vided the  necessary  connecting  proof  as  to  mailing, 
correctness,  etc.,  is  made.      The  proof  would  be  the 
same  as  in  the  case  of  a  letter-press  copy. 

CONSTITUTIONALITY   OF   TRUCK   LAW;    COURT   DECISIONS   AF- 
FIRMING  FORMER   OPINIONS   OF    MAY    28,    1903,   AND   MAY 

29,  1903. 

On  May  28,  1903,  I  rendered  to  the  Association  an 
opinion  as  to  the  effect  that  Sections  3  and  4  of  the 
Act  of  Illinois  of  May  28,  1901,  known  as  the  "Truck 
law,"  were  unconstitutional  and  void.  Those  sections 
provided  as  follows: 

"SECTION  3.  It  shall  be  unlawful  for  any  per- 
son, company,  corporation  or  association  employ- 
ing workmen  in  this  State  to  make  deduction  from 
the  wages  of  his,  its  or  their  workmen,  except 
for  lawful  money,  checks  or  drafts  actually  ad- 
vanced without  discount,  and  except  such  sums  as 
may  be  agreed  upon  between  employer  and  em- 
ployee, which  may  be  deducted  for  hospital  or  re- 
lief fund  for  sick  or  injured  employees. 

SEC.  4.  Any  deductions  made  from  the  wages  of 
any  workman  in  this  State,  except  as  provided  in 
section  three  (3)  of  this  act,  may  be  recovered  in 
any  appropriate  action  before  any  court  of  com- 
petent jurisdiction,  together  with  such  reasonable 
attorney's  fees  as  the  court  in  its  discretion  shall 


380 

think  proper,  and  no  offset  or  counterclaim  of  any 
kind  shall  be  allowed  in  such  action  or  proceed- 
ing." 

The  Supreme  Court  of  Illinois  on  February  17,  1904, 
in  Kellyville  Coal  Co.  v.  Harrier,  207  111.,  624,  has  de- 
clared these  sections  unconstitutional. 

It  may  also  interest  the  members  to  know  that  the 
Supreme  Court  of  Illinois  affirmed  the  decision  of  the 
Appellate  Court  in  the  case  of  Norwaysz  v.  Thuringia 
Insurance  Co.  (204  111.,  334),  as  anticipated  in  my 
opinion  of  May  29,  1903,  to  Selz,  Schwab  &  Co.  That 
case  decided  that  a  violation  of  the  terms  of  a  fire  in- 
surance policy  by  a  tenant  of  the  insured  keeping  ben- 
zine, etc.,  on  the  premises  without  the  knowledge  of 
the  landlord  is  a  violation  of  the  terms  of  the  policy 
by  the  insured  (landlord)  and  invalidates  the  policy. 

LIABILITY  OF  A  TRAVELING  SALESMAN  FOR  LOSS  OF  A  HORSE 
HIRED  FROM  A  LIVERY  STABLE. 

(Beggs  Manufacturing  Company,  March  31, 1904.) 

"We  wish  to  obtain  the  opinion  of  your  Mr. 
Mayer  on  the  liability  for  the  loss  of  a  horse  while 
in  possession  of  one  of  our  traveling  salesmen  in 
Arkansas.  The  facts  as  stated  by  him  are : 

'  That  he  hired  a  team  of  horses  from  a  livery  at 
$2.50  per  day  and  expenses  (which  meant  that  he) 
was  to  pay  for  the  keeping  of  the  horses  while  in 
his  possession)  and  used  them  from  Thursday  un- 
til the  following  Saturday  in  making  different 
points  off  the  line  of  railroad  and  soliciting  for  the 
sale  of  our  goods. 

He  states  that  Saturday  he  left  a  given  point  at 
7  o'clock  A.  M.  and  drove  10  miles,  when  he  fed 
the  horses  and  got  dinner  and  drove  to  another 
point  10  miles  from  there,  making  20  miles  in  all 
by  3  o'clock  P.  M.  That  the  horse  was  all  right 
after  having  been  fed,  but  aTter  having  driven  the 
last  ten  miles  (which  took  from  12:20  until  3 
o'clock)  he  took  sick  and  died  in  about  thirty 
minutes. ' 


381 

From  the  statement  made  by  the  salesman  it 
would  appear  that  the  horse  was  not  overdriven 
or  improperly  used  in  any  way,  but  the  livery 
man  has  made  claim  for  $75,  the  value  of  the 
animal. 

The  questions  which  we  wish  answered  are : 
1st:  .  Is  there  any  liability  on  the  part  of  our 
salesman  for  the  loss  of  the  horse  provided  he 
used  ordinary  care  in  driving  the  animal  and  in 
feeding,  watering,  etc.,  or  does  the  fact  that  the 
horse  died  while  in  his  possession  make  him  lia- 
ble to  the  owner  for  its  value,  regardless  of  the 
care  it  received  while  in  his  hands? 

2nd :  If  the  horse  was  overdriven,  or  improperly 
fed  or  watered  while  in  a  heated  condition,  would 
this  make  him  liable  for  its  value,  and  if  so,  upon 
whom  does  the  burden  of  proof  rest,  or  what  kind 
of  evidence  would  be  permitted  to  establish  this? 
In  other  words,  does  the  salesman  require  to  prove 
that  he  did  not  abuse  the  horse,  or  is  the  owner 
required  to  prove  that  he  did?" 
The  question  is  not  one  of  general  interest  to  the 
members.    The  transaction  constitutes  a  bailment  for 
the  mutual  benefit  of  both  parties.     The  bailee  (the 
hirer)  in  such  a  case  must  exercise  ordinary  care  in 
relation  to  the  property  hired.    If  the  bailee  (the  sales- 
man) used  ordinary  care,  there  is  no  liability.     If  he 
did  not  use  ordinary  care,  there  is  a  liability. 

3  Encycl.  of  Law  (2nd  Ed.),  p.  746. 
The  burden  of  proof  in  the  present  case  is  on  the 
bailee.  The  bailor  makes  out  a  prima  facie  case  by 
showing  that  the  bailee  failed  to  return  the  horse.  The 
bailee  must  then  explain  the  reason  for  this  failure 
and  show  that  he  used  ordinary  care.  If  he  does  so 
show,  that  should  end  the  matter.  The  question  of 
what  care  the  bailee  used  is  one  of  fact,  and  juries 
(particularly  in  horse  cases),  who  pass  on  the  facts, 
frequently  render  surprising  verdicts. 

3  Encycl.  of  Law  (2nd  Ed.),  750,  751,  and 
cases  cited. 


382 


STATUS  OF  THE  ANTI-TRUST  LAWS  OF  ILLINOIS  AND  THE 
LITIGATION  INVOLVING  THE  CONSTITUTIONALITY  OF  THE 
ILLINOIS  ANTI-TEUST  STATUTES. 

(Heath  &  Milligan  Mfg.  Co.,  April  1,  1904.) 

"It  may  be  time  to  bring  up  the  much  agitated 
question  of  the  Anti-Trust  Law  of  the  State  of  Illi- 
nois, or  at  least  the  portion  that  demands  an  affi- 
davit and  $1.00  from  every  corporation  doing 
business  in  the  State,  declaring  that  it  is  not  in 
any  way  connected  with  a  trust  or  combine. 

I  believe  the  present  status  is  that  a  test  case 
was  made  and  sent  to  the  courts.  The  Circuit 
Court  unanimously  decided  that  the  law  was  un- 
constitutional. It  finally  went  to  the  Illinois  Su- 
preme Court,  and  there  the  decision  of  the  Circuit 
Court  was  reversed;  the  law  was  declared  consti- 
tutional, but  in  the  meantime,  as  I  understand  it, 
the  decision  of  the  Supreme  Court  of  Illinois  ad- 
mits as  unconstitutional  the  provision  of  Section  1 
of  the  Statute,  passed  in  the  amendment  of  1897, 
but  that  portion  of  the  law  passed  in  1891  and 
amended  in  1893,  not  affected  by  the  unconstitu- 
tional clause,  are  still  in  effect. 

If  this  is  true,  to  use  the  words  of  the  law  in 
Section  1,  'any  corporation  organized  in  this  or 
any  other  State  or  country  for  transacting  or  con- 
ducting any  kind  of  business  in  this  State,  or  any 
partnership,  or  individual,  or  other  association  of 
persons  whatsoever,  shall  create,  enter  into,  or  be- 
come a  party  to  any  pool,  trust,  agreement,  com- 
bination, confederation  or  understanding'  (with 
anybody  else  whatsoever),  ;to  regulate  or  fix  the 
price  of  any  articles  of  merchandise  or  commodity 
*  *  *  to  fix  or  limit  the  amount  or  quantity 
of  any  article,'  etc.,  shall  be  deemed  guilty  of  con- 
spiracy to  defraud. 

With  the  provision  of  1897  eliminated,  the  coal, 
stock  and  agricultural  people  must  come  under  the 
law,  as  well  as  all  trade  unions. 


383 

Is  this  a  right  interpretation? 
Is  there  any  chance  of  the  case  being  carried 
to  the  United  States  Supreme  Court?     If  there 
is,  why  does  not  the  Association  have  it  done? 

If  there  is  no  chance  of  getting  it  into  the  Su- 
preme Court,  then  would  it  not  be  in  order  for  the 
Association  to  turn  their  attention  toward  getting 
the  repeal  of  this  obnoxious  law?" 
The  understanding  of  the  company  as  to  the  present 
status  of  the  litigation  is  correct.     The  amendatory 
act  of  1897  was  held  unconstitutional  in  People  v.  But- 
ler Street  Foundry  &  Iron  Co.,  201  111.,  236,  leaving  in 
force  the  original  act  of  1891,  as  amended  by  the  act 
of  1893,  which  added  two  new  sections,  known  as  Sec- 
tions 7a  and  7b. 

The  exception  as  to  agricultural  products  and  live 
stock  while  in  the  hands  of  the  producer  or  raiser  was 
contained  in  an  original  Trust  Act,  passed  in  1893,  at 
the  same  session  as  the  amendatory  Sections  7a  and 
7b,  above  referred  to.  This  law  was  declared  uncon- 
stitutional by  the  United  States  Supreme  Court  in 
Connolly  v.  Union  Sewer  Pipe  Co.,  184  U.  S.,  540. 

The  amendatory  act  of  1897,  therefore,  being  out  of 
the  way,  the  act  of  1891  applies  to  all  persons,  firms, 
and  corporations  who  attempt 

"To  regulate  or  fix  the  price  of  any  article  of 
merchandise  or  commodity." 
or  who 

"fix  or  limit  the  amount  or  quantity  of  any  article, 
commodity  or  merchandise,  to  be  manufactured, 
mined,  produced,  or  sold  in  this  State." 
Whether  labor  unions   are  included,   and  whether 
labor  can  be  considered  as  "an  article  of  merchandise 
or  commodity"  or  within  the  meaning  of  the  words 
"manufactured,  mined,  produced  or  sold"  is  a  ques- 
tion of  grave  doubt,  and  which  I  am  now  considering 
with  reference  to  another  inquiry. 

The  case  of  People  v.  Butler  Street  Foundry  &  Iron 
Co.  can  not,  in  its  present  condition,  be  carried  to  the 
United  States  Supreme  Court  because  there  was  no 
final  judgment  rendered  in  the  Supreme  Court  of  Illi- 


384 

nois.  The  court  sent  the  case  back  to  the  Circuit  Court 
for  re-trial.  On  the  present  status,  and  until  there 
has  been  a  final  adjudication  by  the  United  States  Su- 
preme Court,  I  have  advised  that  the  affidavit  be  filed 
where  the  facts  permit. 

NOTE: — See  also  People  v.  RicJiards  fy  Kelly  Mfg.  Co.,  1  111.,  C.  C., 
171.— Ed. 

SUFFICIENCY   OF  NOTICE   TO   EMPLOYER   OF  AN  ASSIGNMENT 
OF  WAGES  BY  AN  EMPLOYE. 

(Illinois  Malleable  Iron  Company,  April  8, 1904.) 

"Thank  you  for  the  copy  of  the  opinion  of  Mr. 
Mayer  in  regard  to  assignment  of  wages  not  being 
valid  as  against  an  employer  whose  employ  a  man 
enters  after  the  assignment  has  been  made  and 
without  a  previous  contract. 

Suppose  the  assignment  has  been  made  after  the 
man  has  entered  your  employ,  and  the  loan  man 
simply  sends  you  a  notice  that  he  holds  an  assign- 
ment, but  does  not  show  the  assignment  to  you— 
are  you  then  liable  if  you  pay  the  man  his  wages 
without  having  seen  the  assignment! 

The  men  generally  say  they  have  made  no  as- 
signment, and  it  sometimes  turns  out  they  are 
wrong. 

Again,  how  is  it  if  they  have  an  assignment  but 
refuse  to  take  the  trouble  to  send  it  to  you?  In 
the  case  we  now  have  on  hand  we  have  written 
by  registered  post  to  the  loan  company,  asking 
them  to  send  us  the  assignment  they  claim  to 
hold  from  the  man  in  question.  If  they  do  not 
send  it,  are  we  compelled  to  hold  back  the  man's 
wages,  even  supposing  they  have  a  valid  assign- 
ment; in  other  words,  do  we  have  to  accept  their 
mere  say-so  I  Or  do  we  have  to  go  to  their  office 
to  satisfy  ourselves  whether  they  have  an  assign- 
ment or  not  ? ' ' 

All  that  is  necessary  to  charge  the  employer,  is  for 
the  holder  of  an  assignment  of  wages  to  give  notice 
of  such  assignment  to  the  employer.  It  is  not  necessary 


385 

that  the  holder  show  the  assignment.  If,  therefore,  the 
employer  pays  the  assigned  wages  after  such  notice 
and  the  assignment  is  valid,  the  employer  will  be  held 
liable. 

The  holder  cannot  be  compelled  to  send  a  copy  of 
the  assignment  to  the  employer.  If  the  employer 
wishes  to  satisfy  himself,  as  to  the  genuineness  of  the 
assignment,  he  can  make  a  tender  of  the  amount  due, 
conditioned  upon  the  holder  furnishing  evidence  that 
he  is  entitled  to  receive  it.  This  will  constitute  a  valid 
tender  and  in  case  suit  is  brought  against  the  employer 
will  prevent  the  holder  from  recovering  the  costs. 

THE  MEASURE  OF  DAMAGES  UNDER  THE  LAW  OF  ILLINOIS 
FOR  THE  BREACH  BY  THE  VENDEE  OF  A  CONTRACT  TO  PUR- 
CHASE GOODS. 

(Marquette  Cement  Mfg.  Co.,  April  9th,  1904.) 

"Early  in  1903  we  entered  into  several  con- 
tracts in  writing  with  customers  of  ours  wherein 
we  agreed  to  deliver  them,  and  they  agreed  to 
purchase,  specified  amounts  of  cement  at  a  fixed 
price.  During  the  life  of  these  contracts  the  mar- 
ket price  declined  materially,  and  the  other  parties 
to  the  contracts  were  unwilling  to  take  the  cement 
under  their  contracts.  Kindly  advise  us  what,  if 
any,  is  the  measure  of  damages  which  we  may  re- 
cover under  these  contracts. 

Where  a  vendee  of  goods,  sold  at  a  specific  price, 
refuses  to  take  and  pay  for  the  goods,  when  tendered 
the  vendor  has  a  choice  of  three  remedies. 

First,  the  vendor  may  store  the  goods  for  the  ven- 
dee, give  notice  that  he  has  done  so,  and  then  recover 
the  full  contract  price ;  second,  he  may  keep  the  goods, 
and  recover  the  difference  between  the  contract  price 
and  the  market  price  of  the  goods  at  the  time  and 
place  of  delivery,  or,  third,  he  may  sell  the  goods,  to 
the  best  advantage,  and  recover  of  the  vendee  the 
loss,  if  the  goods  fail  to  bring  the  contract  price. 

In  the  latter  case,  the  vendor  acts  as  the  agent  for 
the  vendee  he  is  held  to  the  same  degree  of  care,  judg- 


386 

ment  and  fidelity  that  is  imposed  by  the  law  upon  an 
agent  having  goods  in  his  possession  with  instructions 
to  sell  them  to  best  advantage. 
See  the  following  authorities: 

Bagley  v.  Findlay,  82  111.,  524. 

Ames  v.  Moir,  130  111.,  582. 

Roebling's  Sons  Co.,  130  111.,  660. 

Trunkey  v.  Hedstrom,  131  111.,  204. 
v  Neuberger  v.  Rountree,  18  111.  App.,  610. 

Norton  v.  Hummel,  22  111.  App.,  194. 

Aultman  &  Co.  v.  Hender&on,  32  111.  App.,  331. 

Kendall  v.  Young,  40  111.  App.,  391. 

Western  Union  Cold  Storage  Co.  v.  Winona 

Produce  Co.,  84  111.  App.,  678. 

In  the  case  of  contracts  for  the  sale  of  articles  to 
be  manufactured,  where  the  vendee  repudiates  the  con- 
tract before  the  goods  are  manufactured,  the  actual 
damages  suffered  are  the  measure  of  recovery,  viz., 
the  difference  between  the  cost  of  manufacture  and  the 
contract  price,  from  which  there  must  be  a  deduction 
for  the  less  time  employed  and  for  the  release  from 
care,  trouble,  risk  and  liability  attending  a  full  execu- 
tion of  the  contract. 

Roehm  v.  Horts,  178  U.  S.,  1. 

Hinkley  v.  Pittsburgh  Co.,  121  U.  S.,  264. 

Rice  v.  Glass  Co.,  88  111.  App.,  407. 

LIABILITY  OP  A  COEPOEATION  FOR  A  NOTE  OF  A  THIRD  PER- 
SON WHICH  IT  HAD  SOLD  TO  A  BANK,  GUARANTEEING  THE 
PAYMENT  THEREOF,  WHEN  THE  MAKER  PAYS  THE  NOTE 
TO  A  BANK  TO  WHICH  IT  HAD  BEEN  SENT  FOR  COLLECTION, 
AND  THE  LATTER  DOES  NOT  REMIT  TO  THE  BANK  TO  WHOM 
THE  NOTE  WAS  SOLD. 

(Edward  Hines  Lumber  Company,  April  13,  1904.) 
From  the  original  inquiry  of  November  25th  and  the 
further  information  conveyed  in  the  Lumber  Com- 
pany's letter  of  January  12th,  which  I  received  on 
April  2nd,  the  facts  upon  which  my  opinion  is  asked 
appear  to  be  as  follows: 

The  Lumber  Company  held  a  note  of  John  Smith's 


387 

for  $5,000,  payable  at  the  First  National  Bank  of  Port 
Huron,  Michigan.  It  does  not  appear  to  whose  order 
this  note  was  payable,  but  whether  payable  to  the  order 
of  John  Smith,  the  maker,  or  to  that  of  the  Lumber 
Company,  it  appears  that  the  Lumber  Company  sold 
this  note  to  the  First  National  Bank  of  Chicago  by  in- 
dorsing it  over  to  that  bank.  The  Lumber  Company  is 
not  a  depositor  at  the  First  National  Bank  and  it  did 
not  owe  that  bank  any  money,  its  only  liability  to  the 
bank  being  that  growing  out  of  its  endorsement  of  the 
note  in  question. 

The  First  National  Bank  of  Chicago,  when  the  note 
was  discounted  with  it  by  the  Lumber  Company,  paid 
to  the  Lumber  Company  the  proceeds  of  the  discount. 
The  Lumber  Company  did  not  have  an  account  at  the 
First  National  Bank  of  Chicago,  and  the  proceeds  of 
the  note  were  not  credited  to  the  Lumber  Company, 
but  were  paid  direct  to  it  by  the  Chicago  bank.  The 
indorsement  of  the  bank  was  a  blank  indorsement. 
Whether  in  law  this  indorsement  is  a  guaranty  or  not 
depends  very  much  upon  the  question  to  whom  the  note 
was  made  payable.  If  it  was  payable  to  the  order  of 
the  Lumber  Company  and  then  its  name  put  on  the 
back  of  the  note  this,  in  the  absence  of  a  contract  to 
the  contrary,  would  constitute  an  ordinary  indorse- 
ment, but  whether  the  indorsement  is  purely  an  in- 
dorsement or  guaranty  under  the  facts,  in  my  opinion, 
does  not  affect  the  answer  to  the  question  submitted 
to  me. 

The  First  National  Bank  of  Chicago  thus  became 
the  owner  of  the  note.  Thereafter,  in  due  course,  the 
Chicago  Bank  sent  this  note  to  the  First  National  Bank 
of  Port  Huron  for  collection.  It  will  be  noticed  that 
the  First  National  Bank  of  Port  Huron,  to  which  the 
note  was  sent  for  collection,  was  the  bank  at  which  the 
note,  by  its  terms,  was  payable.  The  Port  Huron  bank 
collected  the  note  from  the  maker. 

It  does  not  appear  from  the  facts  stated  whether 
the  Port  Huron  bank  was  the  regular  correspondent  of 
the  Chicago  bank,  or  whether  or  not  there  was  between 
the  two  banks  what  is  known  as  a  running  account. 


388 

In  other  words, — whether  the  Port  Huron  bank  acted 
as  correspondents  ordinarily  do — make  collections  and 
return  the  proceeds  thereof  from  time  to  time,  or 
credited  the  same  as  is  done  when  ordinary  deposits 
are  made. 

As  I  understand  it,  the  Lumber  Company  does  not 
inquire  whether  there  was  any  negligence  on  the  part 
of  the  Chicago  bank  in  sending  the  note  for  collection 
to  the  Port  Huron  bank,  at  which  it  was  payable.  It 
does  not  appear  how  John  Smith,  the  maker  of  the 
note,  paid  it,  whether  by  drawing  a  check  on  the  Port 
Huron  bank,  where  it  was  payable,  or  in  some  other 
way. 

Upon  the  facts,  as  they  are  stated  to  me,  I  am  clearly 
of  the  opinion  that  the  Chicago  bank  became  the  owner 
of  the  note  and  that  when  it  sent  the  note  to  Port 
Huron  for  collection  the  Port  Huron  bank  acted  for 
the  Chicago  bank,  and  that  when  the  maker  of  the  note 
paid  it  to  the  Port  Huron  bank  he,  the  maker,  dis- 
charged his  obligation  and  his  liability  on  the  note 
ceased.  The  Lumber  Company,  whether  as  indorser 
or  guarantor,  had  no  greater  liability  in  law  than  an 
undertaking  that  the  maker  would  pay  the  note.  This 
the  maker  did.  Payment  to  the  Port  Huron  bank, 
which  was  acting  for  the  Chicago  bank,  was,  so  far  as 
the  Lumber  Company  is  concerned  and  so  far  as  the 
maker  of  the  note  is  concerned,  payment  of  the  note 
and  a  discharge  of  the  liability  of  both  the  maker  and 
of  the  Lumber  Company. 

Upon  the  facts  submitted  to  me  I  can  see  no  legal 
ground  to  sustain  the  alleged  contention  of  the  Chicago 
bank. 

THE  RIGHT  OF  THE  EMPLOYEE  TO  SPECIFY  THE  TIME  OF 
DAY  FOB  EMPLOYES  TO  VOTE  UNDEE  THE  LAW  OF  ILLI- 
NOIS. 

(Whiting    Foundry    Equipment    Company,    May    18, 

1904.) 

''We  quote  from  paragraph  189,  Sec.  25,  Chap. 
46,  Starr  &  Curtis '  Revised  Statutes : 


389 

'The  employer  may  specify  the  hours  during 
which  said  employee  may  absent  himself  as  afore- 
said.' Can  the  noon  hour  be  specified  as  one  of 
the  two  hours  to  which  the  employee  is  entitled 
under  the  law?  In  other  words,  would  the  em- 
ployer be  complying  with  the  law  by  allowing  his 
employees  from  11  a.  m.  to  1  p.  m.  or  from  12  m. 
to  2  p.  m.  ?  If  no  opinion  has  been  rendered  by 
your  attorney  on  this  point,  will  you  kindly  ask 
him  for  same?" 

The  employer  may  undoubtedly  specify  the  hours 
during  which  the  employee  may  absent  himself.  The 
law,  however,  provides  that  the  employe  shall  be  en- 
titled to  absent  himself  "from  any  services  or  employ- 
ment in  which  he  is  then  engaged  or  employed. ' ' 

It  is  thus  apparent  that  the  legislature  intended  that 
the  employee  should  be  entitled  to  two  hours  freedom 
from  services  or  employment.  If,  therefore,  the  em- 
ployer specifies  the  hours  in  question  to  be  from  1  to 
3  p.  m.,  for  instance,  and  the  usual  lunch  hour  is  in- 
cluded in  these  hours,  this,  in  my  opinion,  would  prob- 
ably not  be  a  compliance  with  the  statute  as  it  would 
not  constitute  "two  hours"  absence  from  "services  or 
employment. ' ' 

I  do  not  pass  on  the  constitutionality  of  the  law, 
particularly  if  it  be  attempted  to  apply  it  to  those  who 
work  by  the  "piece"  or  "hour." 

AS  TO  TAKING  PEOPEETY  TO  WIDEN  A  STEEET  UNDER  CON- 
DEMNATION PROCEEDINGS,  THE  MEASURE  OF  DAMAGES 
THEEEFORE  AND  THE  EFFECT  UPON  THE  DURATION  OF 
LEASES  ON  PROPERTY  TAKEN. 

(Thompson  &  Taylor  Spice  Company,  May  18,  1904.) 
"The  talk  of  widening  Michigan  Ave.,  by  cut- 
ting off  forty  feet  of  the  buildings  on  the  east  side 
of  the  street,  between  Randolph  St.  and  the  River, 
suggests  some  legal  questions.  In  the  event  this 
plan  goes  beyond  the  talking  stage,  these  ques- 
tions would  greatly  interest  occupants  and  prop- 
erty holders  on  this  block.  We  would  like  to  know 


390 

something  of  the  modus  operandi  of  condemning 
the  property  and  how  people  situated  as  we  are 
would  go  about  protecting  themselves  against 
great  indirect  loss,  at  least ;  for  the  installation  of 
a  new  plant  and  getting  to  it  requires  much  time 
and  money.  The  claim  that  the  value  of  the  prop- 
erty left  would  be  enhanced  sufficient  to  compen- 
sate for  all  or  part  of  the  loss  due  to  the  dimin- 
ished size,  is  a  speculation  we  would  rather  not  in- 
dulge in.  Our  building  is  modern,  of  mill  con- 
struction, exactly  suited  to  our  purpose  and  is  ad- 
vantageously located.  It  contains  a  large  amount 
of  machinery  which  could  not  be  moved  except  at 
a  great  expense,  installation  and  adaptation  to  our 
needs  constituting  a  large  part  of  its  cost. 

We  occupy  leased  ground,  the  lease  having  some 
eighty-seven  years  to  run.  The  size  of  our  lot  is 
about  90x130. 

With  40  ft.  cut  off  the  front  of  the  building,  it 
would  be  useless  for  our  purpose. 

We  are  also  interested  to  know  what  effect  this 
would  have  on  our  lease.    Kindly  submit  this  to 
Mr.  Mayer  with  a  view  to  getting  such  an  opinion 
as  this  statement  of  facts  warrants. ' ' 
The  property  in  question  can  only  be  taken  against 
the  will  of  the  owner  or  occupant  by  the  institution  of 
condemnation  proceedings.    The  question  of  the  value 
of  the  amount  of  damages  will  then  be  a  question  for  a 
jury  to  determine. 

The  measure  of  damages  in  general  for  property 
actually  taken  is  the  fair  cash  market  value  of  the 
property.  For  the  property  damaged,  the  measure  of 
damage  in  general  is  the  difference  in  the  value  of  the 
property  before  and  after  the  construction  of  the  im- 
provement. Special  benefits  to  the  property  not  taken 
must  be  considered  in  estimating  the  damage  to  the 
property  not  taken.  In  other  words,  the  test  whether 
or  not  property  not  taken  is  damaged  is  the  effect  of 
the  improvement  upon  the  value  of  the  property  not 
taken.  These  are  questions  of  fact  to  be  determined 
upon  evidence  of  experts  which  each  side  produces. 


391 

Whether  or  not  taking  of  leased  property  operates 
as  an  extinguishment  of  the  lease  depends,  in  the  ab- 
sence of  a  special  agreement  between  lessor  or  lessee, 
upon  the  extent  of  the  taking,  if  the  taking  is  such  as 
to  substantially  destroy  or  make  useless  the  part  not 
taken.  Where  a  portion  only  of  the  leased  premises 
are  taken  and  a  part  remains  which  is  susceptible  of 
occupation  under  the  lease,  the  covenants  of  the  lease 
are  not  abrogated  and  the  tenant  is  liable  for  the  rent. 
The  tenant  is  not  liable  to  any  apportionment  or  abate- 
ment of  the  rent  for  the  land  taken,  but  is  bound  to 
pay  rent  for  the  whole  of  the  premises  demised,  and 
must  look  to  the  public  or  party  condemning  for  his 
compensation,  unless  there  is  an  agreement  to  the  con- 
trary in  the  lease. 

Corrigan  v.  City,  144  111.,  537. 
Stubbings  v.  Evanstftn,  136  111.,  37. 

If  the  whole  of  the  leased  premises  are  taken,  there 
is  no  liability  for  rent.  (See  cases  supra,.} 


AS  TO  THE  VALIDITY  OF  CONTRACTS  ENTERED  INTO  ON  SUN- 
DAY UNDER  THE  LAW  OF  ILLINOIS. 

(Monmouth  Pottery  Co.,  May  18,  1904.) 
"We  beg  to  refer  to  you  a  question  which  comes 
up  with  us  today  in  the  course  of  business,  and 
would  ask  that  you  please  have  your  counsel  ad- 
vise us  whether  or  not  an  insurance  policy  dated 
on  Sunday  is  valid  and  not  liable  to  be  questioned 
on  this  point  in  case  of  loss.    We  are  advised  that 
there  are  some  kinds  of  papers  which  are  not 
legally  drawn  on  Sunday  and  would  ask  that  you 
kindly  advise  us  regarding  whether  or  not  it  ad- 
mits controversy  on  an  insurance  policy." 
Such  a  contract  was  valid  at  a  common  law,  and  is 
valid  in  Illinois  unless  positively  prohibited  by  statu- 
tory enactment. 

"Sections  261  and  262  of  the  Criminal  Code 
provide : 

261 :    Whoever  disturbs  the  peace  and  good  or- 


392 

der  of  society  by  labor  (works  of  necessity  and 
charity  excepted)  or  by  any  amusement  or  di- 
version on  Sunday,  shall  be  fined  not  exceeding 
$25.  This  section  shall  not  be  construed  to  pre- 
vent watermen  and  railroad  companies  from  land- 
ing their  passengers,  or  watermen  from  loading 
or  unloading  their  cargoes,  or  ferrymen  from  car- 
rying over  the  water  travelers  and  persons  mov- 
ing their  families,  on  the  first  day  of  the  week, 
nor  to  prevent  the  due  exercise  of  the  rights  of 
conscience  by  whomever  thinks  proper  to  keep  an- 
other day  as  a  Sabbath. 

262 :  Whoever  shall  be  guilty  of  any  noise,  riot 
or  amusement  on  the  first  day  of  the  week,  called 
Sunday,  whereby  the  peace  of  any  private  family 
may  be  disturbed,  shall  be  fined  not  exceeding 
$25." 

These  are  the  only  statutory  provisions  in  Illinois 
bearing  upon  the  subject. 

In  Richmond  v.  Moore,  107  111.,  429,  it  was  held  that 
the  word  "Labor"  as  used  in  the  above  statute,  did 
not  include  business,  and  that  a  business  contract  did 
not  come  within  the  condemnation  of  the  statute.  To 
the  same  effect  see : 

Eden  v.  People,  161  111.,  296. 
Collins  v.  Stephens,  189  111.,  200. 
I  am  of  the  opinion,  therefore,  that  the  policy  in 
question  is  valid  and  enforceable. 


AS  TO  WHAT  CONSTITUTES  A  COMPOSITION  WITH  CREDITORS 
AND  THE  EFFECT  THEREOF. 

(Illinois  Sewing  Machine  Co.,  May  18,  1904.) 

"Have  read  with  much  interest  the  opinion  of 
Mr.  Levy  Mayer,  counsel  general,  as  to  the  effect 
of  sending  a  check  in  full  settlement  of  account, 
where  the  amount  of  the  check  is  less  than  the 
amount  due. 

This  brings  up  another  question  which  we  feel 
sure  will  be  of  general  interest;  in  case  a  firm 


393 
[ 

is  about  to  take  advantage  of  the  bankruptcy  act, 
or  for  any  reason  or  other  they  offer  a  general 
settlement  to  all  of  their  creditors  of  so  many 
cents  on  the  dollar,  same  to  be  in  full  settlement 
of  all  amounts  due,  in  case  the  amount  is  not  in 
dispute,  and  their  offer  of  settlement  is  accepted 
and  receipt  given  in  full  of  account  is  there  no 
further  recourse?  Does  that  finally  settle  the 
matter,  or  is  there  still  a  lawful  claim  for  the  bal- 
ance of  the  debt  T ' 

If  two  or  more  creditors  agree  with  the  debtor  to 
accept  a  sum  less  than  is  due  them,  this  constitutes  a 
composition.  This  is  a  new  agreement  not  only  be- 
tween the  debtor  and  the  creditors,  who  enter  into  it, 
but  also  an  agreement  of  those  creditors  among  them- 
selves, each  with  the  others.  In  order  to  constitute  a 
valid  composition,  the  debtor  must  be  in  embarrassed 
circumstances,  although  it  is  not  necessary  that  he  be 
actually  insolvent.  In  addition  to  the  ordinary  mu- 
tuality necessary  to  every  contract,  a  composition  must 
contain  the  further  element  of  mutuality  among  the 
creditors  themselves,  That  is,  it  must  be  entered 
into  by  them  in  reliance  upon  their  mutual  concessions, 
and  in  furtherance  of  a  common  purpose  to  secure 
their  claims  by  compromise  and  settlement.  A  series 
of  separate  and  independent  compromises  with  indi- 
vidual creditors,  will  not  constitute  a  composition.  But, 
if  the  common  purpose  is  present,  the  fact  that  the 
agreements  were  made  separately  will  not  prevent  the 
arrangement  from  being  considered  as  a  composition. 
While  it  is  true  that  a  debt  cannot  be  satisfied  by  the 
payment  of  a  less  sum  on  account  of  the  lack  of  con- 
sideration, a  composition  is  an  exception  to  this  rule. 
The  validity  of  a  composition  rests  upon  the  mutual 
agreement  of  the  creditors  to  forego  their  legal  rights 
and  accept  what  is  offered  for  their  common  benefit. 
The  promise  of  each  is  the  consideration  for  that  of 
the  others. 

An  executed  composition  supersedes  the  original 
cause  of  action  and  settles  the  claims  and  extinguishes 
the  debts  included  in  it,  and  the  rights  and  remedies 


394 

of  the  parties  depend  thereafter  on  the  new  agree- 
ment. 

Gittfillan  v.  Farrington,  12  111.  App.,  101. 

National  Time  Recorder  Co.  v.  Feypel,  93  111. 
App.,  170. 


WHETHER  A  CORPORATION  CAN  LEGALLY  HOLD  REAL  ESTATE. 

(111.  Mfrs.  Assn.,  May  18,  1904.) 
"In  the  course  of  conducting  business  we  ac- 
quire more  or  less  real  estate  situated  in  this 
and  other  states.  It  is  our  aim  and  desire  to  dis- 
pose of  same  without  delay,  but  it  quite  frequently 
happens  that  it  is  not  expedient  to  dispose  of 
same,  or  if  we  should  force  it  into  the  market, 
it  would  be  at  a  great  sacrifice,  and  we  therefore 
have  before  us  the  subject  of  whether  we  can,  as 
a  corporation,  or  through  a  trustee,  legally  hold 
same  and  convey  proper  title.  We  believe  other 
members  of  the  Association  must  be  interested  in 
the  question,  and  if  you  think  it  of  general  inter- 
est, will  you  kindly  have  same  referred  to  the 
General  Counsel  for  his  opinion  and  views  on  the 
subject  I ' ' 

A  corporation  of  one  state  may  acquire  and  hold 
real  estate  in  a  foreign  state,  provided,  the  exercise 
of  this  right  is  not  inconsistent  with  the  charter  of 
the  corporation  or  the  laws  of  its  creation,  and  is  not 
forbidden  by  the  laws  or  public  policy  of  the  foreign 
state. 

The  question  can  only  be  specifically  determined 
by  reference  to  the  company's  charter  and  the  laws 
of  the  particular  state  where  the  real  estate  in  question 
is  situated.  I  must,  therefore,  have  more  facts  before 
I  can  answer  the  query  definitely. 

Although  a  corporation  is  incapacitated  from  ac- 
quiring title  to  lands,  a  conveyance  to  it  is  not  for 
that  reason  necessarily  void.  As  a  general  rule,  the 
conveyance  is  only  voidable.  In  such  a  case  it  cannot 
be  attacked  collaterally  in  a  suit  between  private  par- 


395 

ties,  but  only  in  a  direct  proceeding  by  the  state.  This 
is  only  true,  however,  where  the  corporation  is 
authorized  to  hold  real  estate  for  some  purpose,  or  to  a 
certain  extent. 

If  the  corporation  is  absolutely  prohibited  from  ac- 
quiring and  holding  any  lands  for  any  purpose,  a  con- 
veyance to  it  is  void  and  will  carry  no  title. 


AS  TO  WHAT  ELECTIONS  EMPLOYES  ARE  ENTITLED  TO  LEAVE 
OF  ABSENCE  TO  VOTE  UNDER  THE  LAW  OF  ILLINOIS. 

(Whiting  Foundry  Equipment  Co.,  May  18,  1904.) 

"If  you  have  had  no  opinion  from  Mr.  Levy 
Mayer,  will  you  kindly  ask  him  what  the  term 
'general  election'  means?  In  other  words,  are 
employes  entitled  to  take  time  at  employer's  ex- 
pense for  voting  at  any  and  all  elections'?  We 
should  be  pleased  to  hear  from  you  on  this  point 
as  early  as  possible. ' ' 

Section  25  of  the  Ballot  Law  of  1891  provides : 

"Any  person  entitled  to  vote  at  a  general  elec- 
tion in  this  state  shall,  on  the  day  of  such  elec- 
tion, be  entitled  to  absent  himself  from  any  serv- 
ices or  employment  in  which  he  is  then  engaged 
or  employed  for  a  period  of  two  hours  between 
the  time  of  opening  and  closing  the  polls,  and 
such  voter  shall  not  because  of  so  absenting  him- 
self be  liable  to  any  penalty,  nor  shall  any  de- 
duction be  made  on  account  of  such  absence  from 
Ms  usual  salary  or  wages;  Provided,  however, 
that  application  for  such  leave  of  absence  shall 
be  made  prior  to  the  day  of  election.  The  em- 
ployer may  specify  the  hours  during  which  said 
employe  may  absent  himself  as  aforesaid.  Any 
person  or  corporation  who  shall  refuse  to  an  em- 
ploye the  privilege  hereby  conferred,  or  shall  sub- 
ject an  employe  to  a  penalty  or  deduction  of  wages 
because  of  the  exercise  of  such  privilege,  or  who 
shall  directly  or  indirectly  violate  the  provisions 
of  this  section,  shall  be  deemed  guilty  of  a  misde- 


396 

meaner  and  be  fined  in  any  sum  not  less  than  five 
dollars  ($5)  nor  more  than  one  hundred  dollars 
($100)." 

A  "general  election"  is  defined  in  Section  2  of  the 
same  law  as  follows : 

"The  term  'general  election'  as  used  in  this  act, 
shall  apply  to  any  election  held  for  the  choice  of  a 
national,  state,  judicial,  district  or  county  officer, 
whether  for  the  full  term  or  for  the  filling  of  a 
vacancy.  The  term  'city  election'  shall  apply  to 
any  municipal  election  held  in  the  city,  village  or 
incorporated  town." 

THE  POWER  OF  THE  STATE  OP  NEW  JERSEY  TO  COMPEL  FOR- 
EIGN CORPORATIONS  TO  PAY  TAXES  FOR  DOING  BUSINESS 
IN  THAT  STATE. 

(Crane  Co.,  May  18,  1904.) 

"With  this  we  enclose  copy  of  new  foreign  cor- 
poration act  of  New  Jersey,  effective  March  29th 
last,  together  with  blank  sent  us  by  the  state  au- 
thorities to  be  filled  out.  You  will  notice  from 
the  foot  note  on  the  last  mentioned  paper  that 
'Business  done  in  the  State  of  New  Jersey'  is 
construed  to  mean  'Receipts  derived  from  the 
sales  of  merchandise,  etc.,  within  the  State  of  New 
Jersey. ' 

This  company  maintains  branches  in  the  cities 
of  New  York  and  Philadelphia,  and  has  travel- 
ing representatives  in  the  State  of  New  Jersey 
soliciting  orders,  which  are  taken,  however,  sub- 
ject to  the  approval  by  the  respective  branch  house 
managements.    We  carry  no  stock  in  the  State  of 
New  Jersey.    Under  these  circumstances,  are  we 
obliged  to  make  the  report  referred  to  ? " 
It  is  beyond  the  power  of  a  state  to  compel  foreign 
corporations,  engaged  solely  in  interstate  commerce, 
to  pay  taxes  for  the  privilege  of  carrying  on  such 
commerce  in  a  state.    I  understand  that  the  Crane  Co. 
does  business  in  New  Jersey  solely  through  the  medium 
of  traveling   salesmen,   who   take   orders    subject   to 


397 

the  approval  of  the  home  office,  and  that  the  com- 
pany maintains  no  office  and  carries  no  stock  of  goods 
in  New  Jersey.  I  am,  therefore,  of  the  opinion  that 
the  business  of  the  Crane  Co.  in  New  Jersey  consti- 
tutes interstate  commerce,  and  that  the  company  need 
not  comply  with  the  New  Jersey  foreign  corporation 
law.  I  assume  that  the  Crane  Co.  is  not  incorporated 
in  New  Jersey. 

THE  RECOURSE  OF  A  SHIPPER  AGAINST  A  RAILROAD  COMPANY 
FOR  DAMAGES  ARISING  FROM  DELAY  OF  GOODS  IN  TRANSIT 
AND  AS  TO  THE  EFFECT  OF  AN  EMBARGO  LAID  BY  CARRIERS 
AGAINST  THE  TRANSPORTATION  OF  GOODS. 

(Mathis  Brothers  Company,  May  19,  1904.) 

"On  Feb.  5th  we  consigned  to  the  Eaton,  Cole 
&  Burnham  Co.,  Bridgeport,  Conn.,  a  carload  of 
manufactured  galvanized  steel,  Pennsylvania  Car 
No.  91803  via  the  Pennsylvania  Ey.  This  car  has 
not  yet  arrived  at  destination  and  we  are  just  in 
receipt  of  letter  from  the  General  Superintendent 
of  Freight  Transportation  of  Pittsburgh,  Pa.,  stat- 
ing that  the  car  has  just  been  transferred  to  the 
through  line,  on  March  28th.  We  would  like  to 
have  an  opinion  from  your  general  counsel  whether 
we  have  recourse  against  the  Railroad  Company 
for  damages  owing  to  non-delivery  of  this  car. 
There  is  absolutely  no  excuse  whatsoever  for  such 
treatment.  You  will  note  that  the  car  has  been  in 
transit  between  here  and  Pittsburg  forty-eight 
days.  The  Pennsylvania  Railway  Company  claim 
that  there  has  been  an  embargo  on  their  line.  They 
did  not  inform  us  of  this  when  they  took  our  car 
or  else  we  would  have  routed  it  another  way. ' ' 
The  liability  of  the  carrier  for  delay  is  covered  in 
my  opinion  of  October  28,  1902,  in  answer  to  the  query 
of  F.  T.  Bentley,  chairman  of  the  Traffic  Committee. 

The  liability  of  the  initial  carrier  for  delay  occurring 
on  connecting  lines,  is  covered  in  my  opinion  of  Octo- 
ber 30,  1903,  in  answer  to  the  query  of  the  Austin  Mfg. 
Co. 


398 

An  initial  carrier  is  liable  for  delay  on  its  own  line. 
If  a  delay  occurs  on  the  line  of  a  connecting  carrier, 
such  carrier  is  liable.  The  authorities  are  not  agreed 
as  to  whether  the  initial  carrier  is  liable  for  a  delay 
occurring  on  the  line  of  the  connecting  or  intermediate 
carrier.  The  initial  carrier  may  contract  specially  for 
such  through  liability.  The  Illinois  courts  have  held 
that  issuing  a  through  bill  of  lading  makes  the  initial 
carrier  responsible  for  the  safe  and  prompt  carriage 
over  the  entire  route. 

The  question  as  to  what  is  a  reasonable  time  for  de- 
livery being  one  of  fact  for  the  jury,  no  definite  rule 
can  be  stated  as  to  what  will  or  will  not  constitute 
negligence.  (6  Cyc.,  443.) 

In  III.  Central  R.  Co.  v.  Cobb,  64  111.,  128,  where  the 
ordinary  time  for  transportation  of  freight  between 
two  points  was  about  three  days,  a  delay  of  thirty 
days  was  found  to  be  unreasonable.  Delay  was  at- 
tempted to  be  justified  on  account  of  accumulation  of 
cars. 

In  III.  C.  R.  R.  v.  McClellan,  54  111.,  58,  the  ordinary 
time  was  less  than  three  days;  part  of  the  shipment 
arrived  in  eleven  days  and  a  part  45  days  after  ship- 
ment. The  delay  was  held  to  be  unreasonable.  Ac- 
cumulation of  freight  at  the  place  of  delivery  was  held 
not  to  excuse  the  delay  in  that  case. 

A  carrier  is  bound  to  know,  when  he  accepts  prop- 
erty for  shipment,  that  he  has  or  can  obtain  facilities 
for  its  transportation  within  a  reasonable  time. 

Thomas  v.  Wabash,  etc.,  R.  Co.,  63  Fed.,  200. 

As  to  any  cause  of  delay  which  he  might  anticipate 
he  should  advise  the  shipper,  and  if  he  does  not  do  so 
the  delay  will  not  be  ensued. 

Cincinnati,  etc.,  R.  Co.  v.  Webb,  46  S.  W.,  11 

(Ky.). 

McLaren  v.  Detroit,  etc.,  R.  R.,  23  Wis.,  138. 
Bussey  v.  Memphis,  etc.,  R.  R.,  13  Fed.,  330. 
Ayres  v.  C.  &  N.  W.  R.  Co.,  71  Wis.,  372. 

Where  the  carrier  specifically  agrees  to  deliver  by 
a  fixed  time  he  must  answer  in  damages  for  failure  to 
do  so  and  unavoidable  accident,  unexpected  rush  of 


399 

business,  or  the  like  will  not  furnish  an  excuse.  He 
may  refuse  to  receive  goods  on  the  ground  of  press 
of  business,  if  he  treats  all  alike.  Generally  speaking, 
where  the  carrier  has  already  received  goods  for 
transportation,  he  will  be  held  to  answer  for  damages 
due  to  delay,  although  occasioned  by  an  unusual  press 
of  business 

Faulkner  v.  8.  P.  R.  Co.,  51  Mo.,  311. 

International,  etc.,  R.  Co.  v.  Anderson,  21  S. 

W.,  691  (Tex.). 

Unless  the  press  of  business  could  not  have  been 
anticipated  at  the  time  the  goods  were  received,  and 
the  carrier  can  only  excuse  himself  for  delay  on  ac- 
count of  unusual  press  of  business  by  showing  that 
he  has  made  the  best  practicable  use  of  his  means  of 
transportation. 

I.  C.  R.  R.  v.  Cobb,  supra. 

I.  C.  R.  R.  v.  McClelland,  supra. 
The  communication  states  that  the  P.  R.  E.  Co. 
''claim  that  there  has  been  an  embargo  on  their  line." 
It  is  not  clear  .whether  this  means  that  the  embargo 
was  their  own,  or  the  embargo  of  the  connecting  car- 
rier against  their  cars.  I  assume  that  the  embargo 
was  their  own,  as  the  delay  of  forty-eight  days  oc- 
curred between  Chicago  and  Pittsburgh,  points  on  the 
Pennsylvania  System. 

An  embargo  is  a  declaration  by  a  carrier  that  the 
condition  of  congested  traffic  exists  that  will  justify  it 
in  refusing  to  receive  freight  consigned  from  certain 
points  to  certain  other  points.  A  carrier  may  give 
reasonable  preference  to  certain  goods  over  other 
goods,  as  for  instance,  relief  goods  sent  to  sufferers 
from  some  public  calamity.  (Mich.  Cent.  R.  Co.  v. 
Burrows,  33  Mich.,  6.  A  carrier  may  also  give  prece- 
dence to  perishable  freight. 

Marshall  v.  N.  Y.  Cent.  R.  R.,  45  Barb.  (N. 
Y.),  502. 

Peet  v.  C.  &  N.  W.  R.  R.,  20  Wis.,  624. 
In  8.  S.  Daish  &  Sons  v.  C.  A.  &  C.  Ry  Co.  et  al.,  9 
Interstate   Commerce   Reports,   513,   complainant   al- 
leged unjust  discrimination  against  it  in  favor  of  other 


400 

shippers  by  reason  of  unreasonable  delay  in  forward- 
ing and  delivering  a  carload  of  hay  consigned  from 
Condit,  0.,  to  Washington,  D.  C.,  and  prayed  for  an 
award  of  damages.  The  commission  held  that  no  un- 
just discrimination  or  undue  prejudice  to  the  com- 
plainant having  been  shown,  the  complaint  should  be 
dismissed.  The  facts  were  as  follows : 

A  car  of  hay  was  delivered  to  the  C.  A.  &  C.  Ey. 
December  8,  1902,  routed  via  the  C.  A.  &  C.  Ey.  and 
the  B.  &  0.  E.  E.  The  car  arrived  December  10,  at 
Columbus,  the  junction  point  of  the  B.  &  0.  Counsel 
admitted  that  the  car  came  into  the  possession  of  the 
B.  &  0.  some  time  previous  to  December  27. 
On  January  29,  1903,  complainant  tendered  to 
the  B.  &  0.  agent  at  Washington,  the  bill  of 
lading  and  the  freight  charges  and  the  terminal  charge 
of  $1.00  at  Columbus.  The  car  had  not  arrived  at 
Washington,  and  complainant  brought  the  proceeding 
before  the  commission  on  January  31. 

In  consequence  of  the  great  difficulty  and  delay  in 
delivering  east-bound  freight  from  territory  west  of 
the  bituminous  coal  region,  the  B.  &  0.  issued  to  its 
connections  what  are  termed  "Embargo  notices"  to 
the  effect  that  certain  kinds  of  freight  would  not  be 
accepted  by  it.  The  first  of  these  was  issued  Decem- 
ber 26,  1902,  to  the  effect  that  on  and  after  December 
27,  until  further  notice,  the  B.  &  0.  couldn't  accept 
carload  freight  except  live  stock  and  perishable  from 
certain  points  on  connecting  lines  west  destined  for 
certain  points  on  or  via  its  lines  east  of  certain  other 
points.  On  January  5th  and  on  January  6th  further 
embargo  notices  were  issued  for  other  points,  and  there 
was  again  another  notice  on  January  28th  and  on 
February  5th. 

Supplement  No.  1  to  Embargo  Notice  No.  26  read  as 
follows : 

"Effective  March  10th,  the  embargo  placed  by 
this  company  on  carload  freight  from  western 
connections  in  Embargo  Notice  No.  26,  will  be 
raised  and  shipments  may  be  resumed  as  here- 
tofore." 


401 

The  object  of  these  notices  was  to  keep  open  the 
main  tracks  of  the  road  over  which  coal  was  being- 
transported,  and  besides  coal,  the  other  kinds  of  freight 
excepted  from  the  embargo;  to  release  and  forward 
the  freight  already  in  its  yards,  and  on  its  sidings,  as 
new  freight  would,  if  accepted,  only  increase  the  exist- 
ing congestion. 

The  commission  said  in  its  finding  of  facts : 

' '  It  was  not  unusual  for  restrictions  to  be  placed 
upon  certain  kinds  of  traffic  to  certain  places,  but 
no  such  general  restriction  had  ever  before  been 
found  necessary.  Similar  restrictions  upon  traffic 
were  made  by  other  railway  companies  on  the  rail 
lines  they  operated  over  which  coal  was  being 
transported  during  this  strike  period." 
The  commission  stated  its  conclusion  as  follows : 

"The  anthracite  coal  strike,  for  which  the  de- 
fendant railroad  company  do  not  appear  to  be  in 
any  way  responsible,  necessitated  the  transporta- 
tion of  bituminous  coal  from  the  mines  in  West 
Virginia,  Maryland  and  Pennsylvania  to  eastern 
points  to  supply  the  demand  for  fuel  for  indus- 
trial and  domestic  use,  and  this  operated  to  pre- 
vent the  shipment  of  some  other  classes  of  freight. 
Defendants  probably  had  the  right  to  give  such 
freight  the  preference,  and  it  was  not  improper 
that  live  stock,  perishable  freights,  and  material 
or  supplies  for  the  railroads  should  be  excepted 
from  any  embargo  imposed. 

It  is  also  proper  that  embargo  notices  should 
be  given  such  connecting  lines  so  as  to  avoid  the 
further  congestion  of  freight  in  junction  freight 
yards;  and  in  the  forwarding  of  freight  received 
from  connecting  lines,  it  was  proper  that  cars 
should  be  forwarded  as  far  as  practicable  in  the 
order  of  their  receipt,  so  that  there  should  be  no 
unreasonable  discrimination  or  preference  which 
might  be  avoided. 

Analyzing  the  testimony  regarding  the  various 
cars  passing  over  defendants'  lines,  it  is  found 
that  only  two  (one  from  Jasper,  Mich.,  and  one 


402 

from  the  Pere  Marquette  K.  B.)  'slipped  through 
to  destination  after  the  receipt  and  before  the  de- 
livery of  complainant's  car,  showing  that  the  em- 
bargo was  practically  maintained,  and  enforced, 
and,  therefore,  no  cause  exists  for  any  complaint 
or  discrimination  in  favor  of  individuals.  Neither 
does  there  appear  to  have  been  any  undue  prefer- 
ence given  or  favors  shown  to  localities  by  de- 
fendants' to  the  undue  prejudice  or  disadvantage 
of  complainant,  or  the  dealers  of  Washington  and 
Baltimore;  there  being  a  general  inability  to  sup- 
ply cars  as  well  as  motor  power — engines — for 
the  movement  of  freight.    The  necessity  for  keep- 
ing open  for  traffic  the  two  main  tracks  of  de- 
fendants' lines  east  of  Cumberland  required  great 
care  so  that  passenger  travel  and  extraordinary 
and  necessary  freight  transportation  should  not  be 
obstructed  or  interfered  with.     The  commission, 
however,  is  unable  to  find  from  the  testimony  that 
any  undue  or  unreasonable  prejudice  or  disad- 
vantage resulted  to  complainant,  or  that  the  de- 
fendants were  guilty  of  unjust  discrimination  by 
reason  of  any  of  the  facts  complained  of.     The 
complaint,  therefore,  should  be  dismissed." 
In  my  opinion,  after  the  receipt  of  freight  for  trans- 
portation where  the  carrier  had  reason  to  know  that 
the  conditions  were  such  as  to  make  an  embargo  immi- 
nent and  probable,  the  fact  that  an  embargo  was  actu- 
ally laid  after  receipt  of  the  freight,  will  not,  of  itself, 
excuse  the  carrier  from  his  previous  duty  to  notify  the 
shipper.    If  an  embargo  were  otherwise  a  defense  the 
carrier  must  also  show  the  necessity  of  the  embargo 
and  that  it  was  maintained  without  discrimination.    In 
the  present  case  in  the  absence  of  other  controlling 
circumstances  of  which  I  am  not  advised,  it  is  my 
opinion  that  the  railroad  company  is  liable  for  any 
damage  of  which  delay  complained  of  was  the  proxi- 
mate cause.     As  to  the  measure  of  damage  see  my 
opinion  of  October  30,  1903,  to  Austin  Mfg.  Co. 


403 


UPON  WHOM  THE  RISK  OF  LOSS  OR  DAMAGE  WILL  FALL  FOR 
GOODS  SHIPPED  BY  LAKE  AND  SOLD  F.  O.  B.  DOCK. 

(Hines  Lumber  Company,  May  18,  1904.) 
1  'We  have  had  numerous  opinions  from  Mr. 
Mayer,  the  attorney  of  your  association,  regard- 
ing the  ownership  of  lumber  sold  on  a  delivered 
basis.  As  we  understand  his  previous  opinions, 
a  car  of  lumber  sold  delivered  at  Toledo,  0.,  the 
moment  that  lumber  gets  into  the  hands  of  the 
railroad  company  the  buyer  is  responsible  for  the 
same  in  case  of  loss  or  damage,  and  that  the  seller 
looks  to  the  buyer  for  payment.  In  the  contract 
which  we  enclose  you,  we  are  supposed  to  deliver 
the  lumber  at  Tonawanda.  This  lumber  is  deliv- 
ered by  boat.  Does  the  same  principle  apply  in 
the  case  of  delivery  by  boat  as  by  car?  On  the 
lake,  cargo  insurance  is  obtainable  against  the 
perils  of  navigation.  In  the  case  of  a  delivery  of 
this  kind,  suppose  a  loss  occurred  on  the  lakes 
through  the  perils  of  navigation,  who  stands  the 
loss,  the  buyer  or  the  seller?  Is  a  delivered  price 
f.  o.  b.  dock  Tonawanda  merely  to  guarantee  the 
price,  or  must  the  seller  actually  deliver  the  lumber 
there?  If  he  actually  must  deliver  the  goods,  is 
he  not  then  liable  for  any  loss  that  occurs  while 
the  lumber  is  in  transit,  or  through  the  perils  of 
navigation,  or  must  the  buyer  insure  such  lumber 
against  the  perils  of  navigation,  and  is  the  lumber 
at  his  risk  the  moment  it  is  placed  over  the  rail  of 
the  vessel?" 

As  stated  in  my  opinion  of  October  24,  1903,  to  the 
American  Steel  &  Wire  Company,  loss  or  damage  to 
goods  shipped  occurring  during  transit  falls  ordinarily 
upon  the  owner  of  the  goods.  But  who  is  the  owner  as 
between  vendor  and  vendee,  is  primarily  a  question  of 
intention  to  be  determined  from  all  the  facts  and  cir- 
cumstances of  the  particular  case.  The  contract  under 
consideration  provides  that  the  lumber  is  to  be  "deliv- 
ered f.  o.  b.  docks  Tonawanda,  N.  Y."  In  the  absence 


404 

of  other  controlling  circumstances,  this  is  in  effect  an 
agreement  to  deliver  at  Tonawanda,  and  the  risk  would 
ordinarily  therefore  be  that  of  the  consignor.  The  con- 
tract, however,  provides : 

"Final  settlement  to  be  made  in  net  cash  upon 
shipment;  but  if  the  buyer  has  given  notes,  then 
any  amount  due  buyer  after  all  shipments  have 
been  made  shall  be  paid  upon  the  maturity  and 
payment  of  such  note.  It  is  agreed  that  the  time 
for  the  payments  and  shipments  by  buyer  shall  be 

considered  essential  parts  of  this  contract. 

***** 

The  title  to  all  lumber  not  paid  for  shall  remain 
in  seller  until  the  same  is  fully  paid  for  and  until 
any  notes  given  therefor  are  paid;  but  all  lumber 
shall  be  at  the  risk  of  buyer  after  shipment  from 
seller's  dock." 

The  effect  of  these  clauses  as  between  the  parties  is 
to  reserve  title  in  the  consignor  until  the  goods  are 
paid  for.  At  the  same  time,  however,  the  lumber  is 
expressly  "at  risk  of  buyer  after  shipment  from 
seller's  dock."  I  see  no  reason,  however,  why  the  con- 
signee cannot  legally  agree  that  even  though  the  title 
to  the  lumber  remains  in  the  consignor,  the  risk  is  that 
of  the  consignee. 

Benjamin  on  Sales  (3rd  Ed.),  Sec.  370. 
The  contract,  however,  could  in  my  opinion  be  made 
more  specific  as  to  the  nature  of  the  risk  assumed  by 
the  consignor.  The  same  conclusion  here  expressed 
applies  whether  the  shipment  be  by  rail  or  boat.  A 
different  principle  might  apply  if  the  consignor  is  the 
owner  of  the  boat. 


VALIDITY  OP  AN  INSURANCE  POLICY  DATED  ON  SUNDAY, 
UNDER  THE  LAW  OF  ILLINOIS. 

(Monmouth  Pottery  Co.,  May  18,  1904.) 
"We  beg  to  refer  to  you  a  question  which  comes 
up  with  us  to-day  in  the  course  of  business,  and 
would  ask  that  you  please  have  your  counsel  advise 


405 

us  whether  or  not  an  insurance  policy  dated  on 
Sunday  is  valid  and  not  liable  to  be  questioned  on 
this  point  in  case  of  loss?    We  are  advised  that 
there  are  some  kinds   of  papers  which  are  not 
legally  drawn  on  Sunday  and  would  ask  that  you 
kindly  advise  us  regarding  whether  or  not  it  admits 
controversy  on  an  insurance  policy. ' ' 
Such  a  contract  was  valid  at  common  law,  and  is 
valid  in  Illinois  unless  positively  prohibited  by  statu- 
tory enactment. 

Sections  261  and  262  of  the  Criminal  Code  provide : 
"26.1.  Whoever  disturbs  the  peace  and  good 
order  of  society  by  labor  (works  of  necessity  and 
charity  excepted)  or  by  any  amusement  or  diver- 
sion on  Sunday,  shall  be  fined  not  exceeding  $25. 
This  section  shall  not  be  construed  to  prevent 
watermen  and  railroad  companies  from  landing 
their  passengers,  or  watermen  from  loading  or 
unloading  their  cargoes,  or  ferrymen  from  carry- 
ing over  the  water  travelers  and  persons  moving 
their  families,  on  the  first  day  of  the  week,  nor 
to  prevent  the  due  exercise  of  the  rights  of  con- 
science by  whomever  thinks  proper  to  keep  any 
other  day  as  a  Sabbath. 

262.  Whoever  shall  be  guilty  of  any  noise,  riot 
or  amusement  on  the  first  day  of  the  week,  called 
Sunday,  whereby  the  peace  of  any  private  family 
may  be  disturbed,  shall  be  fined  not  exceeding 
$25." 

These  are  the  only  statutory  provisions  in  Illinois 
bearing  upon  the  subject. 

In  Richmond  v.  Moore,  107  111.,  429,  it  was  held  that 
the  word  "labor"  as  used  in  the  above  statute,  did 
not  include  business,  and  that  a  business  contract  did 
not  come  within  the  condemnation  of  the  statute.  To 
the  same  effect  see : 

Eden  v.  People,  161  111.,  296. 
Collins  v.  Stephens,  189  111.,  200. 
I  am  of  the  opinion,  therefore,  that  the  policy  in 
question  is  valid  and  enforceable. 


406 


REASONABLENESS  OF  CERTAIN  TELEPHONE  RATES  IN  CHI- 
CAGO AND  REMEDY  OF  SUBSCRIBER  WHEN  RATES  ARE 
EXORBITANT. 

(Sherwin-Williams  Co.,  May  19,  1904.) 
"The  Chicago  Telephone  Company  through  its 
representative  Mr.  F.  R.  Chester,  has  informed 
us  that  it  is  their  purpose  to  advance  the  rates 
for  service  given  to  us  over  the  trunk  lines  enter- 
ing our  premises  from  $125.00  to  $364.98  per  year 
for  each  line  and,  in  addition,  to  increase  the 
mileage  from  4  3/4,  as  per  the  original  contract, 
to  6  and  some  fraction.  The  charge  for  this 
mileage  now  is  $40.00  per  mile.  The  boundary 
line  which  they  have  established  we  have  not 
definitely  ascertained. 

Inasmuch  as  we  were  unable  to  get  a  satisfac- 
tory explanation  from  representatives  as  to  the 
cause  for  the  enormous  advance  which  they  ask 
and,  further,  the  fact  that  we  feel  the  mileage 
which  we  are  paying  of  $40.00  per  mile  is  in  ac- 
cordance with  the  laws  existing  regulating  these 
matters,  we  ask  for  ourselves  and  in  behalf  of  the 
manufacturers  in  this  district,  all  of  whom  have 
been  approached — some  accepting  new  contracts 
tendered  and  others  holding  the  matter  in  abey- 
ance awaiting  investigations  which  they  are  mak- 
ing— that  you  favor  us  with  such  opinion  as  you 
may  have  and  can  get  for  us  from  your  legal  de- 
partment covering  the  ground  in  question." 
I  do  not  know  whether  or  not  there  is  any  law  or  or- 
dinance in  force  in  the  Town  of  Pullman  fixing  the 
rates  which  the  telephone  company  may  charge  for 
telephone  service.    It  might  be  well  to  find  out  under 
what  authority  the  company  is  exercising  its  fran- 
chises in  Pullman  and  whether  or  not  there  is  any  such 
restriction  as  to  rates. 

The  city  ordinance  of  1889,  passed  by  the  city  coun- 
cil of  the  City  of  Chicago  is  restricted  to  the  city  limits 
of  the  City  of  Chicago,  and  therefore  has  no  applica- 


407 

tion  to  the  Town  of  Pullman.  The  limitations  as  to 
rates  imposed  by  that  ordinance  therefore  cannot 
avail  telephone  subscribers  located  in  Pullman. 

The  telephone  company  is  a  public  service  corpora- 
tion. It  is  its  legal  duty  to  treat  alike  all  its  patrons 
who  are  similarly  situated.  It  cannot  give  a  special 
privilege  or  a  special  rate  to  one  subscriber  and  deny 
it  to  another  in  a  similar  situation.  If,  therefore,  the 
company  is  guilty  of  unjust  discrimination  it  can,  in 
a  proper  proceeding  be  made  to  furnish  service  at  the 
lowest  rate  at  which  it  is  furnishing  such  service  to 
other  subscribers  similarly  situated. 

The  legislature  has  the  power  to  reasonably  regu- 
late the  charges  which  the  Chicago  Telephone  Com- 
pany may  make  for  telephone  service.  This  power 
has  never  been  exercised  by  the  legislature  of  Illinois. 
In  view  of  the  fact  that  many  of  the  members  of  the 
association  live  beyond  the  limits  of  this  city,  within 
which  the  existing  ordinance  regulates  the  rates,  I 
suggest  that  the  matter  ought  to  be  taken  up  for  legis- 
lative enactment. 

In  the  absence  of  any  regulation  by  the  legislature, 
or  of  a  limitation  in  an  ordinance  or  franchise,  the  only 
obligation  resting  upon  the  telephone  company  and 
other  public  service  corporations,  as  to  the  rates  which 
they  charge  for  service,  is  that  such  rate  must  be  rea- 
sonable. What  is  reasonable  is  sometimes  a  judicial, 
and  at  other  times  a  legislative  question.  Where  a 
public  service  corporation  has  performed  a  service 
and  sues  to  recover  compensation  therefor,  in  the  ab- 
sence of  an  express  contract,  the  measure  of  its  dam- 
ages is  a  reasonable  compensation  for  the  services  per- 
formed; and  whether  the  compensation  which  it  de- 
mands is  reasonable  is  a  judicial  question.  If  the 
legislature  has  fixed  the  compensation  which  a  public 
service  corporation  may  exact,  then  the  reasonable- 
ness of  the  compensation  so  fixed  is  a  judicial  ques- 
tion. But  the  power  to  determine  what  is  a  reasonable 
rate,  that  is, — the  power  to  fix  the  rate  at  which  a 
public  service  corporation  must  render  a  particular 
service,  is  a  legislative  and  not  ordinarily  a  judicial 


408 

question.  It  is  beyond  the  power  of  the  court,  there- 
fore, to  fix  in  advance  what  is  a  reasonable  rate  for 
any  particular  service.  The  province  of  the  court  is 
limited  to  the  determination  of  what  is  an  unreason- 
able rate.  No  proceedings  could,  therefore,  be  in- 
stituted to  compel  the  telephone  company  to  furnish 
service  at  a  particular  rate.  If  the  telephone  com- 
pany refuses  to  render  service  for  a  reasonable  rate, 
an  action  would  probably  lie,  or  if  the  subscriber  is 
compelled  to  pay  an  unreasonable  or  an  exorbitant 
rate  and  he  pays  the  same  in  such  a  way  as  to  show 
it  is  paid  under  duress  or  under  protest  and  he  can- 
not obtain  service  in  any  other  way,  I  am  inclined  to 
the  opinion  that  the  subscriber  would  have  the  right 
to  recover  back  the  amount  in  excess  of  a  reasonable 
rate  in  a  proper  proceeding. 

The  question  of  what  is  an  unreasonable  rate  de- 
pends upon  the  consideration  of  many  facts  and  cir- 
cumstances. As  the  court  observed  in  Killmer  v.  R. 
R.  Co.,  100  N.  Y.,  395,  402 : 

"What  is  a  reasonable  sum  for  transportation 
of  goods  on  the  great  railroad  lines  of  the  country 
in  a  given  case  is  often  a  complex  question,  into 
which  enters  many  elements  and  considerations, 
and  is  incapable  of  exact  solution. ' ' 
There    are    no    proceedings    pending   at    this    time 
which  involve  any  question  as  to  the  reasonableness 
of  rates. 

See  the  following  authorities : 

Nebraska  Telephone  Co.  v.  State,  55  Neb., 
627;  s.  c.,  45  L.  E.  A.,  113,  and  cases  cited. 
Munn  v.  Illinois,  94  U.  S.,  113. 
Railroad  Commission  Cases,  116  U.  S.,  307. 
C.,  M.  &  St.  P.  Ry.  Co.  v.  Minnesota,  134  U. 

S.,  418. 
Ruggles  v.  Illinois,  108  U.  S.,  526,  531. 


409 


WHETHER       LABOR       AND  LABOR  UNIONS   ARE   WITHIN   THE 
PROVISIONS  OF  THE  ILLINOIS  ANTI-TRUST  LAW. 

(Heath  &  Milligan  Mfg.  Co.,  May  24,  1904.) 
"We  have  before  us  the  reply  of  Mr.  Levy 
Mayer  concerning  our  inquiry  regarding  the  status 
of  the  Anti-Trust  Law  of  the  State  of  Illinois.  Mr. 
Mayer  has  made  it  very  plain  and  we  are  glad  to 
see  that  our  interpretation  of  the  law  as  repre- 
sented in  our  letter  to  you  dated  April  1st  last, 
is  correct.  We  note  that  Mr.  Mayer,  in  referring 
to  labor  unions,  etc.,  says  he  is  in  grave  doubt  as 
to  whether  labor  could  be  considered  'An  article 
of  merchandise  or  commodity.'  Suggestion: 

Suppose  A  owes  B  a  note  amounting  to  $10.00. 
A  says  B  'I  have  not  the  money  to  pay  you, 
but  I  will  work  for  you  for  five  days.'  In  othej 
words,  A  agrees  to  exchange  five  days'  work  for 
the  note  held  by  B. 

To  carry  this  hypothesis  of  reasoning  still  fur- 
ther, allowing  that  money  is  a  commodity,  and  the 
note  represents  money,  suppose  A  says  to  B,  'I 
will  exchange  my  labor  for  your  cash  money  at 
the  rate  of  $2.00  per  day';  is  not  the  labor,  which 
represents  A's  stock  in  trade,  as  much  of  a  com- 
modity as  B's  cash  money,  or  potatoes,  or  any 
.other  commodity,  which  is  offered  in  exchange  by 
B  for  the  labor  of  A!" 

That  a  labor  union,  like  any  other  group  of  persons, 
may  be  guilty  of  conspiracy  in  restraint  of  trade  is 
a  settled  proposition. 

Prentiss  &  Egan  on  the  Commerce  Clause,  p.  323, 
citing : 

U.  8.  v.  Patterson,  55  Fed.,  605. 

U.  S.  v.  Workingmen's  Council,  54  Fed.,  994, 

1000. 

U.  S.  v.  Elliott,  62nd  Fed.,  801. 
U.  S.  v.  Debs,  64  Fed.,  724. 

In  Curran  v.  Galen,  152  N.  Y.,  33,  the  court  said: 
"In  the  general  consideration  of  the  subject,  it 


410 

must  be  premised  that  the  organization  or  the  co- 
operation of  workingmen  is  not  against  any  public 
policy.    Indeed,  it  must  be  regarded  as  having  the 
sanction  of  the  law  when  it  is  for  such  legitimate 
purposes  as  that  of  obtaining  an  advance  in  the 
rate  of  wages,  or  of  maintaining  such  rate.  *  *  * 
But  the  social  principle  which  justifies  such  or- 
ganizations is  departed  from  when  they  are  so 
extended  in  their  operation  as  either  to  intend, 
or  to  accomplish,  injury  to  others.  *       *  The  ef- 
fectuation of  such  a  purpose  (the  coercion  of  other 
workmen)    would   conflict   with   the   principle   of 
public  policy  which  prohibits  monopolies  and  ex- 
clusive privileges.    It  would  tend  to  deprive  the 
public  of  the  services  of  men  in  useful  employ- 
ments and  capacities.     It  would,  to  use  the  lan- 
guage of  Mr.  Justice  Barrett  in  People  ex  rel.  Gill 
v.  Smith  (5  N.  Y.  Cr.  K.,  513)  'impoverish  and 
crush  a  citizen  for  no  reason  connected  in  the 
slightest  degree  with  the  advancement  of  wages 
or  the  maintenance  of  the  rate. '  ' ' 
The  question  submitted  is  not  the  economic  or  legal 
one,  as  to  whether  labor  is  property.    The  Supreme 
Court  of  Illinois  in  Ritchie  v.  People,  155  111.,  98,  has 
decisively  held  that  labor  is  property.    The  query  un- 
der consideration  is  whether  labor  is  an  "article  of 
merchandise  or  commodity"  within  the  words  of  the 
Illinois  Anti-Trust  Law,  whether  labor  is  something 
that  can  be  engrossed,  monopolized  or  made  the  sub- 
ject of  a  trust,  pool  or  corner  within  the  intent  of  the 
Anti-Trust  Statute,  which,  being  of  a  criminal  char- 
acter, must  be  strictly  construed.     Although  labor  is 
indispensable  to  production,  I  am  inclined  to  the  opin- 
ion that  it  does  not  come  within  the  designation  of  the 
Statute  'any  article,  commodity,  or  merchandise  to  be 
manufactured,  mined,  produced  or  sold  in  this  state." 
Labor  is  not  an  article  of  "merchandise"  nor  is  it 
a  "commodity,"  within  the  meaning  of  the  existing 
Anti-Trust  Statute  of  Illinois,  in  my  opinion.     It  is 
not  material,  portable,  tangible  nor  the  subject  of  bar- 
ter and  sale.    We  may  speak  figuratively  of  the  price 


411 

of  labor  as  we  speak  figuratively  of  selling  insurance. 
The  courts  have  had  occasion  to  pass  upon  the  question 
of  whether  insurance  is  a  commodity  within  the  mean- 
ing of  similar  statutes.  The  Iowa  Supreme  Court  in 
Beechley  v.  Mulville,  70  N.  W.  Rep.,  107,  held  that 
insurance  is  a  commodity.  The  Texas  Supreme  Court 
in  Queens  Ins.  Co.  v.  State,  22  L.  R.  A.,  483,  held  that 
it  is  not. 

In  Cleland  v.  Anderson  (Neb.),  92  N.  W.,  306,  the 
court  passed  upon  the  labor  exemption  clause  of  the 
Nebraska  Anti-Trust  Law,  as  affecting  the  validity 
of  that  law.  Sec.  9  of  that  act  expressly  excepts  or- 
ganizations of  laboring  men  for  the  purpose  of  rais- 
ing wages,  from  its  operation  and  it  was  contended  that 
special  privileges  and  immunities  are  granted  laborers 
contrary  to  Sec.  15,  Art.  3,  of  the  State  Constitution. 
An  Illinois  Anti-Trust  Statute,  which  exempted  from 
its  operations  "agricultural  products  and  live  stock 
while  in  the  hands  of  the  producer  or  raiser"  has  been 
held  unconstitutional  by  the  U.  S.  Supreme  Court  in 
Connolly  v.  Sewer  Pipe  Co.,  184  U.  S.,  540.  The  Ne- 
braska Supreme  Court  said,  p.  308 : 

"In  its  letter  and  in  its  spirit,  it  refers  only  to 
combinations  and  conspiracies  of  persons  engaged 
in  the  manufacture,  sale  and  transportation  of 
goods,  wares,  and  merchandise  to  prevent  or  hin- 
der competition,  and  to  regulate  and  control  prices. 
No  express  exception  of  organizations  of  laborers 
intended  to  maintain  or  advance  wages,  was  nec- 
essary to  exempt  them  from  its  operation.  The 
section  in  question  is  inserted  rather,  out  of  abun- 
dance of  caution,  to  prevent  judicial  extension  of 
the  terms  of  the  act  beyond  its  scope  and  purpose, 
than  to  grant  a  privilege  or  immunity  to  persons 
who  would  otherwise  fall  within  its  terms.  The 
distinction  between  goods  and  merchandise  pro- 
duced by  skill  and  labor  and  the  skill  and  the  labor 
which  produced  them  is  manifest  and  reasonable. 
The  statute  does  not  say  that  laborers  who  have 
goods,  wares  or  merchandise,  the  product  of  labor, 
for  sale,  may  combine  to  advance  or  control  the 


412 

price,  but  only  that  the  law  designed  to  prevent 
the  combination  in  restraint  of  trade  in  such  arti- 
cles when  produced,  shall  not  be  construed  to 
affect  organizations  formed  to  regulate  the  wages 
or  compensation  of  the  labor  and  skill  which  pro- 
duced them.  This  distinction  is  suggested  in 
Downing  v.  Lewis,  56  Neb.,  386,  389,  76  N.  W., 
900;  in  that  case  it  was  held  that  a  laundry  was 
not  within  the  purview  of  the  statute  under  con- 
sideration. It  is  pointed  out  very  abruptly  that 
the  business  of  a  laundry  is  l  to  make  clothes  clean, 
rather  than  to  make  clean  clothes. '  In  other  words, 
it  sells  no  goods  or  wares.  It  merely  bestows  labor 
and  skill  upon  them.  The  purpose  of  the  statute 
as  stated  in  that  case  is  '  to  prevent  manufacturers 
and  dealers  in  articles  of  commerce  from  combin- 
ing for  the  purpose  of  lessening  competition,  regu- 
lating production,  and  increasing  profits.'  Labor 
and  skill  are  not  articles  of  commerce,  at  least  in 
the  same  sense  as  the  articles  thereby  produced; 
and  we  think  the  classification  which  distinguishes 
them  and  provides  for  a  diversity  of  legislation 
with  respect  to  them  is  reasonable  and  proper." 
In  State  v.  Henke,  19  Mo.,  225,  226,  defendants  were 
indicted  for  hiring  a  slave  to  drive  rail  spikes  with  a 
spike  maul  and  without  the  consent  of  the  owner.  The 
indictment  was  brought  under  the  following  section  of 
An  Act  Concerning  "Slaves": 

"Any  person  who  shall  buy  of,  sell  to  or  re- 
ceive from  any  slave,  any  commodity  whatsoever 
without  the  consent  in  writing  of  the  master, 
owner,  or  overseer  of  such  slave  first  had  and 
obtained,  or  who  shall  deal  with  any  slave  without 
such  consent,  shall  forfeit  to  the  master,  owner 
or  overseer  of  such  slave,  four  times  the  value 
of  the  commodity  so  bought,  sold  or  received,  to 
be  recovered  by  action  of  debt  with  costs,  and  shall 
also  forfeit  to  the  county  in  which  the  offense  was 
committed,  twenty  dollars,  to  be  recovered  by  in- 
dictment. ' ' 


413 

The  court  in  ruling  that  the  indictment  had  been 
properly  quashed  in  the  court  below,  said : 

"  'The  mauling  of  rails'  charged  therein,  is  not 
the  commodity  contemplated  by  the  legislature, 
nor  is  it  embraced  by  the  statute.  The  staute  was 
obviously  designed  to  prevent  slaves  from  trading, 
selling,  or  dealing  in  any  commodity  (that  is,  any- 
thing movable  that  is  bought  and  sold)  with  a 
person,  without  the  master's  permission  or  that 
of  the  owner  or  overseer.  It  does  not  include  the 
manual  labor  of  the  slave,  however  wrong  it  may 
be  to  hire  or  to  induce  a  slave  to  work  or  labor  for 
a  person  without  the  master  or  owner's  knowledge 
and  permission." 

As  I  have  said,  the  Illinois  Anti-Trust  Statute  is 
penal  and  must  be  strictly  construed. 

In  the  Century  Dictionary,  commodity  is  defined  as 
(1)  accommodation,  convenience,  suitableness,  com- 
modiousness;  (2)  profit,  advantage,  interest;  (3)  that 
which  is  useful,  anything  that  is  useful,  convenient  or 
serviceable,  particularly  an  article  of  merchandise, 
anything  movable  that  is  a  subject  of  trade  or  of 
acquisition. 

"The  word  is  ordinarily  employed  in  the  com- 
mercial sense  of  any  movable  or  tangible  thing  that 
is  produced  or  used  as  the  subject  of  barter  and 
sale." 

Vol.  6,  Ency.  of  Law,  p.  230. 

There  is  nothing  in  the  context  of  the  statute  requir- 
ing a  departure  from  the  rule  of  statutory  construction 
that  common  or  popular  words  are  to  be  understood 
in  their  ordinary  sense.  The  hypothesis  propounded 
by  the  Heath  &  Milligan  Mfg.  Co.  may  be  reduced  to 
the  following  syllogistic  form:  Commodities  have 
utility  and  value  and  are  exchangeable ;  labor  has  util- 
ity and  value  and  is  exchangeable;  therefore  labor  is 
a  commodity.  The  syllogism  is  obviously  defective  in 
that  it  assumes  from  the  existence  of  particular  quali- 
ties, the  existence  of  general  qualities  of  essence  and 
identity.  The  contract  of  sale  is  distinct  from  the  con- 
tract of  service. 


414 

I  do  not  pass  upon  the  question  of  whether  the  leg- 
islature could  under  the  police  power  make  wages  the 
subject  of  an  Anti-Trust  Law.  It  suffices  to  say  that 
in  my  opinion  " labor"  is  not  within  the  provisions  of 
the  present  Illinois  Anti-Trust  Law. 

WHAT   CONSTITUTES   A  VALID   TEADE-MARK. 

(Barrett  Mfg.  Company,  June  20,  1904.) 
' '  Our  trade-mark  is  a  black  diamond  bearing  the 
initial  'B'  in  white  thereon  (proof  attached).  We 
claim  that  years  of  continuous  use  have  fully  es- 
tablished our  exclusive  right  to  the  design  in  our 
particular  line,  and  further,  that  the  use  of  a  black 
(diamond)  with  different  initials  or  a  monogram 
thereon,  if  applied  to  similar  products,  is  an  in- 
fringement, against  which  we  have  valid  reason 
to  protest.    We  would  appreciate  your  opinion. ' ' 
The  subject  of  trade-marks  in  general  is  covered  in 
my  opinion  to  the  association  under  date  of  March  11, 
1904,  in  answer  to  the  query  of  J.  E.  Tilt  Shoe  Com- 
pany. 

A  trade-mark  is  a  distinctive  name,  word,  mark,  em- 
blem, design,  symbol  or  device,  used  in  lawful  com- 
merce to  indicate,  or  authenticate,  the  source  from 
which  has  come,  or  through  which  has  passed,  the  arti- 
cle upon  which  it  is  affixed. 

Hopkins   on   Unfair   Trade,  p   3,   and   cases 

cited. 

As  a  general  rule,  letters  or  numbers  are  not  valid  as 
technical  trade-marks  or  trade-names,  although  the 
question  is  not  entirely  free  from  doubt.  Letters  or 
numerals  may,  however,  form  a  part  of  a  trade-mark, 
in  combination  or  collection  with  words,  figures  or  de- 
signs. They  will  be  protected  also  when  they  are  used 
in  an  arbitrary  and  distinctive  manner. 

Hopkins  on  Unfair  Trade,  p  203,  and  cases 

cited. 

Proof  of  fraudulent  intentor  knowledge  that  the  de- 
vices or  symbols  were  the  property  of  another  is  im- 
material in  the  case  of  a  technical  trade-mark. 


415 

Whether  or  not  a  trade-mark  is  infringed  upon  can 
only  be  determined  by  a  comparison  with  the  mark 
which  is  claimed  to  be  an  infringement.  A  resemblance 
to  a  particular  trade-mark  creates  a  presumption  of 
fraud.  The  trade-mark  of  the  Barrett  Company,  here 
under  consideration,  is,  in  my  opinion,  a  valid  trade- 
mark. It  does  not  follow,  however,  as  assumed  by  the 
company,  that  "the  use  of  a  black  (diamond)  with  dif- 
ferent initials  or  a  monogram  thereon"  constitutes  an 
infringement.  This  can  only  be  determined  by  com- 
parison, as  above  stated,  and  by  a  knowledge  of  all  of 
the  facts  and  circumstances  showing  the  ownership 
and  methods  adopted  by  the  parties  in  question. 

There  is,  however,  another  ground  upon  which  the 
courts  interfere,  and  that  is  known  as  "unfair  trade." 
This  interference  does  not  depend  upon  the  existence 
of  a  technical  trade-mark,  but  is  supported  mainly  to 
prevent  frauds  upon  the  public  by  unfair  competition. 
If  the  use  of  any  words,  letters,  numerals  or  symbols  is 
adopted  for  the  purpose  of  defrauding  the  public,  the 
courts  will  interfere  to  protect  the  public  from  such 
fraudulent  intent,  even  though  the  person  asking  the 
intervention  of  the  court  may  not  have  the  exclusive 
right  to  these  words  or  symbols. 

While  fraud  is  presumed  from  the  wrongful  use  of 
a  technical  trade-mark,  yet  in  cases  of  unfair  trade, 
which  do  not  involve  a  technical  trade-mark,  it  must  be 
proven  directly  or  by  inference. 

VALIDITY  OF  CREDIT  INSURANCE  POLICIES  UNDER   THE  LAW 

OF  ILLINOIS. 

(John  E.  Burns  Lumber  Co.,  June  20,  1904.) 

"We  enclose  herewith  indemnity  bond  of  the 
American  Credit  Indemnity  Co.  of  New  York.  We 
have  been  using  this  kind  of  insurance  for  the  past 
three  or  four  years,  and  as  our  present  bond  will 
expire  about  September  1st,  we  would  like  to  have 
your  attorney's  opinion  as  to  whether  this  bond 
gives  us  the  protection  that  the  company  who 
writes  it  represents  that  it  does." 


416 

I  have  examined  the  policy  in  question.  If  all  of  its 
terms  and  conditions  are  complied  ivith  by  the  insured, 
it  is  a  valid  policy  and  will  protect  the  lumber  company 
against  such  loss  as  falls  with  in  the  provisions  and 
scope  of  the  policy.  Care  must  be  taken  by  the  assured 
to  comply  with  the  terms  of  the  policy. 

The  court,  in  Chakman  v.  U.  S.  Credit  System  Co., 
92  Wis.,  374,  in  passing  upon  the  validity  of  this  char- 
acter of  policy,  said : 

' '  The  peril  of  loss  by  the  insolvency  of  customers 
is  just  as  definite  and  real  a  peril  to  a  merchant 
or  manufacturer  as  the  peril  of  loss  by  accident, 
fire,  lightning,  or  tornado,  and  is,  in  fact,  much 
more  frequent.  No  reason  is  perceived  why  a 
contract  of  indemnification  against  this  ever- 
present  peril  is  not  just  as  legitimately  a  contract 
of  insurance  as  a  contract  which  indemnifies 
against  the  more  familiar,  but  less  frequent,  peril 
by  fire." 

There  is  no  public  policy  or  law  in  Illinois  which 
affects  the  validity  of  this  contract.  It  is  entirely  impos- 
sible to  anticipate  every  dispute  or  controversy  which 
may  arise  in  the  future  in  construing  these  policies 
with  reference  to  particular  facts  or  circumstances. 
Such  questions  must  be  decided  as  they  arise,  and  of 
course  I  can  give  only  a  general  opinion.  The  policy 
is  like  any  other  policy  of  insurance  and  is  governed 
by  the  same  legal  rules.  If  the  terms  of  the  policy  are 
ambiguous,  they  must  be  construed  most  strongly 
against  the  insurance  company. 

American  Surety  Co.  v.  Pauly,  170  U.  S.,  133. 

NECESSITY  OF  A  CORPORATION  MAKING  AN  ANNUAL  REPORT 
TO  THE  SECRETARY  OF  STATE  UNDER  THE  ILLINOIS  LAW 
OF  MAY  10,  1901,  AND  EFFECT  OF  FAILURE  TO  MAKE  SUCH 
REPORT. 

(American  Strawboard  Co.,  June  20,  1904.) 
Inquiry  is  made  as  to  whether  it  is  necessary  for  cor- 
porations to  make  an  annual  report  to  the  secretary  of 
state,  as  required  by  tlie  Act  of  May  10,  1901. 


417 

In  People  v.  Rose,  207  111.,  352,  the  Supreme  Court 
of  Illinois  held  the  act  in  question  to  be  constitutional. 
The  court  decided,  however,  that  the  cancellation  of 
the  charter  of  the  corporation,  which  the  secretary  of 
state  is  required  to  make  upon  his  records  in  case  of 
the  failure  of  the  corporation  to  make  an  annual  report, 
does  not,  of  itself,  work  a  forfeiture  of  the  company's 
charter,  but  is  simply  prima  facie  evidence  of  non-user 
which  may  be  availed  of  by  the  state  in  a  proceeding 
to  forfeit  the  charter.  The  corporation  could,  however, 
in  my  opinion,  defeat  such  a  proceeding  by  the  state  by 
showing  that  it  is  in  fact  engaged  in  active  business,  as 
a  corporation,  under  its  charter,  even  though  it  failed 
to  file  the  report  in  question. 

RIGHT  OF  THE  CITY  OF  CHICAGO  TO  COMPEL  A  MANUFAC- 
TURER TO  CHANGE  HIS  STEAM  BOILERS  TO  COMPLY  WITH 
CERTAIN  RULINGS  OF  THE  BOARD  OF  INSPECTORS  OF  STEAM 
BOILERS. 

(111.  Mfrs.  Assn.  and  Illinois  Maintenance  Co.,  Aug. 

1,  1904.) 

I  have  your  favor  requesting  an  opinion  as  to 
whether  the  city  has  the  right  to  compel  a  manufac- 
turer to  change  his  boiler  to  comply  with  the  following 
ruling  of  the  board  of  inspectors  of  steam  boilers  and 
steam  plants : 

"On  last  October  this  board  made  a  rule  that 

the  size  of  blow-off  pipes  for  horizontal  tubular 

boilers   must   not  be   less   than   the   sizes   given 

below. 

30-in.  diameter  not  less  than  2-in.  blow-off. 

36-in.  diameter  not  less  than  3-in.  blow-off. 

42-in.  diameter  not  less  than  3-in.  blow-off. 

48-in.  diameter  not  less  than  3-in.  blow-off. 

54-in.  diameter  not  less  than  4-in.  blow-off. 

60-in.  diameter  not  less  than  4-in.  blow-off. 

66-in.  diameter  not  less  than  4-in.  blow-off. 

72-in.  diameter  not  less  than  4-in.  blow-off. 
I  have  also  your  enclosure  from  the  Illinois  Main- 
tenance Co.  as  follows : 


418 

' '  Will  you  not  kindly  advise  us  whether  there  is 
an  ordinance  in  effect  in  the  City  of  Chicago 
requiring  each  boiler  room  to  have  two  exits  to  the 
street  ?  If  not,  then  what  ordinance  there  may  be 
bearing  on  the  matter  ? ' ' 

The  city  has  the  power  to  regulate  this  subject- 
matter  by  virtue  of  clauses  63  to  67  of  Sec.  1  of  Art.  V 
of  the  General  Act  for  the  Incorporation  of  Cities  and 
Villages. 

Clause  63  provides  that  the  city  council  shall  have 
power : 

"To  prevent  the  dangerous  construction  and 
condition  of  chimneys,  fire  places,  hearths,  stoves, 
stove  pipes,  ovens,  boilers  and  apparatus  used  in 
and  about  any  building  and  manufactory,  and  to 
cause  to  be  removed  or  placed  in  a  safe  condition 
when  considered  dangerous ;  to  regulate  and  pre- 
vent the  carrying  on  of  manufactories  dangerous 
in  causing  and  promoting  fires;  to  prevent  the 
deposit  of  ashes  in  unsafe  places,  and  to  cause  all 
such  buildings  and  enclosures  as  may  be  in  a 
dangerous  state  to  be  put  in  a  safe  condition. ' ' 
Clause  67  gives  the  city  council  power  "To  pro- 
vide for  the  inspection  of  steam  boilers." 

The  board  of  inspectors  of  steam  boilers  and  steam 
plants  was  created  by  ordinance  of  March  23,  1903,  in 
effect  May  1st,  1903.  This  ordinance  and  the  amend- 
ment thereto  contain  all  the  provisions  on  the  subject. 
The  board  has  undoubtedly  reasonable  discretion  to 
make  general  rules  not  inconsistent  with  the  ordinance 
and  under  it  to  make  special  rulings  in  particular 
cases. 

The  ruling  as  to  sizes  of  blow-off  valves  if  reasonable 
(and  I  presume  the  sizes  given  to  be  reasonable)  is 
valid  and  can  be  enforced  against  existing  plants  as 
well  as  in  the  case  of  new  installations.  There  is  no 
ordinance  specifying  that  each  boiler  room  shall  have 
two  exits  to  the  street,  nor  is  there  any  rule  of  either 
the  building  department  or  the  department  of  inspec- 
tion of  steam  boilers  and  steam  plants,  to  that  effect. 
The  latter  department  in  the  exercise  of  its  reasonable 


419 

discretion  may  require  suitable  means  of  egress  from 
a  boiler  room.  The  bursting  of  a  steam  pipe  might 
very  readily  be  the  cause  of  a  man  being  scalded  to 
death  where  there  is  only  one  exit.  In  such  boiler 
rooms  sufficient  means  of  egress  have  been  required 
by  the  board  in  several  instances.  The  courts  will 
not  interfere  with  the  reasonable  discretion  of  such 
boards. 


WHETHER  A  CARRIER  CAN  LIMIT  A  JOINT   RATE  TO  A  GIVEN 
CONNECTING  LINE 

(Illinois  Mfrs.  Assn.,  August  9,  1904.) 
"I  would  like  to  submit  the  following  proposi- 
tion for  your  consideration  and  opinion: 

The  L.  S.  &  M.  S.  published  a  tariff  naming 
rates  from  various  points  on  that  road  to  various 
points  on  other  roads  east  of  the  Mississippi  River. 
Practically  all  of  the  roads  into  the  territory  are 
shown  as  parties  to  this  tariff  and  I  understand 
the  tariff  has  been  approved  for  use  of  all  the 
roads.  There  is  nothing  in  the  tariff  which  gives 
any  routing  or  specifies  that  the  rate  between  any 
two  points  is  or  is  not  good  via  any  line. 

Have  the  Lake  Shore  and  its  connections  any 
right  to  say  that,  as  an  illustration,  the  rate  from 
Grand  Rapids,  Mich.,  to  Pittsburg,  Pa.,  is  good 
joint  between  the  Lake  Shore  and  B.  &  0.,  but  it 
is  not  good  joint  between  the  Lake  Shore  and  Penn- 
sylvania Roads,  although  the  Pennsylvania  is  a 
party  to  this  tariff  and  has  properly  stamped  the 
tariff  as  being  good  via  that  line ;  or  is  it  legal  and 
proper  for  us  to  claim  the  rate  is  good  via  all  lines 
party  to  the  tariff  and  reaching  the  destination  in 
question,  unless  the  tariff  specifically  excepts  cer- 
tain roads  and  routes'?" 

I  have  not  before  me  the  tariff  in  question,  nor  am  I 
familiar  with  the  various  contracts  and  arrangements 
which  the  L.  S.  &  M.  S.  R.  R.  has  doubtless  filed  with 
the  Interstate  Commerce  Commission,  as  required  by 


420 

law.  The  question,  as  I  understand  it,  is  whether, an 
initial  carrier  who  has  established  a  through  rate  from 
a  point  on  its  own  line,  which  latter  point  is  reached 
by  several  railroads  connecting  with  the  lines  of  the 
initial  carrier,  can  limit  that  through  rate  to  ship- 
ments over  lines  of  only  one  of  the  connecting  car- 
riers. 

Section  3  of  the  Interstate  Commerce  Act  provides 
as  follows: 

"Every  common  carrier  subject  to  the  provisions 
of  this  act  shall,  according  to  their  respective  pow- 
ers, afford  all  reasonable,  proper  and  equal  facili- 
ties for  the  interchange  of  traffic  between  their  re- 
spective lines,  and  for  the  receiving,  forwarding 
and  delivering  of  passengers  and  property  to  and 
from  their  several  lines  and  those  connecting 
therewith,  and  shall  not  discriminate  in  their  rates 
and  charges  between  such  connecting  lines,  but 
this  shall  not  be  construed  as  requiring  any  such 
common  carrier  to  give  the  use  of  its  tracks  or 
terminal  facilities  to  another  carrier  engaged  in 
like  business." 
Section  6,  as  amended,  provides: 

' '  Every  such  common  carrier,  shall  also  file  with 
said  Commission  copies  of  all  contracts,  agree- 
ments or  arrangements  with  other  common  car- 
riers in  relation  to  any  traffic  affected  by  the  pro- 
visions of  this  act  to  which  it  may  be  a  party.  And 
in  cases  where  passengers  and  freight  pass  over 
continuous  lines  or  routes  operated  by  more  than 
one  common  carrier  and  the  several  common  car- 
riers operating  such  lines  or  routes  established 
joint  tariffs  or  rates  or  fares  or  charges  for  such 
continuous  lines  or  routes  copies  of  such  joint  tar- 
iffs shall  also,  in  like  manner,  be  filed  with  said 
Commission." 
Section  6  also  provides: 

"It  shall  be  unlawful  for  any  common  carrier, 
party  to  any  joint  tariff,  to  charge,  demand,  collect 
or  receive  from  any  person  or  persons  a  greater 
or  less  compensation  for  the  transportation  of  per- 


421 

sons  or  property,  or  for  any  services  in  connection 
therewith,  between  any  points  as  to  which  a  joint 
rate,  fare,  or  charge  is  named  thereon  than  is 
specified  in  the  schedule  filed  with  the  Commission 
in  force  at  the  time." 

At  common  law  a  common  carrier  is  not  bound  to 
carry  beyond  its  own  line.  If  it  contracts  to  go  be- 
yond, it  may  determine  for  itself  what  agencies  it  will 
employ,  and  its  contract  is  equivalent  to  an  extension 
of  its  line  for  the  purpose  of  the  contract.  And  if  it 
holds  itself  out  as  a  carrier  beyond  its  line,  so  that  it 
may  be  required  to  carry  that  way  for  all  alike,  it  may 
nevertheless  confine  its  carrying  to  the  particular 
route  which  it  chooses  to  use.  It  puts  itself  in  no  worse 
condition  by  extending  its  route  with  the  help  of  others 
than  it  would  occupy  if  the  means  of  transportation 
employed  were  all  its  own.  It  may  select  its  own  agen- 
cies and  its  own  associates  for  doing  the  work. 

If  an  interstate  carrier  enters  into  an  arrangement 
with  any  connecting  carrier  for  through  billing,  rating 
and  loading  and  for  the  use  of  its  tracks  and  terminals, 
it  is  not  obliged  to  make  the  same  arrangements  with 
other  connecting  carriers  even  though  the  physical 
facilities  for  an  interchange  of  traffic  are  the  same. 
While  the  Interstate  Commerce  Act  was  apparently 
designed  to  require  connecting  carriers  to  join  in  the 
formation  of  through  rates  at  lower  aggregate  rates 
than  a  combination  of  locals,  the  machinery  necessary 
to  accomplish  that  purpose  was  not  provided,  and  no 
tribunal  has  any  power  to  effect  that  result. 

I  am  therefore  of  the  opinion  that  the  carrier  cannot 
be  compelled  to  apply  the  through  rates  to  all  con- 
necting lines,  but  it  can  restrict  such  rates  and  ship- 
ments thereunder  to  such  lines  as  it  sees  fit  to  enter 
into  arrangements  with. 

Gulf,  etc.,  R.  Co.  v.  Miami  S.  S.  Co.,  86  Fed., 

407. 
Int.  Commerce  Comm.  v.  Western,  etc.,  R.  Co., 

83  Fed.,  83. 

N.  Y.,  etc.,  R.  R.  Co.  v.  Platt,  7  Int.  Com.  Rep., 
323. 


422 

Little,  E.,  etc.,  R.  Co.  v.  St.  L.,  etc.,  R.  Co., 

63  Fed.,  775. 
17  Ency.  of  Law  (2d  Ed.),  p.  127. 


NOTE: — See  the  later  opinions  of  March  17,  1905,  for  the  Manierre- 
Yoe  Syrup  Co.  and  of  April  20,  1907,  for  Wilson's  Interest;  and  also 
the  case  of  Central  Stock  Yards  Co.  v.  L.  $  N.  By.  Co.,  192  U.  S.,  568 
(1904).  The  Interstate  Commerce  Act  as  amended  in  1906  gives  the 
Commission  power  to  prescribe  through  routes  and  rates. — Ed. 


THE  VALIDITY  OF  THE  CLAUSE  IN  A  BILL  OF  LADING  IMPOS- 
ING A  PENALTY  FOE  OVERLOADING  CABS. 

(The  S.  P.  Shotter  Company,  August  9,  1904.) 
My  opinion  is  requested  on  the  validity  of  a  condi- 
tion in  a  bill  of  lading,  imposing  a  penalty  for  over- 
loading cars.     The  condition  is  as  follows: 

"2.     Cars  overloaded  more  tnan  ten  per  cent, 
above  their  marked  capacity  will  be  subjected  to  a 
penalty  of  one  and  one-half  rates  to  be  charged 
on  all  weight  in  excess  of  marked  capacity  of  car. 
In  addition  the  expense  of  transferring  the  load 
will  be  charged  against  the  shipment." 
The  shipment  originated  and  the  bill  of  lading  was 
issued  at  a  point  in  Mississippi.     It  is,  therefore,  a 
Mississippi  contract.    To  bind  the  consignee  the  condi- 
tion must  have  been  assented  to. 

In  Southern  Express  Co.  v.  Moon,  39  Miss.,  822,  at 
p.  832,  the  Mississippi  High  Court  of  Errors  and  Ap- 
peals said : 

"The  public  policy  on  which  the  extraordinary 
liability  of  common  carriers  is  founded  is  too  im- 
portant to  be  thus  virtually  repealed  by  the  fraud 
and  circumvention  of  artfully  contrived  printed 
or  prepared  receipts  thrust  upon  those  to  whom 
the  hurry  and  press  of  railroad  travel  denies  the 
time  of  examination,  or  the  opportunity  of  fair  as- 
sent. ' ' 

If  the  provision  in  the  bill  of  lading  was  assented  to 
by  the  consignee,  either  personally  or  by  his  agent,  it 
constituted  an  agreement,  the  validity  of  which  remains 
to  be  determined  from  other  considerations  than  those 


423 

involving  the  assent  of  the  shipper.    If  it  was  not  as- 
sented to,  of  course,  it  is  not  binding. 

Where  the  damage  is  not  readily  ascertainable,  the 
parties  may  agree  upon  any  sum  as  compensation  for 
the  breach  of  the  contract,  but  the  sum  agreed  upon 
must  not  manifestly  exceed  the  amount  of  the  damage 
suffered.  Such  agreed  sum  is  "liquidated  damages." 
But  when  the  sum  agreed  upon  is  manifestly  greater 
than  the  actual  damages,  and  the  damages  are  such  as 
can  be  readily  shown,  such  sum  so  inserted  in  the  con- 
tract will  be  regarded  merely  as  a  penalty,  and  only 
the  actual  damages  can  be  recovered. 

Schofteld  v.  Tomkins,  95  111.,  190. 

Radcliff  v.  Hoar,se,  96  111.  App.,  74,  192. 

Poppers  v.  Meagher,  148  111.,  192. 

Gobble  v.  Linden,  76  111.,  157. 

Morris  v.  Tittson,  81  111.,  607. 

Reeves,  Admr.,  v.  Slipp,  91  111.,  609. 
A  penalty  is  defined  in  the  Ex.  p.  Burden,  16  Ch.  D., 
675,  as  "something  which  a  debtor  is  bound  to  pay, 
over  and  above  the  original  liability,   as   a  punish- 
ment. ' ' 

In  distinguishing  between  penalties  and  liquidated 
damages,  due  weight  is  given  to  the  words  of  the  par- 
ties, but  the  words  employed  must  yield  to  the  general 
intent.  Thus  what  were  denominated  liquidated  dam- 
ages by  the  parties  have,  in  many  instances,  been  held 
to  be  penalties,  and  the  use  of  the  word  penalty  in  the 
present  case  is  not  of  itself  conclusive.  Each  case 
must  stand  upon  its  own  facts. 

Keeble  v.  Keeble,  85  Ala.,  552. 

Jaqua  v.  Headington,  114  Ind.,  309. 

19  Ency  (2nd  Ed.),  p.  401. 

Where  there  is  no  actual  damage  sustained,  or 
claimed,  the  sum  fixed  is  a  penalty. 

McCann  v.  Albany,  11  N.  Y.  App.  Div.,  378. 
I  assume  that  no  actual  damages,  in  fact,  resulted 
to  the  car  itself  from  overloading.  Any  other  damages 
would  be  merely  nominal,  or  so  indirect  and  remote  as 
not  to  sustain  the  theory  that  the  rate  and  one-half 
penalty  is  a  liquidated  allowance  for  them.  Of  this 


424 

kind  might  possibly  be  claimed  the  increased  risk  and 
inconvenience  in  the  operation  of  trains  from  unequal 
distribution  of  train  loads ;  or,  again,  the  constant  but 
imperceptible  injury  to  the  permanent  structures  of 
the  road  (such  as  bridges,  etc.)  from  a  too  heavy  con- 
traction of  weights  on  a  given  wheel  base. 

It  is  clear,  also,  that  a  penalty  is  intended  from  a 
fixing  of  "rate  and  one-half"  which  would  be  quite 
different  in  amount  with  freight  of  different  classifica- 
tion under  the  identical  condition  of  overloading. 

Nor  can  the  penalty  be  justified  as  imposed  in  the 
interest  of  "public  safety."  The  power  of  imposing 
fines  in  this  behalf  is  competent  only  to  the  public 
authorities. 

I  am  of  the  opinion,  therefore,  that  the  charges  in 
question  constitute  a  penalty  and  cannot  legally  be  col- 
lected. 

If  the  car  at  the  time  of  loading  be  not  under  the 
carrier's  contract  or  direction  (e.  g.,  if  it  be  in  the  ship- 
per's private  yard  or  on  its  private  siding),  the  pro- 
vision that  "the  expense  of  transferring  the  load 
will  be  charged  against  the  shipment"  is  not  penal, 
and  can  doubtless  be  enforced. 


IN  -REFERENCE  TO  CLAIMS  AGAINST  A  RAILROAD   FOR  BREAK- 
AGE. 

(Monmouth  Pottery  Company,  August  9,  1904.) 

"Will  you  kindly  note  the  enclosed  letter  from 
the  agent  of  the  C.,  B.  &  Q.  By,  here,  relative  to 
the  breakage  claims  which  they  have  declined  for 
the  reason  that  we  will  not  make  an  allowance  of 
$1.00  on  each  claim  which  they  insist  on,  covering 
what  they  term  'usual  breakage.'  We  would  like 
your  counselor — Mr.  Mayer's  opinion  on  this  mat- 
ter. Our  contention,  if  we  make  this  allowance, 
is  that  we  sent  out  improperly  packed  ware,  which 
is  very  unreasonable  and  we  think  their  demand 
unjust.  They  accept  our  goods  for  original  ship- 
ment in  carloads  or  less  than  carload  lots  and  they 


425 

arrive  at  destination  very  roughly  handled  and 
then  when  claim  is  placed  covering  damages,  the 
E.  E.  Co.  makes  the  excuse  that  the  goods  were 
improperly  packed,  etc.  As  a  common  carrier, 
should  they  not  pay  all  legitimate  claims  for  break- 
age, etc.,  originating  on  their  lines'?  Of  course, 
their  legal  department  may  make  such  claims  as 
they  state,  but  are  they  not  paid  for  such  an  opin- 
ion regardless  of  the  rights  of  justness  to  ship- 
pers'? They  also  make  the  assertion  that  it  is  the 
usual  allowance  made  by  the  other  western  stone- 
ware manufacturers  and  we  have  letters  from 
these  firms  stating  that  they  make  no  such  allow- 
ance whatever. ' ' 
The  letter  of  the  railroad  company  is  as  follows : 

1 '  Eef erring  to  your  claim  as  above  numbered,  I 
regret  to  advise  that  it  has  been  decided  by  our 
legal  department  that  we  are  not  responsible  for 
the  amount  of  these  claims  covering  breakages,  as 
this  ware  was  accepted  and  forwarded  at  'Own- 
ers Eisk  Eate,'  even  besides  this  we  have  made 
you  a  very  low  rate  with  the  understanding  that 
no  claims  were  to  be  filed  for  breakages.  The 
amount  of  these  claims  more  than  cover  the 
amount  of  revenue  which  we  received.  Further- 
more we  do  not  admit  that  cars  have  been  improp- 
erly handled  which  might  have  caused  this  break- 
age, or  cracking  of  the  ware,  but  take  the  stand 
that  if  these  shipments  had  been  packed  in  the 
proper  shape,  they  should  have  gone  through  with 
but  very  little,  if  any  breakage.  However,  we  do 
not  expect  to  handle  this  commodity  without  more 
or  less  breakage,  which  amount  largely  depends 
upon  the  manner  in  which  the  cars  are  loaded.  Of 
course,  personally,  I  would  be  glad  to  reimburse 
you  for  what  losses  are  incurred  in  handling  this 
ware  while  in  transit,  also  while  in  the  hands  of 
teamsters  and  consignees,  but  we  are  compelled 
by  decision  of  our  legal  department  to  take  the 
position  as  above  stated,  without  making  any  ex- 
ceptions in  your  case.  We  have  closed  our  records 


426 

on  the  above  numbered  claims,  returning  papers 
to  our  general  office  for  file." 

The  letter  of  the  pottery  company  refers  to  an  en- 
tirely different  question  than  that  referred  to  in  the 
letter  of  the  railroad  company.  I  will  therefore  an- 
swer the  questions  raised  in  both  letters. 

The  question  raised  in  the  pottery  company's  let- 
ter is,  I  take  it,  whether  the  carrier  can  insist  on  an 
allowance  covering  what  is  termed  " usual  breakage." 
A  carrier  is  liable  at  common  law,  as  an  insurer  of  the 
goods,  for  all  loss  or  damage  not  occasioned  by  the  act 
of  God  or  the  public  enemy.  There  is  no  liability,  how- 
ever, where  the  damage  is  occasioned  by  reason  of  the 
improper  or  defective  packing  of  the  goods,  where  the 
defect  is  not  known  to  the  carrier.  If  the  improper 
condition  of  the  goods  is  apparent  or  observable  in  the 
exercise  of  reasonable  care,  then  the  carrier  should  re- 
fuse to  receive  the  goods,  and  if  it  receives  them  it  is 
liable  for  the  damage.  The  burden  of  proving  that 
the  goods  are  improperly  packed  is  on  the  carrier,  and 
in  the  absence  of  such  proof  the  carrier  is  liable.  In 
the  absence  of  a  special  agreement  I  am  of  the  opinion, 
therefore,  that  the  carrier  has  no  right  to  make  any  de- 
duction for  "usual  breakage,"  and  is  liable  for  the 
damage  sustained. 

The  letter  of  the  railroad  company,  however,  states 
that  the  goods  were  shipped  at  "Owners'  Kisk  Bate," 
with  the  understanding  that  no  claims  were  to  be  filed 
for  breakage.  I  have  not  before  me  the  bill  of  lading 
under  which  the  particular  shipment  was  made  and 
cannot,  therefore,  determine  whether  the  liability  of 
the  carrier  is  restricted  or  not. 

The  carrier  is  permitted  to  limit  its  common  law  lia- 
bility by  special  contract  where  such  restrictions  are 
expressly  or  impliedly  assented  to  by  the  shipper,  or 
his  agent,  and  there  is  a  special  consideration  for  such 
restriction — such,  for  instance,  as  a  reduced  freight 
rate.  The  shipper  must,  however,  be  given  an  oppor- 
tunity to  ship  his  goods  at  common  law  liability. 

The  authorities  upon  each  of  these  propositions  are 
referred  to,  in  my  opinion,  to  the  association  upon  the 


427 

Uniform  Bill  of  Lading  under  date  of  February  13, 
1904.  If  the  shipment  was  made  under  a  bill 
of  lading  restricting  the  liability  of  the  carrier, 
and  the  restriction  was  assented  to  by  the  shipper  and 
the  shipper  was  given  real  freedom  of  choice  between 
the  special  contract  restricting  the  liability  of  the  car- 
rier and  a  shipment  under  the  common  law  liability, 
the  carrier  is  not  liable.  If  all  of  these  conditions  are 
not  present,  the  carrier  is  liable. 

THE  LIABILITY  OF  A  CARRIER  FOB  GOODS  FROZEN  IN  TRANSIT. 

(W.  M.  Hoyt  Company,  August  9,  1904.) 
' '  On  January  23d  of  the  present  year  we  made  a 
shipment  of  goods  to  Keelfisch  &  Son,  Hartford 
City,  Ind.,  including  two  boxes  of  Navel  Oranges, 
via  Panhandle  R.  E.  Co.  This  shipment  was  ac- 
cepted by  the  E.  E.  Co.  in  good  condition  and  noth- 
ing was  said  by  the  company's  agent  regarding  the 
perishable  portion  of  the  shipment.  The  oranges 
were  frozen  en  route  and  we  are  asking  to  be  reim- 
bursed for  them.  The  E.  E.  Co.  claim  not  to  have 
refrigerator  cars  making  this  route,  and  since  they 
were  not  informed  at  the  time  of  accepting  the 
consignment  of  the  perishable  goods  disclaim  any 
liability.  It  is  our  understanding  that  a  common 
carrier  is  liable  for  all  goods  in  transit,  unless 
circumvented  by  an  act  of  God,  and  the  question  of 
having  refrigerator  cars  had  nothing  to  do  with 
the  consignor.  We  have  had  every  claim  of  this 
sort  paid  this  last  season  (about  eight  or  nine  in 
number)  and  we  do  not  feel  that  the  Panhandle 
people  are  treating  us  fairly. ' ' 

A  carrier  is  liable  at  common  law  for  all  loss  or  dam- 
age to  goods  shipped  not  caused  by  the  act  of  God  or 
the  public  enemy.  When  goods  of  a  perishable  nature 
are  injured  or  partially  destroyed  by  a  sudden  and 
unexpected  frost,  this  is  an  act  of  God  and  the  carrier 
is  not  liable. 

Vail  v.  Pacific  R.  Co.,  63  Mo.,  230. 

Wolf  v.  American  Express  Co.,  43  Mo.  423. 


428 

Sweetland  v.  Boston,  etc.,  R.  Co.,  102  Mass., 

276. 

But  in  such  a  case  it  must  appear,  in  order  to  excuse 
the  carrier,  that  the  frost  was  unexpected  and  not  to 
have  been  anticipated  by  reasonable  foresight,  and 
also  that  the  carrier  had  adopted  all  such  precautions 
as  a  man  of  ordinary  prudence  and  care  would  have 
taken  under  the  circumstances.  If  the  transportation 
is  being  carried  on  at  a  season  of  the  year  and  in  a 
locality  where  a  freezing  spell  is,  in  the  nature  of 
things  probable,  it  will  be  held  liable  for  a  loss  of 
perishable  goods  caused  by  their  being  frozen,  when 
common  prudence  would  have  required  it  to  anticipate 
such  a  cold  as  probable  and  provide  against  it  by  shel- 
tering the  goods. 

McGraw  v.  Baltimore,  etc.,  R.  Co.,  18  W.  Va., 

361. 

5  Ency.  of  Law  (2nd  Ed.),  pp.  234,  235. 
It  is  also  the  duty  of  a  carrier  to  furnish  cars  for  the 
shipper  in  all  respects  safe  and  suitable  for  the  goods 
of  the  character  of  those  to  be  transported. 

Terre  Haute,  etc.,  R.  R.  Co.  v.  Crews,  53  111. 

App.,  50. 

5  Ency.  of  Law  (2nd  Ed.),  p.  175. 
And  where  a  company  undertakes  to  carry  perish- 
able goods  it  is  bound  to  use  for  its  transportation  such 
improved  refrigerator  cars  as  are  generally  in  use  for 
protecting  such  articles.  And  when  the  company  owns 
no  such  cars  it  is  not  relieved  from  liability  on  that 
account  where  it  is  possible  to  protect  the  perishable 
goods  in  some  other  way. 

Beard  v.  I.  C.  'R.  R.  Co.,  79  la.,  518,  527. 
Chicago,  etc.,  R.  R.  Co.  v.  Davis,  159  111.,  53. 
Where  the  shipper  conceals  the  true  nature  of  the 
goods,  or  where  the  goods  are  packed  in  such  manner 
that  the  carrier  cannot  be  presumed  to  know  their 
nature,  and  the  carrier  transports  them  in  a  different 
manner  than  it  would  have  adopted  if  it  had  known  the 
true  nature  of  the  goods,  the  carrier  is  relieved  from 
liability  if  it  appears  that  the  method  of  transporta- 


429 

tion  was  a  proper  one  for  the  goods  of  the  character 
such  goods  appeared  to  be 

C.  &  A.  R.  R.  Co.  v.  Shea,  66  111.,  471. 

5  Ency.  of  Law  (2nd  Ed.),  p.  371. 
Assuming,  therefore,  that  the  character  of  the  goods 
was  apparent,  or  that  the  carrier  know  of  their  nature, 
I  am  of  the  opinion  that  the  carrier  is  liable. 


THE  CONSTITUTIONALITY  OF  THE  ILLINOIS  LAW  EEQUIEING 
THAT  EMPLOYES  SHALL  BE  ALLOWED  TIME  TO  VOTE. 

(Studebaker  Bros.  Manufacturing  Company,  August, 

9,  1904.) 

''We  would  be  very  much  pleased  to  have  a 
direct  opinion  as  to  the  constitutionality  of  the  law 
which  provides  that  there  shall  be  no  deduction 
made  from  the  employees'  wages  on  account  of  the 
absence  (from  the  services  of  employment  referred 
to  in  said  law)  of  employes  who  are  paid  by  the 
day,  week  or  month,  as  the  case  may  be.  If  con- 
stitutional, it  is  a  matter  of  regret  for  employers 
that  the  Legislature  in  its  wisdom  did  not  substi- 
tute the  entire  day  for  the  two  hours  now  pro- 
vided. ' ' 
The  statute  in  question  is  Section  25  of  the  Ballot 

Law  of  1891,  which  provides : 

"Any  person  entitled  to  vote  at  a  general  elec- 
tion in  this  State  shall,  on  the  day  of  such  election, 
be  entitled  to  absent  himself  from  any  services 
or  employment  in  which  he  is  then  engaged  or 
employed  for  a  period  of  two  hours  between  the 
time  of  opening  and  closing  of  the  polls ;  and  such 
voter  shall  not  because  of  so  absenting  himself 
be  liable  to  any  penalty,  nor  shall  any  deduction 
be  made  on  account  of  such  absence-  from  his  usual 
salary  or  wages.  Provided,  however,  that  applica- 
tion for  such  leave  of  absence  shall  be  made  prior 
to  the  day  of  election.  The  employer  may  specify 
the  hours  during  which  said  employe  may  absent 
himself  as  aforesaid.  Any  person  or  corporation 


430 

who  shall  refuse  to  an  employe  the  privilege  hereby 
conferred,  or  shall  subject  an  employe  to  a  penalty 
or  deduction  of  wages  because  of  the  exercise  of 
such  privilege,  or  who  shall,  directly  or  indirectly, 
violate  the  provisions   of  this   section,   shall  be 
deemed  guilty  of  a  misdemeanor  and  be  fined  in 
any  sum  not  less  than  five  dollars  ($5)  nor  more 
than  one  hundred  dollars  ($100)." 
Where  the  employment  is  by  the  piece,  or  by  the 
hour,  the  above  section  has  no  application.  The  statute, 
if  valid,  must  find  its  justification  under  the  police 
power  of  the  State,  vested  in  the  Legislature.      The 
nature  and  limitations  of  the  police  power  are  very 
fully  covered  in  my  opinion  to  the  association  under 
date  of  August  5,  1903,  wherein  was  discussed  the  con- 
stitutionality of  the  law  requiring  an  employer  to  state 
that  there  is  a  strike  at  his  plant  when  advertising  for 
men  to  take  the  place  of  strikers. 

I  there  established  inter  alia,  the  proposition  that 
any  unwarranted  interference  by  the  State  with  the 
liberty  of  contract  between  employer  and  employe  is 
in  violation  of  Article  XIV  of  amendments  to  the  Con- 
stitution of  the  United  States,  and  of  Section  2  of  Arti- 
cle II  of  the  Constitution  of  Illinois,  which  provide : 

' '  That  no  person  shall  be  deprived  of  life,  liberty 
or  property  without  due  process  of  law. ' ' 
In  that  opinion  it  was  said : 

"The  vocation  of  an  employer,  as  well  as  that 
of  his  employe,  is  property." 
Citing : 

Coal  Co.  v.  People,  147  111.,  66. 

State  v.  Goodivillie,  10  S.  E.  Eep.,  285,  287 

(W.  Va.). 

A  prohibition  by  the  State  of  any  attempt  to  penalize 
the  exercise  of  a  civic  duty  (such  as  voting,  riot  duty, 
or  jury  service)  is  well  within  the  police  power  vested 
in  the  Legislature.  Whether  the  franchise  be  regarded 
as  a  moral  duty,  or  as  a  privilege,  public  policy 
demands  that  it  should  be  exercised  freely  and  without 
coercion.  There  are  statutes  in  many  States  aimed  at 
such  coercion  by  the  employer  which  prohibit  threats  of 


431 

a  reduction  of  wages,  loss  of  employment,  etc.  But  the 
burdens  of  citizenship,  like  the  privileges,  are  attached 
to  the  individual  and  cannot  be  shifted.  (Qui  sentit 
commodum  sentire  debet  et  onus.) 

The  police  power  is  not  so  elastic  a  thing  as  to  give 
warrant  to  a  statute  which  confiscates  the  property  of 
the  employer  and  grants  it  to  the  employe  as  an  incen- 
tive to  exercise  the  right  of  suffrage. 

If  Section  25  of  the  Ballot  Law  of  1891  merely  pro- 
vided that  the  employe  should  suffer  no  penalty,  e.  g., 
punishment,  fine,  loss  of  employment,  etc.,  it  would 
be  a  valid  and  highly  salutary  enactment.  But  it  goes 
farther,  it  provides  not  only  that  the  employer  shall 
inflict  no  penalty,  but  that  the  employer  shall  pay  his 
employe  a  bounty  for  exercising  the  franchise. 

A  State  militia  law  might  have  an  analogous  provi- 
sion that  no  officer  or  enlisted  man  should  be  discharged 
from  his  employment  by  reason  of  his  attendance  on 
his  annual  encampments.  Such  provision  would  be 
valid  under  the  police  power,  being  traceable  by  no  de- 
vious process  to  the  head  of  public  safety.  (Salus 
populi  suprema  lex.)  Should  such  a  law,  however,  go 
so  far  as  to  require  the  payment  of  wages  by  the  em- 
ployer to  the  employe  during  the  time  of  duty  at  an 
annual  encampment,  it  would  be  violative  of  natural 
equity,  and  manifestly  unconstitutional. 

The  distinction,  therefore,  is,  in  my  opinion,  clear. 
Where  a  statute  prohibits  a  penalty  inflicted  by  the 
employer  as  a  determent  from  the  performance  of  a 
duty  to  the  State,  or  the  exercise  of  a  right  of  citizen- 
ship, such  statute  is  valid;  where,  however,  as  in  this 
instance,  a  statute  taxes  the  employer  as  an  induce- 
ment to  the  employe  to  perform  the  duty  or  exercise 
the  right,  such  a  statute  is  unconstitutional  and  void. 

A  further  objection  to  the  law,  if  any  be  needed,  is 
that  it  places  a  class  of  persons  sui  juris  under  the 
special  tutelage  of  the  State. 

I  am  of  the  opinion,  therefore  that  Section  25  of 
the  Ballot  Law  of  1891  violates  both  the  State  and 
Federal  Constitutions. 


432 


WHETHER  EMPLOYERS  ARE  LIABLE  FOR  THE  PAY  OF  EM- 
PLOYES TAKING  THE  TIME  TO  VOTE,  UNDER  THE  ILLINOIS 
LAW. 

(The  Brunswick-Balke-Collender  Company,  August  9, 

1904.) 

"Referring  to  the  opinion  of  Mr.  Levy  Mayer 
as  to  the  right  of  the  employer  to  specify  the  time 
of  day  for  employes  to  vote  herewith  attached,  our 
factory  as  a  rule  starts  at  7  a.  m.  Suppose  we  start 
at  8  a.  m.  on  election  day,  that  will  give  the  men 
from  6  to  8  (two  hours)  to  vote,  must  we  pay 
them  the  two  hours  if  they  demand  it,  or  suppose 
we  close  all  day,  would  we  be  obliged  to  pay  the 
men  two  hours  1 ' ' 

The  law  provides  that  the  employe  shall  be  entitled 
to  absent  himself  two  hours  "from  any  service  or  em- 
ployment in  which  he  is  then  engaged  or  employed." 
If  the  factory  usually  opens  at  7  a.  m.,  and  it  is  opened 
at  8  a.  m.  on  election  days,  this  would  not  be  a  com- 
pliance with  the  statute,  as  it  would  not  be  two  hours' 
freedom  from  service. 

There  is  nothing  in  the  law  which  prevents  the  em- 
ployer from  shutting  down  his  factory  all  day. 
Whether  he  will  be  liable  for  a  day's  wages  depends 
upon  the  contract  of  the  employe.  If  the  employe 
works  by  the  hour  or  piece  there  would  be  no  liabil- 
ity. 

WHETHER  OR  NOT  IT  IS  NECESSARY  TO  COPYRIGHT  TRADE- 
MARKS AND  TRADE-BRANDS  TO  PREVENT  THEIR  USE  BY 
COMPETITORS. 


(Charles  Emmerich  &  Co.,  June  20,  1904.) 
"We  beg  leave  to  ask  for  the  opinion  of  our 
counsel  as  to  whether  or  not  it  is  necessary  to 
copyright  trade-marks  and  trade-brands  to  protect 
us  against  their  being  used  by  competitors." 
The  right  to  a  trade-mark  is  a  common  law  right  and 
is  not  dependent  for  its  validity  upon  any  statute.  Stat- 
ute have  been  enacted  by   Congress   and  different 


433 

states  in  aid  of  the  common  law  rights  and  providing 
for  the  registration  of  trade-marks,  but  compliance  with 
such  statutes  is  not  a  prerequisite  to  the  acquisition  of 
a  valid  trade-mark.  A  right  to  a  trade-mark  is  not 
created  by  registration.  Registration  under  the  Act  of 
Congress  is  of  little  practical  value,  except  for  the 
purpose  of  creating  a  permanent  record  of  the  date  of 
the  adoption  and  use  of  the  trade-mark,  or  in  a  par- 
ticular class  of  cases  where  it  is  desirable  to  assert 
one's  rights  in  the  United  States  courts.  That  class  of 
cases  has  reference  to  foreign  commerce  and  commerce 
with  the  Indian  tribes.  Registration  is  only  prima  facie 
evidence  of  ownership  of  the  trade-mark  registered, 
and  is  not  conclusive  or  binding  upon  the  courts  as  to 
the  right  of  the  party  to  exclusive  use.  The  mere  fact 
that  the  trade-mark  has  been  registered  does  not  create 
the  conclusive  right  of  user. 

NOTE: — The  Federal  statute  has  since  been  amended.     See  the  later 
opinion  of  March  17,  1905,  to  Eubber  Paint  Co. — Ed. 


WHETHER  AN  ARCHITECT  OR  CONSULTING  ENGINEER  IS  LIA- 
BLE FOR  THE  INSTALLATION  OF  MACHINERY  THAT  DOES 
NOT  PROVE  SATISFACTORY. 

(Robert  W.  Hunt  &  Co.,  August  9,  1904.) 

"Will  you  kindly  furnish  me  with  an  opinion  on 
the  following  hypothetical  question: 

Supposing  that  an  architect  or  consulting  engi- 
neer is  retained  by  a  company  or  individual  to 
draw  up  plans  and  specifications  and  superintend 
construction  of  a  manufacturing  or  electric  power 
plant,  and  that  said  architect  or  engineer  furnishes 
such  plan  and  specifications,  using  his  best  judg- 
ment, but  in  doing  so  either  makes  a  mistake  in 
judgment  or  finds  that  some  of  the  machinery  in- 
stalled is  not  adapted  for  the  particular  service  re- 
quired, although  such  machinery  was  installed 
with  the  full  knowledge  and  approval  of  the  owner. 

Would  the  said  architect  or  engineer  be  in  any 
way  liable  for  damages  or  could  the  owner  deduct 


434 

from  the  commisison  to  be  paid  said  architect  or 
engineer  an  amount  equal  to  the  expense  of  recti- 
fying such  mistake,  or  if  the  damage  to  the  owner 
through  such  mistake  was  more  than  the  commis- 
sion due,  would  the  owner  have  the  right  to  refuse 
payment  of  any  part  or  all  of  the  commission  1 ' ' 
An  architect's  responsibility  is  analogous  to  that  of 
a  lawyer  or  physician.     There  is  an  implied  under- 
taking that  an  architect  or  engineer  possesses  sufficient 
skill  and  ability  to  perform  the  required  services  at 
least  ordinarily  and  reasonably  well.     He  must  exer- 
cise his  skill,  ability  and  judgment  (in  the  case  of  an 
architect  also  his  taste)  reasonably  well  and  without 
neglect. 

Coombs  v.  Beede,  89  Me.,  187. 
Hubert  v.  Aitken,  15  Daly  (N.  Y.)  237. 
Moneypenny  v.  Hartland,  I.  C.  &  P.,  352. 
An  architect  covenants  not  only  that  he  is  in  pos- 
sesison  of  requisite  skill,  but  that  the  skill  shall  be 
exercised  in  the  work  which  he  has  undertaken. 

Johnson  v.  Wanamaker,,  17  Pa.  Super.  Ct.,  301. 
But  it  is  not  necessary  for  him  to  be  more  than  ordi- 
narily careful  and  attentive,  or  so  closely  to  superin- 
tend the  construction  by  the  contractor  as  to  discover 
contract  variations  and  the  defects  of  execution  that 
can  only  be  detected  by  the  exercise  of  extraordinary 
diligence. 

Stewart  v.  Boehme,  53  111.  App.,  463. 
Vigeant  v.  Scully,  20  111.  App.,  437. 
And  where  a  skilled  architect  uses  his  best  judg- 
ment, he  is  not  liable  for  faults  in  the  construction  re- 
sulting from  defects  in  the  plans. 

Chapel  v.  Clark,  117  Mich.,  63"8. 
His  undertaking  does  not  imply  or  guarantee  a  per- 
fect plan  or  a  satisfactory  result,  and  there  is  no  im- 
plied warranty  that  the  building  can  be  built  from 
the  plans. 

Coombs  v.  Beede,  supra. 
Shipman  v.  State,  43  Wis.,  381. 
Thorn  v.  London,  1  App.  Gas.,  120. 
An  architect  is  responsible  not  only  for  actual  fraud 


435 

committed  by  him,  but  also  for  a  negligent  disregard 
of  his  duty. 

Larker  v.  Colton,  80  111.  App.,  75. 

Schreimer  v.  Miller,  67  Iowa,  91. 
The  measure  of  damage  ordinarily  in  an  action  to 
recover  for  an  architect's  negligence  in  drawing  plans 
is  the  difference  between  the  value  of  the  building  as 
designed  and  constructed  and  what  it  would  have  been 
worth  had  it  been  properly  constructed. 

Larrimore  v.  Comanche  Co.  (Tex.)  32  S.  W., 

367. 

Whether  an  architect  has  used  proper  skill  and  dili- 
gence is  a  question  of  fact  for  the  jury. 

Moneypenny  v.  Hartland,  I.  C.  &  P.,  352. 
In  an  action  by  an  architect  to  recover  for  services 
where  the  architect  furnished  defective  plans,  whereby 
the  owner  suffered  damage,  the  owner  is  entitled  to  a 
reduction  of  the  amount  of  damage  caused  by  the  archi- 
tect's  negligence. 

Hubert  v.  Aitken,  15  Daly,  237. 
On  the  hypothetical  case  given  the  skilled  engineer 
or  architect  exercising  "his  best  judgment,"  and  not 
guilty  of  negligence,  is  not  liable  in  my  opinion.  But 
where  he  is  incompetent  and  negligent,  or  either,  he  is 
liable,  and  the  owner  may  make  the  deduction  from 
his  commissions ;  and,  of  course,  if  the  damages  exceed 
the  commissions,  the  owner  would  have  the  right  to  re- 
fuse payment  of  any  part  of  the  commissions.  The 
language,  used  in  the  Hunt  Companys  communication 
is  a  trifle  ambiguous — "using  his  best  judgment,  but  in 
doing  so  either  makes  a  mistake  in  judgment,  or  finds 
that  some  of  the  machinery  installed  is  not  adapted 
for  the  particular  service  required,  although  such  ma- 
chinery was  installed  with  full  knowledge  and  approval 
of  the  owner. ' '  As  above  said,  if  the  engineer  makes  a 
blunder  due  to  negligence  or  lack  of  skill,  he  is  liable, 
and  the  inaction  of  the  owner  would  probably  not  affect 
the  question,  because  what  is  evident  to  an  expert  may 
be  latent  to  an  inexpert. 


436 


THE  EFFECT  OF  THE  WORDS  F.  O.  B.  COMMON  SHIPPING 
POINT/'  AND  OTHER  EXPRESSIONS,  AS  FIXING  THE  LIABIL- 
ITY LOSS  ON  GOODS  IN  TRANSIT. 

(J.  B.  Inderridden  Company,  August  9,  1904.) 

1 1  We  would  thank  you  to  kindly  secure  for  us  an 
expression  of  opinion  from  Mr.  Levy  Mayer,  with 
respect  to  the  following  clause  which  appears  in 
our  contracts : 

'Terms:  Net  cash,  sight  draft  against  bill  of 
lading,  draft  to  be  held  by  bank  until  arrival  and 
inspection  of  goods  by  purchaser.' 

The  merchandise  having  been  sold  f.  o.  b.  com- 
mon shipping  point  California,  when  does  the  own- 
ership pass  from  the  seller  to  the  purchaser?  If, 
in  your  opinion,  ownership  does  not  pass  to  the 
purchaser  until  after  the  arrival  and  inspection  of 
the  merchandise,  then  how  may  we  as  sellers  pro- 
tect ourselves?  The  idea  in  selling  f.  o.  b.  com- 
mon point  is  to  have  ownership  pass  immediately 
the  goods  are  put  f.  o.  b.  to  the  purchaser.  At 
the  same  time,  we  must  necessarily  allow  the  pur- 
chaser the  privilege  of  awaiting  the  arrival  of 
the  goods  before  payment  is  made,  so  that  he  may 
have  an  opportunity  of  seeing  that  the  goods 
shipped  are  such  as  purchased. 

Having  had  some  trouble  to  protect  ourselves 
we  inserted  this  additional  clause  in  the  contract: 

1  Seller  not  liable  for  loss  of,  or  damage  to  goods 
while  in  transit.' 

The  purchaser  then  took  the  position  that,  the 
car  having  been  lost  in  transit,  since  he  had  pur- 
chased draft  payable  on  arrival  and  inspection  and 
the  car  never  having  arrived,  he  was  not  liable. 

Custom : 

Would  the  general  customs  of  the  trade  in  our 
line  affect  your  opinion?  It  has  always  been  the 
custom  where  goods  are  damaged  or  partly  lost 
in  transit,  for  purchaser  to  assume  the  burden  of 
making  claim  on  the  transportation  company,  but 


437 

in  several  instances  entire  cars  have  been  lost 
and  then  the  purchaser  simply  took  the  position 
that  they  were  not  liable  under  the  terms  of  the 
contract,  since  they  had  purchased  with  the  under- 
standing that  they  would  pay  for  the  goods  on  ar- 
rival. ' ' 

The  question  as  to  when  the  title  to  goods  shipped 
passes  to  the  consignee  is  primarily  a  question  of  in- 
tention, which  can  only  be  determined  by  reference 
to  all  the  facts  and  circumstances  of  the  particular 
case.  I  have  not  before  me  all  of  the  terms  of  the 
contract  under  which  the  particular  shipment  is  made. 
As  a  general  rule,  delivery  to  the  carrier  is  a  delivery 
to  the  consignee,  and  the  risk  of  transit  is  on  the  con- 
signee. This  rule,  however,  may  be  varied  by  other 
circumstances  showing  an  intention  on  the  part  of  the 
consignor  to  reserve  the  jus  disponendi. 

The  authorities  are  referred  to  in  my  opinion  to 
the  association  under  date  of  October  24,  1903,  in  an- 
swer to  the  query  of  American  Steel  &  Wire  Company. 
Where,  under  the  contract,  the  property  is  delivered  to 
the  carrier  and  the  consignee  has  the  right  to  inspect 
the  goods  and  return  them  if  not  satisfactory,  the  title 
does  not  pass  to  the  consignee  until  acceptance,  and  the 
risk  of  carrier  is  imposed  on  the  consignor.  The  same 
is  true  in  the  absence  of  other  circumstances  if  the  bill 
of  lading  is  attached  to  a  draft  to  be  delivered  upon 
the  payment  or  acceptance  of  the  draft,  especially 
where  the  bill  of  lading  is  issued  in  the  name  of  the 
consignor.  It  is  possible,  however,  that  the  risk  of 
carriage  be  assumed  by  the  consignee  even  though  the 
title  remains  in  the  consignor. 

Benjamin  on  Sales  (3rd  Ed.),  Sec.  370. 
I  am  of  the  opinion  that  the  clause  above  quoted  will 
cover  the  case  and  throw  the  risks  of  carriage  on  the 
consignee,  although  it  is  possible  to  make  it  more  spe- 
cific. I  am,  therefore,  of  the  opinion  that  the  consignee 
is  liable,  even  though  the  car  was  lost  in  transit  and 
never  delivered  to  the  consignee.  A  custom  of  the 
trade  can  have  no  application  in  determining  whether 
or  not  the  consignor  or  consignee  must  prosecute  the 


438 

claim  against  the  carrier.    This  must  be  determined  by 
other  circumstances. 


THE  EFFECT  OF  CERTAIN  WORDS  (SUCH  AS  TITLE  TO  REMAIN 
IN  VENDOR  UNTIL  GOODS  ARE  PAID  FOR)  TO  RETAIN  THE 
TITLE  TO  GOODS  SOLD  IN  THE  VENDEE. 

(Emerson  Manufacturing  Company,  August  9, 1904.) 
' '  In  talking  with  one  of  the  leading  concerns  re- 
garding the  question  of  the  seller  retaining  the  title 
in  his  goods  until  they  were  paid  for  in  cash  by  the 
buyer,  a  contract  embodying  the  following  clauses 
is  reported  as  having  stood  the  test  in  many  suits 
and  never  failed  to  hold  the  goods.  Will  you  kindly 
give  us  Mr.  Mayer's  opinion  as  to  the  value  of 
these  clauses  in  a  straight  sale  contract? 

'Should  the  buyer  become  insolvent  or  in  de- 
fault, seller  shall  have  the  right  to  declare  the 
whole  account  due. 

'The  title  to  the  goods  delivered  under  this  con- 
tract to  remain  in  the  seller  until  it  shall  have  re- 
covered the  money  for  the  same  and  upon  failure 
to  make  such  payment,  the  seller  may  repossess 
itself  and  take  away  said  goods.' 
The  clause  in  question  is  effective  to  retain  title  in 
the  seller  as  between  buyer  and  seller  until  pa3rment  of 
the  same  is  made.    The  vendee,  however,  having  pos- 
session of  the  property,  is  clothed  with  the  indicia  of 
ownership  and  in  many  of  the  States  can  convey  a 
good  title  to  a  subsequent  purchaser  or  an  attaching  or 
execution  creditor  to  the  exclusion  of  the  seller.    The 
authorities  sustaining  this  position  are  referred  to  in 
my  opinion  of  March  11,  1904,  to  the  Gregory  Electric 
Company. 


439 


AS  TO  WHETHER  UNDER  THE  ELECTION  LAW  EMPLOYES  MUST 
BE  PAID  FOR  THE  TWO  HOURS  FREE  TIME  THEY  ARE  AL- 
LOWED FOR  VOTING. 

(The  Brunswick-Balke-Collender  Co.,  Aug.  9,  1904.) 
"Referring-  to  the  opinion  of  Mr.  Levy  Mayer 
as  to  the  right  of  the  employer  to  specify  the  time 
of  day  for  employes  to  vote  herewith  attached,  our 
factory  as  a  rule  starts  at  7  A.  M.  Suppose  we 
start  at  8  A.  M.  on  election  days,  that  will  give 
the  men  from  6  to  8  (two  hours)  to  vote,  must  we 
pay  them  the  two  hours  if  they  demand  it,  or  sup- 
pose we  close  all  day,  would  we  be  obliged  to  pay 
the  men  two  hours. ' ' 

The  law  provides  that  the  employe  shall  be  entitled 
to  absent  himself  two  hours  "from  any  service  or  em- 
ployment in  which  he  is  then  engaged  or  employed." 
If  the  factory  usually  opens  at  7  A.  M.  and  it  is  opened 
at  8  A.  M.  on  election  days,  this  would  not  be  a  com- 
pliance with  the  statute,  as  it  would  not  be  two  hours 
freedom  from  service. 

There  is  nothing  in  the  law  which  prevents  the 
employer  from  shutting  down  his  factory  all  day. 
Whether  he  will  be  liable  for  a  day's  wages  depends 
upon  the  contract  with  the  employe.  If  the  employe 
works  by  the  hour  or  piece,  there  would  be  no  liability. 


BASIS  OF  ASSESSMENT  OF  CAPITAL  STOCK  OF  A  CORPORATION 
WHOSE  STOCK  IS  SUBJECT  TO  ASSESSMENT  BY  THE  LOCAL 
ASSESSOR. 

(Illinois  Mfrs.  Assn.,  Aug.  9,  1904.) 
I  have  your  favor  in  which  you  ask  my  opinion  on 
the  amount  of  taxes  a  corporation  whose  capital  stock 
is  subject  to  assessment  by  the  local  assessor  must  pay. 
The  authorized  capital  'is  $5,000,000.  Paid  in  $5,000,- 
000 ;  market  value  of  shares,  $225  each ;  real  and  per- 
sonal assessment,  $300,000.    I  also  understand  that  a 
large  amount  of  money  which  the  capital  represents 


440 

has  been  used  in  advertising,  etc.,  and  that  the  $300,000 
covers  the  value  of  the  tangible  property. 

Paragraph  4  of  section  3  of  chapter  120  Kurd's 
Eevised  Statutes  of  Illinois  of  1903,  provides : 

"The  capital  stock  of  all  companies  and  associa- 
tions now  or  hereafter  created  under  the  laws  of 
this  state,  except  those  required  to  be  assessed  by 
the  local  assessors,  as  hereinafter  provided  shall 
be  so  valued  by  the  state  board  of  equalization  as 
to  ascertain  and  determine  respectively,  the  fair 
cash  value  of  such  capital  stock,  including  the 
franchise,  over  and  above  the  assessed  value  of  the 
tangible  property  of  such  company  or  association; 
such  board  shall  adopt  such  rules  and  principles 
for  ascertaining  the  fair  cash  value  of  such  capital 
stock  as  to  it  may  seem  equitable  and  just,  and 
such  rules  and  principles,  when  so  adopted,  if  not 
inconsistent  with  this  act,  shall  be  as  binding  and 
of  the  same  effect  as  if  contained  in  this  act,  sub- 
ject, however,  to  such  change,  alteration  or  amend- 
ment as  may  be  found  from  time  to  time,  to  be 
necessary  by  said  board ;  provided,  that  in  all  cases 
where  the  tangible  property  or  capital  stock  of  any 
company  or  association  is  assessed  under  this  act, 
the  shares  of  capital  stock  of  such  company,  or 
association  shall  not  be  assessed  or  taxed  in  this 
state.  The  clause  shall  not  apply  to  the  capital 
stock,  or  shares  of  capital  stock  of  banks  organ- 
ized under  the  general  banking  laws  of  this  state 
or  under  any  special  charter  heretofore  granted 
by  the  legislature  of  this  state:  Provided,  fur- 
ther, that  companies  and  associations  organized 
purely  for  manufacturing  purposes,  or  for  the  min- 
ing and  sale  of  coal,  or  printing  or  for  publishing 
of  newspapers  or  for  the  improving  and  breeding 
of  stock,  shall  be  assessed  by  the  local  assessors  in 
like  manner  as  the  property  of  individuals  is 
required  to  be  assessed.  • 

The  question  is  decided  in  the  recent  case  of  The 
Hub  v.  Hanberg,  211  111.,  43  (1904).  It  was  there 
held  that  it  was  the  duty  of  the  local  assessor  to  assess 


441 

the  fair  cash  value  of  the  capital  stock,  including 
the  franchise,  over  and  above  the  assessed  value 
of  the  tangible  property  of  every  corporation  named 
in  the  last  proviso  to  section  4,  supra,  above  quoted, 
and  that  the  corporations  named  in  that  proviso 
are  liable  to  taxation  upon  their  capital  stock,  as  are 
other  corporations  for  pecuniary  profit,  the  duty  of 
assessing  which  is  vested  in  the  state  board.  If  the 
par  value  of  shares  is  $100  and  the  market  value  is 
$225  this  circumstance  would  aid  the  state  board  in 
determining  the  fair  cash  value.  That  a  large  propor- 
tion of  the  paid  in  capital  has  been  used  in  advertising 
is  immaterial. 

One  fifth  of  the  fair  cash  value  of  the  capital  stock 
and  franchise,  so  fixed,  is  the  assessed  value  of  the 
same  and  from  this  latter  must  be  deducted  the 
assessed  value  of  the  corporation's  tangible  property 
as  fixed  by  the  local  assessor  of  Cook  County.  Upon 
the  balance,  it  is  the  duty  of  the  county  clerk  of  Cook 
County  to  extend  taxes,  at  the  rate  levied  for  state, 
county,  city,  library,  educational,  sanitary  district  and 
park  purposes. 

NOTE: — The  above  was  amended  in  1905.     See  Laws  of  111.  1905, 
p.  353.— Ed. 


WHETHER  AN  INSURANCE  BROKER  IS  ENTITLED  TO  RENEWAL 
COMMISSIONS  ON  FIRE  INSURANCE  POLICIES,  WHEN  THESE 
POLICIES  ARE  RENEWED  THROUGH  ANOTHER  BROKER. 
WHETHER  BROKER  LIABLE  FOR  RETURN  OF  UNEARNED 
PREMIUMS  ON  CANCELLED  POLICIES. 

(Chas.  Emmerich  &  Co.,  Aug.  9,  1904.) 
' '  A  certain  insurance  brokerage  firm  in  Chicago 
several  years  since  solicited  an  opportunity  to 
place  insurance  for  us.  We  advised  them  that 
if  they  could  secure  us  good  companies,  we  were 
open  for  a  considerable  line.  The  submitted  poli- 
cies of  several  companies,  from  which  we  selected 
those  which  we  considered  good.  Some  of  these 
policies  we  have  renewed  from  year  to  year. 


442 

The  policies  were  mainly  of  surplus  line  and 
Lloyd  companies,  amongst  them  Lloyds  of  Lon- 
don. Recently  we  had  occasion  to  sever  connec- 
tion with  this  firm  and  renewed,  as  well  as 
bought,  additional  insurance  in  the  London  Lloyds. 
This  brokerage  firm  now  claims  that  they  are 
entitled  to  10  per  cent,  commission  on  this  renewal 
and  increased  insurance,  and  they  claim  to  have 
legal  advice  that  the  stand  they  take  is  correct 
and  they  propose  to  obtain  what  they  claim  is  their 
rights. 

Will  you  kindly  advise  us  if  this  brokerage  con- 
cern is  entitled  to  commission  on  renewal  of  poli- 
cies originally  obtained  through  them,  but  later 
renewed  through  another  firm?  Also  kindly  advise 
whether  an  insurance  brokerage  firm  is  liable  to 
us  for  return  premiums  on  cancelled  policies, 
where  the  policies  were  obtained  through  them  and 
they  rendered  a  bill  for  same  on  their  own  bill 
head,  and  not  as  an  agent  and  where  the  premiums 
were  paid  to  and  receipted  by  them  as  a  firm?" 

"What  is  understood  under  the  designation  of 
an  insurance  broker  is  one  who  acts  as  a  middle- 
man between  the  insured  and  the  company,  and 
who  solicits  insurance  from  the  public  under  no 
employment  from  any  special  company,  but  having 
secured  an  order,  he  either  places  the  insurance 
with  the  company  selected  by  the  insured,  or  in 
the  absence  of  any  selection  by  him,  then  with  the 
company  selected  by  such  broker." 

Arff  v.  8.  F.  Ins.  Co.,  125  N.  Y.,  57,  63. 
When  the  broker's  employment  extends  only  to  the 
procurement  of  the  policy,  his  agency  is  not  continuing. 
It  ceases  when  the  purpose  of  his  employment  has  been 
accomplished ;  that  is,  upon  the  execution  and  delivery 
of  the  policy. 

Am.  F.  Ins.  Co.  v.  Brooks,  83  Md.,  32. 
Grace  v.  Ins.  Co.,  109  U.  S.,  278. 
Herman  v.  Ins.  Co.,  100  N.  Y.,  411. 
A  uniform  and  general  usage  to  pay  agents  com- 
missions on  renewal  premiums  for  a  period  after  the 


443 

termination  of  the  agency  can  become  part  of  the  con- 
tract of  agency  only  when,  from  all  the  circumstances 
surrounding  the  parties  and  transaction,  it  appears 
that  they  intended  to  contract  with  reference  to  the 
usage. 

Park  v.  Piedmont  &  A.  L.  Ins.  Co.,  40  Ga.,  601. 
Castleman  v.  So.  Mut.  Life  Ins.  Co.,  77  Ky. 

(14  Bush.),  197. 

Spaulding   v.   New   York   Life   Ins.   Co.,   61 
Maine,  329. 

In  Castleman  v.  So.  Mut.  Life  Ins.  Co.,  supra,  the 
court  held  that  an  alleged  custom,  to  allow  insurance 
agents,  after  discharge,  commissions  on  renewal  prem- 
iums on  business  obtained  by  them  for  three  years  from 
the  date  of  renewal,  to  be  invalid,  as  unreasonable. 

A  renewal  is  virtually  a  new  contract. 
Biddle  on  -Insurance,  Sec.  341. 

To  entitle  the  brokers  to  commissions  on  renewals, 
there  must  be  a  provision  to  that  effect  in  the  contract, 
or  there  must  be  a  custom  so  general  and  notorious  that 
the  parties  must  be  presumed  to  have  contracted  with 
reference  to  it.  I  know  of  no  such  custom. 

The  second  proposition  is  likewise  a  matter  of 
contract  rather  than  a  question  of  law.  There  is  no 
custom,  that  I  am  familiar  with,  covering  this  manner 
of  doing  business. 

The  policies  disclose  what  companies  are  parties  to 
the  contract  of  insurance,  and  such  companies,  and  not 
the  brokers,  are  the  proper  parties  to  be  sued  for  the 
return  of  unearned  premiums  where  the  policies  have 
been  cancelled,  unless  the  brokers  have  been  empowered 
to  receive  notice  of  cancellations  and  to  receive  re- 
turn premiums  for  the  insured,  as  agents  of  the  in- 
sured, and  have  actually  received  such  return  prem- 
iums, which  they  wrongfully  withhold.  In  such  cases, 
of  course,  the  brokers  may  be  sued. 


444 


VALIDITY  OF  A  PKOVISION  IN  A  BILL  OF  LADING  IMPOSING  A 
PENALTY  FOR  OVERLOADING  CARS. 

(S.  P.  Shotter  Co.,  August  9,  1904.) 
An  opinion  is  requested  on  the  validity  of  a  condi- 
tion in  a  bill  of  lading,  imposing  a  penalty  for  over- 
loading cars.     The  condition  is  as  follows: 

"  2.     Cars  overloaded  more  than  ten  per  cent, 
above  their  marked  capacity  will  be  subjected  to 
a  penalty  of  one  and  one-half  rates  to  be  charged 
on  all  weight  in  excess  of  marked  capacity  of  car. 
In  addition  the  expense  of  transferring  the  load 
will  be  charged  against  the  shipment." 
The  shipment  originated  and  the  bill  of  lading  was 
issued  at  a  point  in  Mississippi.     It  is,  therefore,  a 
Mississippi  contract.     To  bind  the  consignee,  the  con- 
dition must  have  been  assented  to. 

In  Southern  Express  Co.  v.  Moon,  39  Miss.,  822,  at 
p.  832,  the  Mississippi  High  Court  of  Errors  and  Ap- 
peals said: 

"The  public  policy  on  which  the  extraordinary 
liability  of  common  carriers  is  founded  is  too  im- 
portant to  be  thus  virtually  repealed  by  the  fraud 
and  circumvention  of  artfully-contrived,  printed 
or  prepared  receipts  thrust  upon  those  to  whom 
the  hurry  and  press  of  railroad  travel  denies  the 
time  of  examination,  or  the  opportunity  of  fair 
assent. ' ' 

If  the  provision  in  the  bill  of  lading  was  assented 
to  by  the  consignee,  either  personally  or  by  his  agent, 
it  constituted  an  agreement,  the  validity  of  which  re- 
mains to  be  determined  from  other  considerations 
than  those  involving  the  assent  of  the  shipper.  If  it 
was  not  assented  to,  of  course,  it  is  not  binding. 

Where  the  damage  is  not  readily  ascertainable,  the 
parties  may  agree  upon  any  sum  as  compensation  for 
the  breach  of  a  contract,  but  the  sum  agreed  upon 
must  not  manifestly  exceed  the  amount  of  the  dam- 
age suffered.  Such  agreed  sum  is  "liquidated  dam- 
ages." But  when  the  sum  agreed  upon  is  manifestly 
greater  than  the  actual  damages  and  the  damages  are 


445 

such  as  can  be  readily  shown,  such  sum  so  inserted  in 
the  contract  will  be  regarded  merely  as  a  penalty  and 
only  the  actual  damages  can  be  recovered. 

Scho field  v.  Tompkws,  95  111.,  190. 

Radio ff  v.  Basse,  96  111.  App.,  74. 

Poppers  v.  Meagher,  148  111.,  192. 

Gobble  v.  Linden,  76  111.,  157. 

Morris  v.  Tillson,  81  111.,  607. 

Reeves,  Admr.  v.  Slipp,  91  111.,  609. 
A  penalty  is  denned  in  the  Ex.  p.  Burden,  16  Ch.  D., 
675,  as  '"  something  which  a  debtor  is  bound  to  pay, 
over  and  above  the  original  liability  as  a  punishment. ' ' 
In  distinguishing  between  penalties  and  liquidated 
damages,  due  weight  is  given  to  the  words  of  the  par- 
ties but  the  words  employed  must  yield  to  the  general 
intent.  Thus  what  were  denominated  liquidated  dam- 
ages by  the  parties  have  in  many  instances  been  held 
to  be  penalties,  and  the  use  of  the  word  penalty  in  the 
present  case  is  not  of  itself  conclusive.  Each  case  must 
stand  upon  its  own  facts. 

Keeble  v.  Keeble,  85  Ala.,  552. 

Jaqua  v.  Headington,  114  Ind.,  309. 

19  Am.  Encl.  (2nd  Ed.),  p.  401. 
Where   there    is    no    actual   damage    sustained,    or 
claimed,  the  sum  fixed  is  a  penalty. 

McCann  v.  Albany,  11  N.  Y.  App.  Div.,  378. 
I  assume  that  no  actual  damages,  in  fact,  resulted 
to  the  car  itself  from  overloading.  Any  other  dam- 
ages would  be  merely  nominal,  or  so  indirect  and  re- 
mote as  not  to  sustain  the  theory  that  the  rate  and  one- 
half  penalty  is  a  liquidated  allowance  for  them.  Of 
this  kind  might  possibly  be  claimed  the  increased  risk 
and  inconvenience  in  the  operation  of  trains  from  an 
equal  distribution  of  train  loads  or  again  the  constant 
but  imperceptible  injury  to  the  permanent  structures 
of  the  road  (such  as  bridges,  etc.)  from  a  too  heavy 
concentration  of  weights  on  a  given  wheel  base. 

It  is  clear  also  that  a  penalty  is  intended  from  the 
fixing  of  "rate  and  one-half"  which  would  be  quite  dif- 
ferent in  amount  with  freight  of  different  classifica- 
tion under  the  identical  condition  of  overloading. 


446 

Nor  can  the  penalty  be  justified  as  imposed  in  the 
interest  of  "public  safety."  The  power  of  imposing 
fines  in  this  behalf  is  competent  only  to  the  public  au- 
thorities. 

I  am  of  the  opinion,  therefore,  that  the  charges  in 
question  constitute  a  penalty  and  cannot  legally  be 
collected. 

If  the  car  at  the  time  of  loading  be  not  under  the 
carriers'  control  or  direction  (e.  g.,  if  it  be  in  the  ship- 
pers' private  yard  or  on  his  private  siding)  the  pro- 
vision that  "the  expense  of  transferring  the  load  will 
be  charged  against  the  shipment"  is  not  penal,  and 
can  doubtless  be  enforced. 

THE  EFFECT  OF  THE  KECENT  DECISION  OF  THE  SUPREME 
COURT  OF  KANSAS,  IN  DEERE  PLOW  CO.  V.  WYLAND,  UPON 
THE  FOREIGN  CORPORATION  LAW  OF  THAT  STATE  AND  AS 
TO  WHETHER  FOREIGN  CORPORATIONS  DOING  AN  INTER- 
STATE COMMERCE  BUSINESS  MUST  COMPLY  WITH  THE 
KANSAS  LAW. 

(Oliver  Typewriter  Company,  August  18, 1904.) 

"Our  attention  has  been  called  to  a  decision 
which  was  rendered  on  May  7th  last  by  the  Su- 
preme Court  of  the  State  of  Kansas  in  the  case  of 
the  John  Deere  Plow  Company  against  W.  W. 
Wyland  and  D.  F.  Spatz,  of  Jewell  County. 

If  we  are  correctly  informed  that  decision  is  to 
the  effect  that  a  foreign  corporation  which  is 
doing  business  in  the  State  of  Kansas,  under  the 
terms  of  Interstate  Commerce  and  therefore  not 
having  complied  with  the  Kansas  corporation  law, 
is  restricted  from  the  use  of  the  local  courts  of  that 
State  in  making  collections.  If  this  is  the  result, 
we  should  like  to  be  informed  as  to  how  such  a 
corporation  can  enforce  its  collections  in  that 
State." 

I  am  familiar  with  the  opinion  of  the  Kansas  Su- 
preme Court  in  Deere  Plow  Co.  v.  Wyland,  and  Same  v. 
Spatz,  76  Pac.  Eep.,  863.  It  is  there  held,  to  quote 
the  syllabus,  as  follows : 


447 

''That  part  of  said  section  which  provides  that 
no  foreign  corporation  doing  business  in  this  State 
shall  maintain  an  action  in  any  of  the  courts  there- 
of without  first  filing  certain  statements  with  the 
secretary  of  state  is  not  violative  of  the  commerce 
clause  of  the  Federal  constitution,  even  when  ap- 
plied to  corporations  engaged  solely  in  interstate 
commerce. ' ' 

The  matter  is  covered  by  my  opinion  of  March  24, 
1903,  to  the  Association  in  answer  to  the  query  of  J.  W. 
Sefton  Manufacturing  Company.  It  was  there  stated 
that  it  was  beyond  the  power  of  a  State  to  interfere 
with  interstate  commerce  or  prevent  the  enforcement 
of  contracts  which  are  transactions  of  interstate  com- 
merce. The  provision  of  the  Kansas  statute  construed 
by  the  court  provided  that — 

"No  action  shall  be  maintained  or  recovery  had 
in  any  of  the  courts  of  this  State  by  any  corpora- 
tion doing  business  in  this  State  without  first  ob- 
taining the  certificate  of  the  secretary  of  the  state 
that  statements  provided  for  in  his  section  have 
been  properly  made." 

In  addition,  the  statute  provided  that  a  foreign  cor- 
poration seeking  to  do  business  in  the  State  should 
make  application  for  permission,  etc.  The  court,  in 
construing  these  provisions,  said : 

' '  The  only  part  of  the  statute  affecting  the  mat- 
ter now  to  be  determined  is  that  already  quoted  in 
full,  which  merely  provided  that  no  foreign  cor- 
poration doing  business  in  the  State  shall  main- 
tain an  action  in  any  of  the  courts  of  the  State 
without  furnishing  certain  information  regarding 
its  affairs.  The  restriction  is  laid,  not  upon  the 
doing  of  business,  but  upon  the  use  of  the  local 
courts.  In  Haldy  v.  Tomoor-Haldy  Company,  4 
Ohio,  Dec.,  118,  Bateman  v.  Western  Star  Milling 
Company  (Tex.  Civ.  App.),  20  S.  W.,  931,  and 
Woessner  v.  H.  T.  Cottam  &  Co.  (Tex.  Civ.  App.), 
47  S.  W.,  678,  statutes  conditionally  denying  relief 
through  the  courts  to  foreign  corporations  en- 
gaged in  interstate  commerce  were  held  to  be  un- 


448 

constitutional,  but  in  each  of  these  cases  the  stat- 
ute refused  a  remedy  because  it  was  invoked  in 
aid  of  a  right  that  accrued  while  the  corporation 
was  doing  business  without  having  met  its  require- 
ments, the  objection  running  against  the  cause  of 
action  itself.    Here  the  corporation  is  placed  under 
a  disability  to  sue  upon  any  claim  whatever,  so 
long  as  it  fails  to  make  the  statements  exacted  of 
it.    It  may  defend  itself  when  attacked,  and  may 
even  prosecute  proceedings  in  error  in  this  court 
to  review  a  judgment  rendered  against  it.    Swift 
&  Co.  v.  Platte  (Kan.),  72  Pac.,  271.    Its  contracts 
made  during  its  non-compliance  are  not  held  void. 
The  courts  do  not  take  jurisdiction  of  its  contro- 
versies and  then  determine  them  against  it  because 
of  its  past  attitude ;  they  merely  abate  the  inquiry 
until  the  required  statements  are  made." 
I  do  not  think  the  distinction  attempted  to  be  made 
by  the  Kansas  court  can  be  sustained  either  on  princi- 
ple or  authority.    While  it  is  true  that  the  State  may 
regulate  the  practice  of  its  courts,  I  do  not  think  that  it 
can  prevent  a  foreign  corporation,  engaged  solely  in 
interstate  commerce,  from  suing  in  the  courts  of  the 
State.  The  section  of  the  Kansas  statute,  above  quoted, 
is,  in  my  opinion,  misapplied  by  the  court.  It  should  be 
construed  in  connection  with  the  other  section  which 
relates  to  corporations  seeking  to  do  business  in  Kan- 
sas.   If  a  corporation  is  engaged  solely  in  interstate 
commerce,  it  is  not  doing  business  or  seeking  to  do 
business  in  Kansas,  and  therefore  the  statute  in  ques- 
tion can  have  no  application. 

It  must  be  borne  in  mind  that  the  plow  company  in 
the  above  case  was  doing  business  in  Kansas.  Although 
but  one  transaction  appeared  from  the  pleadings,  that 
transaction  was  not  of  an  " independent, "  "isolated," 
* '  occasional, "  "  incidental, "  "  accidental, "  or  "  casual ' ' 
nature,  and  the  foreign  corporation  was  held  to  be 
doing  business  in  the  State. 
The  Court  said  on  page  864: 

"Therefore,  although  a  single  act,  it  constituted 
a  doing  of  business  within  the  State  within  the 


449 

meaning  of  the  statute,  while  several  acts  of  a  dif- 
ferent nature  might  not  have  had  the  same  effect. ' ' 

To  the  extent  that  the  foreign  corporation  was  doing 
business  in  Kansas  and  therefore  could  not  maintain 
its  action,  the  case  was  correctly  decided.  Insofar  as 
the  statute  is  held  applicable  to  acts  of  interstate  com- 
merce, the  decision  is  against  the  weight  of  authority, 
and  the  construction  placed  upon  it,  in  my  opinion, 
makes  the  statute  unconstitutional.  The  statutes  have 
the  power  to  control  or  regulate  the  intrastate,  but  not 
the  interstate,  business  of  a  foreign  corporation,  even 
though  it  be  a  federal  corporation,  and  this  may  be 
done  either  by  entirely  prohibiting  it  from  doing  State 
business,  by  requiring  a  permit  for  such  business  for 
which  a  license  fee  may  be  charged,  by  requiring  the 
filing  with  State  officials  of  papers  giving  information 
as  to  the  company,  or  by  requiring  it  to  have  a  known 
place  of  business  and  an  authorized  agent  in  the  State ; 
but  the  States  may  in  no  way  abridge  the  right  of  any 
foreign  corporation  to  perform  within  the  State  acts 
of  interstate  commerce. 
7  Cyc.,  445. 

Where  a  foreign  corporation  sells  within  the  State 
there  is  no  presumption  that  the  sales  are  interstate 
commerce  transactions,  so  as  to  render  inapplicable 
such  a  statute.  Where  it  is  sought  to  defeat  an  action 
by  a  foreign  corporation  in  the  State  courts  for  the 
collection  of  money  due  it  by  a  citizen  of  the  State  upon 
the  ground  of  non-compliance  with  the  laws  regulating 
the  right  of  foreign  corporations  to  do  business  in  such 
State,  and  such  corporation  relies  upon  its  freedom 
from  any  restraints  of  local  law,  it  should  appear 
(from  the  pleadings  and  facts)  upon  what  its  claim  is 
based,  so  that  the  character  of  the  transaction  may  be 
passed  upon. 

Kent  &  Stanley  Company  v.  Tuttle,  50  Pac. 
(Mont.),  559. 

A  State  law  is  unconstitutional  and  void  which  re- 
quires a  party  to  take  out  a  license  for  carrying  on 
interstate  commerce,  no  matter  how  specious  the  pre- 
text may  be  for  imposing  it. 


450 

Crutcher  v.  Kentucky,  141  U.  S.,  47. 

It  may  be  laid  down  as  a  general  rule,  universally 
applicable  to  all  cases  arising  under  the  commerce 
clause,  that  whenever  the  taxation  of  a  commodity 
would  amount  to  a  regulation  of  commerce  so  will  the 
taxation  of  an  inseparable  incident  or  necessary  con- 
comitant of  such  commodity. 

Erie  Railroad  Company  v.  State,  31  N.  J.  L., 
531. 

The  State  of  Kansas  cannot  tax  a  sale  made  which 
is  a  transaction  of  interstate  commerce.  The  power 
of  collecting  the  proceeds  of  such  a  sale  in  the  local 
courts  is  a  necessary  concomitant  of  the  right  to  sell. 
If  the  amount  be  less  than  two  thousand  dollars  the 
Federal  court  has  ordinarily  no  jurisdiction.  Conse- 
quently the  remedy  is  in  the  State  courts,  or  there  is  no, 
remedy.  The  denial  of  the  use  of  the  State  courts  is  a 
burden  placed  upon  interstate  commerce,  and  States 
cannot,  by  legislation,  place  burdens  upon  commerce 
with  foreign  nations  or  among  the  several  States.  The 
decisions  go  to  tha.t  extent,  and  their  soundness  is  not 
questioned. 

Sherlock  v.  Ailing,  93  U.  S.,  99,  102. 

The  Court  admits  that,  "The  contention  that  the 
statute  in  question  is  not  to  be  construed  as  applying 
to  foreign  corporations  engaged  wholly  in  interstate 
commerce  finds  some  support  in  the  authorities.  * 
Such  of  them  as  hold  that,  properly  interpreted,  the 
statutes  do  not  apply  to  corporations  engaged  in  inter- 
state commerce,  reach  that  conclusion  only  by  a  vigor- 
ous application  of  the  principle  that,  if  possible,  a  con- 
struction should  be  adopted  that  will  avoid  interference 
with  the  Federal  Constitution." 

Interference  with  the  Federal  Constitution  must  be 
avoided,  but  it  was  never  intended,  in  conferring  upon 
Congress  the  regulation  of  commerce,  to  cut  the  States 
off  from  legislating  on  all  subjects  relating  to  the 
health,  life  and  safety  of  the  citizens,  though  the  legis- 
lation might  indirectly  affect  the  commerce  of  the  coun- 
try. 

Sherlock  v.  Ailing,  supra. 


The  Court  relies  upon  its  former  decision  in  State 
ex  rel.  v.  Book  Company,  65  Kas.,  847,  69  Pac.,  563,  as 
upholding  the  theory  that  the  requirements  of  the  act 
are  not  burdens  upon  commerce,  but  measures  of  pro- 
tection to  the  people  of  the  State.  In  that  case  the 
Court  said: 

1 '  The  claim  that  because  the  defendant  company 
is  engaged  in  interstate  trade  it  cannot  be  sub- 
jected to  the  regulations  of  the  statute  of  1898  is 
untenable.    It  may  be  that  it  cannot  be  excluded 
from  doing  interstate  business  here,  but  it  can  be 
laid  under  such  reasonable  conditions  as  the  filing 
of  its  charter,  the  payment  of  charter  fees,  the 
making  of  reports  and  furnishing  of  information 
concerning  its  business,  the  appointment  of  agents 
to  receive  services  of  process,  etc.    These  are  not 
burdens  on  commerce.   They  are  measures  of  jus- 
tice and  protection  to  the  people  of  the  State. ' ' 
Here  the  corporation  was  "seeking  to  do  business 
in  the  State,"  and  had  actually  done  business  in  the 
State.     The  decision  in  this  case,  like  the  one  under 
discussion,  was  probably  correctly  decided  on  its  own 
facts,  but  the  opinion  foreshadows  the  attempted  dis- 
tinction of  the  later  case. 

The  distinction  that  the  restriction  is  laid  not  upon 
the  doing  of  business  but  upon  the  use  of  the  courts 
is  based  upon  a  sub-distinction  that  the  foreign  cor- 
poration may  use  the  courts  as  a  defendant.  "It  may 
defend  itself  when  attacked,"  says  the  Court,  "and 
may  even  prosecute  proceedings  in  error  in  this  court 
to  review  a  judgment  rendered  against  it."  That  is, 
it  may  do  those  things  that  a  defendant  may  do.  It  is 
qualified  as  a  defendant  not  through  comity  toward  it, 
but  as  a  measure  of  protection  to  the  people  of  the 
State.  If  the  citizens  of  Kansas  may  sue  it,  and  if 
it  is  without  redress  in  collecting  debts  due  it  from 
them,  it  is  hard  to  imagine  a  more  effective  barrier  to 
interstate  commerce. 

The  Court  brushes  aside  Haldy  v.  Tomoor-Baldy 
Co.,  4  Ohio  Dec.,  118,  and  Bateman,  etc.,  Co.  v.  Western, 
etc.,  Milling  Co.,  20  S.  W.,  931  (both  cited  by  me  in  the 


452 

former  opinion),  as  well  as  Woessner  v.  H.  T.  Cottam 
&  Co,,  47  S.  W.,  678,  as  not  furnishing  the  rule  here 
for  the  reason  that  "in  each  of  these  cases  the  statute 
refused  a  remedy  because  it  was  invoked  in  aid  of  a 
right  that  accrued  while  the  corporation  was  doing 
business  without  having  met  its  requirements,  the 
objection  running  against  the  cause  of  action  itself. 
Here  the  corporation  is  placed  under  a  disability  to  sue 
upon  any  claim  whatever,  so  long  as  it  fails  to  make  the 
statements  exacted  of  it." 

In  Haldy  v.  Tomoor-  Haldy  Co.,  supra,  the  Ohio  court 
said: 

"The  business  done  here  was  interstate  com- 
merce, and  the  provisions  in  our  statute  that  no 
foreign  corporation,  unless  it  complies  with  cer- 
tain State  regulations  (to  file  certain  papers), 
shall  have  the  right  to  transact  such  business,  as 
that  if  it  does  it  shall  not  be  allowed  to  maintain 
an  action  with  reference  to  the  same,  are  null  and 
void,  because  in  violation  of  the  commerce  clause 
of  the  Federal  Constitution.  These  propositions 
are  so  well  settled  by  the  authorities  that  any  fur- 
ther discussion  of  the  principles  there  declared  is 
entirely  unnecessary." 

In  Bateman  v.  Western,  etc.,  Milling  Co.,  supra,  the 
Texas  Court  of  Appeals  held  that  the  statute  requiring 
foreign  corporations  to  file  their  articles  of  incorpora- 
tion as  a  condition  precedent  to  transacting  business 
or  maintaining  an  action  in  that  State,  had  no  applica- 
tion to  foreign  corporations  engaged  in  purely  inter- 
state commerce.  That  Court  said : 

"The  principle  is  well  established  and  it  rests 
purely  within  the  discretion  of  a  State  to  recognize 
or  to  repudiate  a  foreign  corporation ;  that  it  can, 
if  such  be  its  pleasure,  exclude  such  a  corporation 
entirely,  or  admit  it  conditionally.  This  principle, 
however,  is  not  of  universal  application.  A  very 
emphatic  and  well-fixed  instance  in  which  it  does 
not  obtain  is  where  a  foreign  corporation  is 
engaged  in  interstate  or  foreign  commerce." 
To  the  same  effect  are  the  decisions  of  the  Supreme 


453 

Court  of  Alabama  in  Ware  v.  Shoe  Co.,  9  So.  Rep.,  136, 
and  of  the  Supreme  Court  of  New  Mexico  in  Manufac- 
turing Co.  v.  Hardee,  16  Pac.  Rep.,  605. 

Woessner  &  Cottam,  supra,  is  distinguished  by  the 
Kansas  Court  in  the  light  that  the  Texas  statute  denied 
the  corporation  (on  failure  to  pay  a  franchise  tax) 
the  right  "to  sue  or  defend"  in  any  of  the  courts  of  the 
State.  The  point  is  not  well  taken  that  the  Kansas 
statute  as  applied  by  the  Supreme  Court  of  that  State, 
differs  in  principle  from  the  statute  in  the  case  last 
cited,  and  that  it  places  no  burden  on  commerce  because 
the  corporation  may  defend  (citing  Swift  v.  Platee,  72 
Pac.,  270).  Although  invited  so  to  do  by  the  text  of 
the  Texas  statute,  the  Court  of  Appeals  did  not  sep- 
arate the  capacity  to  sue  from  the  capacity  to  defend. 
It  held  squarely,  "Insofar  as  the  statute  in  question 
relates  to  interstate  commerce  it  is  void  and  cannot  be 
enforced. ' ' 

The  Supreme  Court  of  Kansas  confuses  two  powers, 
viz. :  The  control  of  commerce  and  the  control  of  cor- 
porations. 

The  facts  of  Ashley  v.  Ryan,  49  0.  State,  504,  cited 
by  the  Kansas  court,  were  different  toto  coelo  from 
a  mere  act  of  interstate  commerce  by  a  foreign  cor- 
poration. In  Ashley  v.  Ryan  the  real  question  was  of 
the  grant  of  the  right  to  be  a  corporation.  A  foreign 
corporation  engaged  in  interstate  commerce  sought  to 
avail  itself  of  a  privilege  of  consolidation  with  an  Ohio 
corporation  under  Ohio  statutes,  without  paying  the 
usual  fees,  on  the  ground  that  the  fees  were  a  tax  on 
interstate  commerce,  and  the  Ohio  court  very  properly 
held  that  the  State  was  under  no  duty  to  create  agencies 
of  any  kind  for  the  facilitating  of  interstate  commerce. 
The  Supreme  Court  of  the  United  States,  153  U.  S., 
436,  in  affirming  that  decision,  held  that  it  was  not  a 
question  of  State  regulation  of  interstate  commerce, 
but  a  question  of  the  right  of  the  state  "to  determine 
upon  what  conditions  its  law  as  to  the  consolidation  of 
corporations  may  be  availed  of." 

The  Kansas  court  paraphrases  the  language  of 
Ashley  v.  Ryan,  as  follows : 


454 

"The  question  here  is  not  the  power  of  the 
State  of  Kansas  to  lay  a  charge  on  interstate  com- 
merce within  its  confines,  but  simply  the  right  of 
the  State  to  determine  upon  what  condition  its 
laws  as  to  the  enforcement  of  rights  through  its 
courts  may  be  availed  of. ' ' 

In  my  opinion  the  courts  are  not  ejusdem  generis 
or  in  the  same  category  with  the  instrumentalities  and 
agencies  the  use  of  which  a  State  is  under  no  duty  to 
extend  to  interstate  commerce.  If  interstate  commerce 
is  privileged  its  necessary  corollary,  the  right  to  sue 
for  the  proceeds  of  interstate  sales  is  also  privileged. 
The  right  to  sue  is  a  property  right  essential  to  the 
enjoyment  of  property.  Where  a  State  conceded  the 
right  to  defend,  it  only  half  meets  the  requirements  of 
the  14th  Amendment  to  the  United  States  Constitution. 
It  is  a  deprivation  of  property  without  due  process  of 
law  where  the  disqualification  to  sue  grows  out  of  the 
failure  to  do  that  which  the  State  has  no  power  to  exact. 
"  It  is  now  settled  that  corporations  are  persons  within 
the  meaning  of  the  constitutional  provision  forbid- 
ding the  deprivation  of  property  without  due  process 
of  law,  as  well  as  a  denial  of  the  equal  protection  of 
the  law." 

Covington,  etc.,  Co.  v.  Sanford,  164  U.  S.,  578. 
The  State  has  power  of  course  to  regulate  the  prac- 
tice of  its  courts.  "The  statute,"  says  the  Kansas 
court,  ' '  merely  provided  that  if  they  wish  to  make  use 
of  the  machinery  of  the  State  courts  for  their  own  bene- 
fit they  must  do  so  upon  the  same  terms  as  other  cor- 
porate suitors."  That  is,  they  must  strip  themselves 
of  their  Federal  immunity  and  by  accepting  the  ' '  same 
terms"  waive  the  very  point  in  dispute. 

Where  the  foreign  corporation  is  seeking  to  do  busi- 
ness in  the  State,  a  statute  that  requires  as  a  condition 
precedent  the  surrender  of  a  right  or  privilege  secured 
by  the  Constitution  and  laws  of  the  United  States  is 
unconstitutional  and  void. 

Southern   Pacific   Company   v.    Dent  on,    146 

U.  S.,  202. 
Smith  v.  Ames,  169  U.  S.,  466,  526. 


455 

Ins.  Co.  v.  Morse,  20  Wall.,  445. 

Barren  v.  Burnside,  121  U.  S.,  186. 

Tex.  Land,  etc.,  Co.  v.  Worsham,  13  S.  W. 

Rep.,  384  (Texas). 

In  Land  Co.  v.  Worsham,  the  corporation  was  organ- 
ized under  the  laws  of  the  Kingdom  of  Great  Britain 
and  Ireland.  The  Texas  statute  provided  that  removal 
of  a  cause  to  a  Federal  court  should  forfeit  the  permit 
to  do  business.  The  Court  said : 

"We  do  not  think  that  failure  of  the  corporation 
to  procure  a  permit,  even  if  such  failure  had  the 
effect  of  preventing  it  from  further  prosecuting 
its  business  in  this  State,  should  have  the  further 
effect  of  closing  the  courts  of  the  State  to  it  so 
as  to  preclude  it  from  asserting  rights  and  recover- 
ing property  already  acquired." 

In  Kindel  v.  Beck  &  Pauli  Lithographing  Co.,  35  Pac., 
538,  where  the  lithographing  company,  a  foreign  cor- 
poration, brought  suit  on  a  contract,  the  Colorado 
Supreme  Court  said : 

"The  first  defense  is  based  upon  the  failure  of 
appellant,  a  corporation  organized  under  the  laws 
of  another  State,  but  doing  business  in  this  State, 
to  file  a  certificate  as  required  by  Section  10, 
Article  XV,  Constitution,  and  by  Sections  399,  500, 
Mills'  Ann.  St.  Although  by  such  failure  all  offi- 
cers, agents  and  stockholders  of  the  company  sub- 
ject themselves  to  certain  personal  liabilities,  it 
is  no  defense  to  the  present  action.  In 

this  case  appellee  contracted  to  make  the  calendars 
at  its  place  of  business  in  Wisconsin,  and  to  de- 
liver them  to  appellant  in  Colorado.  To  give  the 
State  Constitution  and  statutes  the  construction 
claimed  by  appellant  would  be  to  permit  a  State 
to  regulate  commerce  between  the  States,  author- 
ity for  which  is  conferred  exclusively  upon  Con- 
gress." 

In  Erie  Ey.  Co.  v.  The  State,  supra,  the  Court  said : 
"A  statute  that  should  abolish  the  rule  of  com- 
ity, and  should  refuse  a  recognition  of  foreign 
corporations,  would,  it  is  conceived,  have  this  ef- 


456 

feet  and  no  more,  i.  e.,  to  convert  the  foreign  cor- 
porators, as  to  the  State  enacting  the  supposed 
law,  into  a  partnership  of  individuals;  and  thus, 
although  the  corporation  as  such  could  not,  by 
suit  or  otherwise,  assert  its  rights  to  protect  its 
property,  the  members  of  the  company  would  be 
under  disability. ' ' 

Chief  Justice  Ryan,  in  Charter  Oak  Life  Ins.  Co.  v; 
Sawyer,  44  Wis.,  388,  said : 

"It  would  be  intolerable  injustice  if  a  creditor 
corporation  in  one  State  could  not  sue  its  debtor 
in  another.  Such  corporations,  denied  judicial 
process  against  their  debtors  in  the  courts  of  their 
debtors'  domicile,  might  well  exclaim,  as  Chan- 
cellor Kent  (quoting  the  Aeneid),  I  think,  once 
said:  Quod  genus  hoc  hominum?  Quaeve  hunc 
tarn  barbara  morem  permittit  patria.  Hospitw 
prohibemur  arenae." 

Conclusive,  in  my  opinion,  of  the  unsoundness  of  the 
Kansas  decision  is  McNaughton  Co.  v.  McGirl,  49  Pac., 
651  (cited  in  my  prior  opinion),  where  the  Supreme 
Court  of  Montana  held  the  provisions  of  the  Montana 
foreign  corporation  statute  inapplicable  to  a  purely 
interstate  corporation.  In  that  case  the  Court  said : 

"We  are  aware  that  the  construction  put  upon 
section  2,  Article  IV  of  the  constitution  of  the 
United  States,  which  provided  that  the  citizens 
of  each  State  shall  be  entitled  to  all  privileges  and 
immunities  of  the  citizens  of  the  several  states, 
has  been  generally  uniform,  to  the  effect  that  the 
language  of  that  clause  relates  only  to  natural  per- 
sons, and  not  to  artificial  bodies,  as  corporations, 
and  that  the  privileges  and  immunities  guaranteed 
by  the  language  referred  to  mean  those  of  the  gen: 
eral  nature  granted  to  a  State's  own  citizens,  and 
not  those  special  privileges  conferred  upon  cor- 
porate bodies.  (Citing  authorities.)  But  in  the 
carrying  on  of  interstate  commerce,  corporations 
are  guaranteed  the  same  rights  and  are  entitled 
to  the  same  protection  as  individuals.  The  Su- 


457 

preme  Court  in  Gloucester  Ferry  Company  v. 
State  of  Pennsylvania,  114  U.  S.,  204,  5  Sup.  Ct., 
826,  expressly  held  that  it  did  not  make  any  differ- 
ence whether  such  commerce  is  carried  on  by  in- 
dividuals or  by  corporations.  Justice  Bradley,  sit- 
ting on  the  circuit  bench,  in  the  case  ofStockton  v. 
Railroad  Company,  32  Fed.,  9,  used  the  following 
language :  '  And  in  carrying  on  foreign  and  inter- 
state commerce,  corporations  equally  with  indi- 
viduals are  within  the  protection  of  the  commer- 
cial power  of  Congress,  and  cannot  be  molested  in 
another  State  by  state  burdens  or  impediments. 
This  was  held  and  decided  in  the  case  of  Glouces- 
ter Ferry  Company  v.  State  of  Pennsylvania,  114 
U.  S.,  204,  5  Sup.  Ct.,  825,  and  affirmed  in  the  re- 
cent case  of  Philadelphia  &  Southern  S.  S.  Co.  v. 
Pennsylvania,  122  U.  S.,  326,  7  Sup.  Ct.,  1118;  and 
although  the  decision  in  Paul  v.  Virginia,  8  Wall., 
168,  conformed  to  the  doctrine  of  Bank  v.  Earle, 
the  following  striking  language  was  used  by  the 
court,  to-wit:  "At  the  time  of  the  formation  of 
the  constitution  a  large  part  of  the  commerce  of 
the  world  was  carried  on  by  corporations.  The 
East  India  Company,  the  Hudson  Bay  Company, 
the  Hamburgh  Company,  the  Levant  Company  and 
the  Virginia  Company  may  be  named  among  the 
many  corporations  then  in  existence  which  ac- 
quired from  the  extent  of  their  operations,  celeb- 
rity throughout  the  commercial  world.  This  state 
of  facts  forbids  the  supposition  that  it  was  in- 
tended, in  the  grant  of  power  to  Congress,  to  ex- 
clude from  its  control  the  commerce  of  corpora- 
tions. The  language  of  the  grant  makes  no  refer- 
ence to  the  instrumentality  by  which  commerce 
may  be  carried  on.  It  is  general,  and  included 
alike  commerce  by  individuals,  partnerships,  asso- 
ciations and  corporations."  We  may  fairly  sup- 
plement this  language  by  adding  that,  when  the 
constitution  was  adopted  it  could  not  have  been 
supposed  that  the  relations  of  commerce  to  be 
made  by  Congress  might  be  of  no  avail  to  commer- 


458 

cial  corporations,  or  at  least  might  be  rendered 
nugatory,  with  regard  to  them,  in  consequence  of 
State  restrictions  upon  their  power  to  act  as  cor- 
porations in  any  other  State  than  that  of  their 
origin.'  We  may  therefore  proceed  with  the  in- 
vestigation of  the  case,  relying  upon  the  truth  of 
the  proposition  that,  if  the  transactions  between 
the  plaintiff  and  the  defendant  in  this  case  were 
commerce  between  the  several  States,  Congress 
alone  could  regulate  such  commerce  under  the  con- 
stitution of  the  United  States,  and  the  State  had 
no  power  to  regulate  that  commerce,  or  impose  any 
obligation  or  exaction  upon  the  plaintiff  which  it 
could  not  impose  or  exact  upon  an  individual  tran- 
sacting the  same  business. 

The  argument  that  a  foreign  corporation  has  its 
domicile  in  the  State  from  which  it  derives  its  ex- 
istence, and  that  its  right  to  transact  business  else- 
where, and  to  enforce  its  contracts  made  in  other 
States,  depends  purely  upon  the  comity  of  those 
States,  is  not  pertinent.  The  power  of  a  State 
to  make  discriminations  in  privileges  granted 
to  foreign  corporations  may  be  exercised  where 
a  foreign  corporation  desires  to  do  business  with- 
in the  limits  of  the  State,  not  strictly  interstate  or 
foreign  commerce. 

No  construction  can  be  put  upon  the  statute  of 
Montana  which  would  render  such  a  contract  void 
without  invading  the  exclusive  right  of  Congress. 
If,  therefore,  this  contract  sued  upon  was  lawfully 
made,  notwithstanding  a  statute  which  declares  or 
attempts  to  declare  it  void,  it  follows  that  any 
legislation  of  the  State  which  seeks  to  prevent  the 
enforcement  of  the  contract  is  equally  an  invasion 
of  the  exclusive  right  of  Congress.  It  must  be 
true  that  if  the  State  cannot  declare  the  contract 
void,  it  cannot  prevent  the  enforcement  of  the 
contract." 

I  am  of  the  opinion,  therefore,  that  the  decision  in 
the  particular  case  was  probably  correct,  viz.:  That 
the  plaintiff  in  the  particular  case  was  doing  business 


459 

in  Kansas,  and  on  that  account  could  not  maintain  its 
action,  but  insofar  as  the  decision  holds  that  a  for- 
eign corporation  engaged  solely  in  interstate  commerce 
cannot  maintain  an  action  in  the  courts  of  the  States, 
it  is  unsound.  Nevertheless,  it  is  the  law  of  Kansas 
unless  reversed  by  the  court  which  rendered  it,  or  by 
the  Supreme  Court  of  the  United  States.  Of  course,  if 
the  amount  of  two  thousand  dollars  is  involved,  the 
matter  can  be  adjudicated  in  the  Federal  courts,  where 
the  State  decision  will  not  be  binding. 

NOTE: — See,  also,  the  opinion  of  April  20,  1907,  for  the  Electric 
Appliance  Co.  in  reference  to  the  foreign  corporation  law  of  South 
Dakota  and  as  to  the  advisability  of  compliance  therewith  in  view  of  the 
decisions  of  the  South  Dakota  courts ;  the  South  Dakota  courts  having 
followed  the  Kansas  case  of  Deere  v.  Wyland,  above  referred  to. — Ed. 


WHETHER  MANUFACTURER  OR  DEALER  IS  LIABLE   FOR  DAM- 
AGES WHEN  GOODS  ARE  INCORRECTLY  LABELED. 

(George  E.  Watson  Company,  August  18,  1904.) 

"We  handle  a  line  of  varnishes  of  different  color 
put  up  in  sealed  cans  and  labeled  by  another  manu- 
facturer. We  sold  a  customer  a  gallon  of  these 
goods  supposed  to  be  of  a  green  color,  and  so  la- 
beled. He  sent  them  to  a  contractor  who  was  fin- 
ishing some  woodwork  for  him  and  told  him  to  use 
these  goods.  The  contractor  did  so,  but  it  de- 
veloped on  opening  the  can,  that  the  goods  were 
labeled  wrong  and  that  they  contained  a  brown  col- 
ored varnish  instead  of  green.  The  contractor 
stained  and  varnished  the  woodwork  with  the 
brown  material  and  our  customer  claims  damages 
from  us  on  account  of  the  can  being  labeled  wrong. 
We  contend  that  if  there  is  any  responsibility  at- 
tached, it  is  to  the  manufacturer  and  not  to  the 
party  who  sold  the  goods. ' ' 

As  I  understand  the  facts,  from  the  above  and  other 
correspondence  sent  me,  the  manufacturer  labels  his 
cans,  numbering  them  to  correspond  with  a  sample 
board  furnished  the  dealer;  the  dealer  sold  the  stain 
in  question  from  the  sample  board  marked  with  the 


same  name  and  number  as  the  can.    The  stain  has  no 
resemblance  to  the  sample  board. 

Where  the  manufacturer  carelessly  labels  an  article 
that  is  dangerous  in  itself,  he  is  liable  in  tort,  aside 
from  any  question  of  contract : 
Pollock  on  Torts,  p.  413. 
Sutherland  on  Damages,  p.  77. 

In  this  instance  no  action  of  tort  will  lie  against  the 
manufacturer  at  the  suit  of  the  consumer,  for  a  breach 
of  a  general  duty  to  the  community  at  large  imposed 
by  the  nature  of  the  article  itself,  the  stain  being  in 
and  of  itself  not  dangerous.  The  manufacturer  is  not, 
therefore,  in  the  position  of  one  who  has  unchained  a 
dangerous  agency  without  notice  of  its  dangerous  char- 
acter, nor  does  it  appear  that  the  can  of  varnish  was 
fraudulently  labeled.  Nor  is  there  any  contract  liability 
of  the  manufacturer  to  the  consumer. 

There  is  privity  of  contract  between  the  dealer  and 
the  consumer  and  again  between  the  dealer  and  the 
manufacturer,  but  none  between  the  consumer  and  the 
manufacturer.  The  consumer,  if  himself  free  from 
negligence,  has  an  action  against  the  dealer  for  the 
damages  actually  sustained.  The  dealer  can  in  turn 
recover  his  damages  from  the  manufacturer. 


RIGHT  OF  THE  WISCONSIN  FOOD  COMMISSIONER  TO  PROHIBIT 
THE  SALE  OF  LEMON  EXTRACT  WHICH  IS  NOT  EQUAL  TO 
THE  STANDARD  FIXED  BY  THE  FOOD  COMMISSIONER  WHERE 
THE  LABEL  ON  THE  BOTTLE  IN  WHICH  THE  EXTRACT  IS 
CONTAINED  TRULY  STATES  THE  INGREDIENTS. 

(Illinois  Mfrs.  Assn.,  October  5, 1904.) 
The  Food  Commissioner  of  the  State  of  Wisconsin 
has  made  a  ruling  in  reference  to  lemon  extracts  as  fol- 
lows: 

"Extracts. — Artificial  extracts  can  be  manufac- 
tured and  sold  only  in  cases  where  it  is  not  possible 
to  produce  an  extract  from  the  fruit  itself.  Ex- 
tracts of  this  class  must  be  distinctly  labeled  as 
' 'Artificial  Extracts.' 


461 

Extract  of  lemon,  essence  of  lemon  or  spirits  of 
lemon,  sold  as  such,  must  contain  at  least  five  per 
cent,  of  the  pure  oil  of  lemon  dissolved  in  ethyl 
alcohol. 

Such  mixtures  or  compounds  as  'water  soluble 
lemon  flavor'  or  'terpeneless  lemon  flavor,'  made 
from  lemon  peel  or  from  oil  of  lemon,  or  both, 
must  not  be  sold  as  'extract  of  lemon'  or  'essence 
of  lemon'  or  'spirits  of  lemon';  but  if  of  equiva- 
lent strength  and  labeled,  branded  or  tagged  in 
a  manner  showing  their  exact  character  and  com- 
position and  approved  by  the  dairy  and  food  com- 
missioner of  the  state,  and  not  containing  any  pois- 
onous or  deleterious  ingredients  will  be  recognized 
as  legitimate  substitutes  and  when  sold  as  articles 
of  food  under  their  own  distinct  names  as  stated 
above  and  not  under  the  name  of  any  other  arti- 
cle of  food,  such  sale  will  not  be  contested  by  this 
commission  as  unlawful." 

The  laws  of  Wisconsin  under  the  authority  of  which 
the  above  ruling  has  been  made,  provide : 

"Sale  of  Adulterated  Articles;  Definitions.  (Sec- 
tion 4600,  Statutes  of  1898.)  Any  person  who  shall, 
by  himself,  his  servant  or  agent,  or  as  the  servant 
or  agent  of  any  other  person,  sell,  exchange,  de- 
liver or  have  in  his  possession  with  intent  to  sell, 
exchange,  offer  for  sale  or  exchange  any  drug  or 
article  of  food  which  is  adulterated,  shall  be  fined 
not  less  than  twenty-five  dollars  nor  more  than  one 
hundred  dollars  or  be  imprisoned  in  the  county 
jail  not  less  than  thirty  days  nor  more  than  four 
months.  The  term  'drug,'  as  used  in  this  section, 
shall  include  all  medicines  for  internal  or  external 
use,  antiseptics,  disinfectants  and  cosmetics.  The 
term  'food',  as  used  herein,  shall  include  all 
articles  used  for  food  or  drink  by  man,  whether 
simple,  mixed  or  compound. 

Adulteration,  what  Is.  (Section  4601,  statutes 
of  1898,  as  amended  by  Chapter  133,  Laws  of 
1903.)  An  article  shall  be  deemed  to  be  adulterated 
within  the  meaning  of  the  preceding  section : 


462 

1.  In  the  case  of  drugs:  First,  if,  when  sold 
under  or  by  a  name  recognized  in  the  United  States 
pharmacopoeia,  it  differs  from  the  standard  of 
strength,  quality  or  purity  laid  down  in  the  latest 
current  edition  thereof ;  second,  if  when  sold  under 
or  by  a  name  not  recognized  in  said  pharmaco- 
poeia, but  which  is  found  in  the  pharmacopoeia  of 
some   other  country,   the   national  formulary  or 
other  standard  work  on  materia  medica,  it  differs 
materially  from  the  standard  of  strength,  quality 
or  purity  laid  down  in  the  latest  current  edition  of 
such  work ;  third,  if  its  strength,  quality  or  purity 
falls  below  the  professed  standard  under  which  it 
is  sold. 

2.  In  the  case  of  food :    First,  if  any  substance 
or  substances  have  been  mixed  with  it,  so  as  to 
lower    or    depreciate    or    injuriously    affect    its 
strength,  quality  or  purity;  second,  if  any  infe- 
rior or,  cheaper  substance  or  substances  have  been 
substituted  wholly  or  in  part  for  it;  third,  if  any 
valuable  or  necessary  ingredient  has  been  wholly 
or  in  part  abstracted  from  it;  fourth,  if  it  is  an 
imitation  of,  or  sold  under  the  name  of  another 
article;  fifth,  if  it  consists,  wholly  or  in  part,  of  a 
diseased,  infected,  decomposed,  putrid,  tainted  or 
rotten  animal  or  vegetable  substance  or  article, 
whether  manufactured  or  not;  sixth,  if  it  is  col- 
ored, coated,  polished  or  powdered,  whereby  dam- 
age or  inferiority  is  concealed,  or  if  by  any  means 
it  is  made  to  appear  better  or  of  greater  value  than 
it  really  is;  seventh,  if  it  contains  any  added  sub- 
stance or  ingredient  which  is  poisonous,  injurious. 
or  deleterious  to  health,  or  any  deleterious  sub- 
stance not  a  necessary  ingredient  in  its  manufac- 
ture; 

Provided,  that  articles  of  food  which  are  labeled, 
branded  or  tagged  in  a  manner  showing  their  exact 
character  and  composition  and  approved  by  the 
dairy  and  food  commissioner  of  the  state,  and  not 
containing  any  poisonous  or  deleterious  ingredient, 
shall  not  be  deemed  adulteration  in  the  case  of  mix- 


463 

tures  or  compounds  sold  under  their  own  distinct 
names  or  under  coined  names  and  which  articles, 
if  substitutes,  are  not  in  imitation  of,  or  sold  under 
the  name  of  any  other  article  of  food;  and 

Provided,  further,  that  nothing  in  this  act  shall 
be  construed  as  requiring  or  compelling  proprie- 
tors or  manufacturers  of  proprietary  foods  to  dis- 
close their  trade  formulas,  except  so  far  as  may  be 
necessary  to  secure  freedom  from  adulteration, 
imitation  or  fraud." 
The  sample  of  the  extract  of  lemon  here  in  question 

was  submitted  to  the  Food  Commissioner  for  analysis. 

The  analysis  showed: 

% 

"  Total  residue    0.18 

Alcohol  (by  wt.) 28.0 

Lemon  oil  trace 

Color    none 

It  was  ruled  that  the  extract  was  not  a  true  extract 
of  lemon. 

My  opinion  is  asked  upon  the  foregoing  facts  as 
to  whether  or  not  the  Food  Commissioner  of  Wisconsin 
has  the  power  to  prohibit  the  sale  of  an  extract  similar 
to  that  analyzed  and  sold  under  the  name  of  "  extract 
of  lemon"  and  which  extract  is  not  equal  to  the  stand- 
ard fixed  by  the  Food  Commissioner,  in  a  case  where 
the  bottle  in  which  the  extract  is  contained  truly  states 
the  ingredients  thereof.  It  is  an  important  part  of  my 
premises  that  I  am  assuming  that  the  sample  in  ques- 
tion was  "an  inferior  or  cheaper  substance." 

As  a  general  rule  a  lawful  article  of  commerce  can- 
not be  wholly  excluded  from  importation  into  a  state 
from  another  state.  A  state,  however,  has  the  right, 
under  its  police  power,  to  regulate  the  introduction 
of  any  article  of  food  so  as  to  insure  the  purity  of 
the  article. 

Schollenberger  v.  Pennsylvania,  171  IT.  S.,  1, 

and  cases  there  cited. 

The  state  has  the  right  to  prohibit  the  sale  of  articles 
of  food  which  are  adulterated,  or  of  articles  sold  under 
a  false  designation  or  name.  The  purpose  of  such 


464 

law  is  to  protect  the  health  and  prevent  the  decep- 
tion of  the  public.  It  is  a  clear  exercise  of  police 
power. 

The  present  law  does  not  fix  any  particular  standard 
for  "extract  of  lemon."  It  prohibits  adulteration  of 
any  food  product.  The  standard  has  been  fixed  by  the 
Food  Commissioner  of  the  state,  and  I  assume  fixed  in 
accordance  with  the  standard  stated  in  the  United 
States  pharmacopoeia.  If  the  article  sold  is  not  adul- 
terated, within  the  meaning  of  Section  4601  above 
quoted,  the  commissioner's  action  is  futile  and  the 
sale  of  extracts  below  that  standard  is  not  unlawful 
and  cannot  be  prohibited.  I  understand,  however, 
that  "extract  of  lemon"  or  "essence  of  lemon"  is 
defined  in  the  United  States  pharmacopoeia,  and  that 
the  formula  there  given  is  the  same  as  that  adopted  by 
the  Food  Commissioner.  By  that  formula  it  appears 
that  it  is  necessary  to  have  five  per  cent,  of  lemon  oil  in 
the  lemon  extract,  and  a  sufficient  quantity  of  alcohol 
to  cut  or  dissolve  the  oil. 

In  People  v.  Jennings,  94  N.  W.,  216,  the  Supreme 
Court  of  Michigan  passed  upon  a  law  precisely  similar 
to  the  Wisconsin  law  under  consideration.  (The  pres- 
ent law  is  evidently  taken  from  the  Michigan  law.) 
The  defendant  was  convicted  of  selling  a  compound 
as  a  lemon  extract  which  was  adulterated  within  the 
meaning  of  the  law.  The  defense  was  that  one  of  the 
properties  of  the  lemon  oil,  viz.,  terpenes,  had  been 
extracted  therefrom  for  the  betterment  of  the  extract, 
and  that  the  article  sold  was  in  fact  an  improvement 
in  extract  of  lemon.  The  first  question  passed  upon 
by  the  court  was  whether  the  pharmacopoeia  formula 
was  to  be  considered  as  defining  lemon  extract.  The 
court  said  (p.  218) : 

"The  statute  defining  what  shall  be  deemed 
adulteration,  so  far  as  it  relates  to  this  case, 
declares  that  an  article  shall  be  deemed  adulterated 
when :  '  First,  if  any  substance  or  substances  have 
been  mixed  with  it,  so  as  to  lower  or  depreciate 
or  injuriously  affect  its  quality,  strength  or  purity ; 
second,  if  any  inferior  or  cheaper  substance  or  sub- 


465 

stances  have  been  substituted  wholly  or  in  part  for 
it ;  third,  if  any  valuable  or  necessary  constituent 
or  ingredient  has  been  wholly  or  in  part  abstracted 
from  it ;  fourth,  if  it  is  an  imitation  of,  or  is  sold 
under  the  name  of  another  article ;  *  *  sixth,  if 
it  is  colored,  coated,  polished  or  powdered  whereby 
damage  or  inferiority  is  concealed,  or  if  by  any 
means  it  is  made  to  appear  better  or  of  a  greater 
value  than  it  really  is ;  seventh,  if  it  contains  any 
added  substance  or  ingredient  -which  is  poison- 
ous or  injurious  to  health.'  Comp.  Laws.  Sec.  5012. 
We  are  agreed  with  the  circuit  judge  that  in 
referring  to  articles  of  food,  and  to  protect  the 
users  thereof,  the  legislature  must  have  had  in  view 
some  standard ;  and,  as  lemon  essence  or  lemon  ex- 
tract had  heretofore  acquired  a  well-defined  mean- 
ing, we  incline  to  the  view  that  it  is  proper  to  re- 
sort to  the  pharmacopoeia  formula  for  the  purpose 
of  determining  ivhat  lemon  extract  consists  of." 
The  court  then  held  that  it  was  open  to  manufac- 
turers to  improve  an  article  of  food  so  long  as  no 
infringement  of  the  law  takes  place.  On  this  point  the 
court  said : 

"According  to  the  proofs  offered  by  the  defend- 
ant, it  is  very  clear  in  the  present  case  no  substance 
or  substances  have  been  mixed  with  this  extract 
so  as  to  lower  or  depreciate  or  injuriously  affect 
its  quality,  strength  or  purity. ' ' 
Upon  the  question  of  adulteration  the  court  said : 

"As  to  the  second  condition,  which  amounts  to 
adulteration,  the  case  is  not  so  clear.  This  pro- 
vides that,  if  any  inferior  or  cheaper  substance 
or  substances  have  been  substituted  wholly  or  in 
part  for  it,  it  shall  amount  to  adulteration.  We 
think,  however,  this  provision  should  be  read  in 
connection  with  the  succeeding  one,  to  wit,  'if  any 
valuable  or  necessary  constituent  or  ingredient  has 
been  wholly  or  in  part  abstracted  from  it.'  So 
construed,  the  provision  prohibiting  the  substitu- 
tion of  any  inferior  or  cheaper  substance,  wholly 
or  in  part,  for  it,  means  the  substitution  for  an 


466 

essential  ingredient  of  such  cheaper  or  inferior 
substance.  Now,  if  it  be  a  fact,  as  the  testimony  on 
the  part  of  the  respondent  tends  to  show,  that  it  is 
a  positive  advantage  to  exclude  the  terpenes  wholly 
from  the  extract,  and  to  lessen  the  quantity  of  alco- 
hol used,  then  the  essential  ingredients  of  lemon 
extract  have  not  had  substituted  for  them  anything 
inferior  or  cheaper.  We  are  aware  that  this  view 
of  the  law  makes  it  more  difficult  to  establish  the 
individual  case,  but,  as  the  statute  is  a  penal 
statute,  it  should  receive  a  strict  construction. 

It  follows  from  the  views  above  expressed  that 
the  instruction  of  the  learned  circuit  judge  was 
erroneous,  inasmuch  as  the  jury  were  told,  in 
effect,  that  if  any  ingredient  of  lemon  essence,  as 
defined  by  the  pharmacopoeia,  was  wanting  in  this 
extract  sold  by  the  respondent,  there  should  be  a 
conviction.  We  think  the  instruction  should  have 
been  that  if  the  lemon  extract  sold  by  the  respond- 
ent contained  all  the  ingredients,  and  in  quantities 
such  as  prescribed  by  the  pharmacopoeia,  which 
are  adapted  to  use  as  food,  and  that  nothing  was 
eliminated  except  such  ingredients  as  could  be  dis- 
pensed with  without  injury  to  the  product  as  a  food 
product,  there  was  no  violation  of  the  statute." 
The  United  States  Pharmacopoeia  is  referred  to  in 
subdivision  1  of  section  4601  of  the  Wisconsin  law. 

In  the  case  under  consideration  there  is  in  the  ex- 
tract, according  to  the  result  of  the  analysis,  a  mere 
trace  of  lemon  oil,  and  also  a  deficiency  in  alcohol.  The 
question  remains  to  be  considered  whether  in  its  pres- 
ent form  the  sale  is  prohibited  by  the  law  in  question. 
Section  4601  provides  that  food  is  adulterated : 

(1)  "If  any  substance  or  substances  have  been 
mixed  with  it  so  as  to  lower  or  depreciate  or 
injuriously  affect  its  strength,  quality  or  purity,'' 

or  — 

(2)  "If  any  inferior  or  cheaper  substance  or 
substances  have  been  substituted  wholly  or  in  part 
for  it," 


467 

or,— 

(3)  ''If  any  valuable  or  necessary  ingredient 
has  been  wholly  or  in  part  abstracted  from  it," 

or  — 

(4)  "If  it  is  an  imitation  of,  or  sold  under  the 
name  of  another  article," 

or  — 

(6)     "If  it  is  colored,  coated,  polished  or  pow- 
dered, whereby  damage  or  inferiority  is  concealed, 
or  if  by  any  means  it  is  made  to  appear  better  or 
of  greater  value  than  it  really  is." 
The   proviso    excepts    articles    of   food   which    are 
labeled,  branded  or  tagged  in  a  manner  showing  their 
exact  character  and  composition,  and  approved  by  the 
Dairy  and  Food  Commissioner,  where  such  articles 
are   sold  under   their  own   distinct  names   or  under 
coined  names,  if  such  articles,  if  substitutes,  are  not  in 
imitation  of  or  sold  under  the  name  of  any  other  article 
of  food. 

The  present  article  is  sold  as  lemon  extract  when  in 
fact,  according  to  the  commissioner's  standard  and  that 
defined  in  the  pharmacopoeia,  it  is  not  a  lemon  extract. 
It  therefore  comes  within  the  letter  of  the  express  pro- 
hibition of  the  law.  It  cannot  be  classed  as  a  substitute 
for  the  reason  that  it  is  sold  under  the  name  of  the 
article  itself.  The  law  does  not  prohibit  its  sale  abso- 
lutely (unless  there  is  something  deleterious  to  health 
in  its  ingredients),  but  only  prohibits  its  sale  as  an 
article  which  it  is  not. 

The  Supreme  Court  of  Michigan,  in  People  v.  Jen- 
nings, supra,  said: 

"It  is  open  to  manufacturers  to  improve  a  com- 
mon article  of  food,  so  long  as  no  infringement  of 
the  law  or  spirit  of  the  act  defining  what  shall  be 
deemed  adulteration  takes  place," 
And,  again: 

"  If  it  be  a  fact,  as  the  testimony  on  the  part  of 
the  respondent  tends  to  show,  that  it  is  a  positive 
advantage  to  exclude  the  terpenes  wholly  from  the 
extract,  and  to  lessen  the  quantity  of  alcohol  used, 
then  the  essential  ingredients  of  lemon  extract 


468  , 

have  not  had  substituted  for  them  anything  infe- 
rior or  cheaper." 

As  far  as  I  can  make  out  from  the  facts  submitted 
to  me,  I  do  not  understand  that  it  is  contended  that  the 
extract  in  question  is  an  improvement  upon  "extract 
of  lemon,"  as  defined  in  the  pharmacopoeia,  or  that  the 
ingredients  required  to  constitute  the  extract,  as  de- 
nned by  that  treatise,  are  excluded  from  the  sample 
under  consideration  so  as  to  create  "a  positive  ad- 
vantage. ' '  In  other  words, — if  the  sample  did  not  ex- 
clude ingredients  which  are  essential  to  "lemon  ex- 
tract," or  was  an  improvement  upon  "a  common  arti- 
cle of  food,"  then  the  present  inquiry  would  involve 
a  question  of  fact  and  not  of  law,  and  would  call  for 
a  different  conclusion  under  the  Michigan  decision 
above  quoted. 

The  tendency  of  the  judicial  tribunals  of  this  country 
is  very  strong  towards  upholding  legislation  of  the 
kind  under  consideration.  There  are  several  serious 
questions  here  involved  which  cause  grave  doubt  in 
my  mind,  and  have  led  to  some  delay  in  formulating 
these  views. 

I  want  to  emphasize  that  I  assume  that  the  pharma- 
copoeia applies  to  the  matter  under  consideration.  The 
statutes  of  Wisconsin  permit  the  commissioner  to  have 
recourse  to  the  United  States  Pharmacopoeia  in  the 
case  of  "drugs."  In  the  section  referring  to  "food" 
it  will  be  noticed  that  the  pharmacopoeia  is  not  made 
the  standard.  If,  therefore,  the  standard  which  the 
commissioner  adopted  is  not  such  as  properly  applies 
to  lemon  extract  as  an  article  of  food,  a  different  ques- 
tion would  present  itself. 

The  Wisconsin  statute  expressly  defines  the  term 
"drug"  as  including  medicines  for  internal  or  external 
use,  etc.,  and  the  term  ' '  food ' '  as  including  articles  used 
for  food  or  drink  by  man.  If  it  can  be  successfully 
shown  that  the  Wisconsin  commissioner  has  applied  to 
extract  of  lemon,  as  an  article  of  food,  a  standard 
which  is  not  properly  applicable  thereto,  then,  as  I  have 
said,  an  entirely  different  question  arises. 

It  will  be  noted  also  that  the  pharmacopoeia,  as  I 


469 

am  advised,  refers  only  to  spiritus  limonis,  or  essence 
of  lemon.  If  it  be  a  fact  that  extract  of  lemon,  as  an 
article  of  food,  is  a  different  article  from  spirits  of 
lemon,  as  referred  to  in  the  pharmacopoeia,  then  again, 
a  further  question  arises. 

Though  it  is  with  much  hesitancy  that  I  express  an 
opinion  upon  the  assumptions  hereinbefore  contained, 
I  am  inclined  to  the  view  that  the  chance  is  against  a 
successful  attack  being  made  in  the  present  case.  There 
is,  however,  so  much  doubt  involved  that  in  my  judg- 
ment, if  the  labor  and  expense  are  not  sufficient  to  deter, 
a  test  case  ought  to  be  made. 

LIABILITY  OF  AN  EMPLOYER  FOR  PHYSICIANS  CHARGES 
FOR  VACCINATION  OF  EMPLOYEE,  OR  FOR  DAMAGES  FROM 
UNSATISFACTORY  VACCINATION. 

(Rubber  Paint  Company,  Nov.  3,  1904.) 
"Having  a  number  of  employees,  and  realizing 
the  need  at  this  time  of  having  them  vaccinated, 
would  like  the  legal  opinion  as  to  our  liability 
should  we  pay  a  physician  for  vaccinating  our  em- 
ployees in  case  said  vaccinations  should  not  turn 
out  satisfactorily,  infection  set  in  or  something 
of  that  kind." 

There  is  no  obligation  on  the  part  of  the  employer 
to  furnish  medical  assistance  to  those  in  his  service.  If 
the  employer  does  so  he  is  not  ordinarily  liable  for 
the  malpractice  of  the  physician  or  surgeon.  In  such 
a  case  the  law  requires  only  that  reasonable  care  and 
caution  should  be  exercised  by  the  employer  in  the 
selection  of  the  physician  or  surgeon.  The  physician 
or  surgeon  must  possess  that  degree  of  skill  or  knowl- 
edge ordinarily  possessed  by  members  of  the  profes- 
sion. The  selection  must  be  a  prudent  one,  made  with 
care,  but  the  employer  is  not  liable  if  the  physician  or 
surgeon  errs  in  judgment  or  makes  a  mistake  in  treat- 
ment. The  responsibility  extends  no  further  than  to 
require  reasonable  care  in  the  selection  of  the  physi- 
cian or  surgeon.  Cummings  v.  Railway  Co.,  89  111. 
App.,  199. 


470 


WHETHER  A  COMPANY  IS  LIABLE  FOR  GOODS  DESTROYED 
WHILE  IN  ITS  CARE  FOR  THE  PURPOSE  OF  BEING  RE- 
PAIRED. 

(Studebaker  Bros.  Manufacturing  Company,  Novem- 
ber 7,  1904.) 

"As  a  member  of  your  organization,  we  would 
like  to  have  you  obtain  from  the  general  counsel 
an  opinion  that  we  think  will  interest  a  number  of 
the  members  of  the  organization.  What  we  wish 
to  ascertain  is  the  following:  Where  vehicles  are 
received  in  a  repair  shop,  for  alterations  or  re- 
pairs of  any  kind,  and  are  burned  while  in  the 
repair  shop,  is  the  owner  of  the  repair  shop  liable 
for  their  value?  In  other  words — in  the  event 
of  a  fire  in  our  repair  shop,  in  which  case  a  large 
number  of  vehicles,  not  our  own,  are  burned  up, 
would  we  be  liable?" 

The  company  occupies,  with  respect  to  the  vehicles 
left  at  its  shop  for  repairs,  the  position  of  bailee.  When 
the  bailment  is  reciprocally  beneficial  to  both  parties, 
as  in  the  present  case,  the  bailee  is  required  to  exercise 
only  ordinary  care  and  diligence  and  is  answerable 
only  for  ordinary  neglect.    The  bailee,  in  the  absence 
of  a  special  agreement,  is  not  an  insurer  of  the  chat- 
tels entrusted  to  his  care,  and  is  liable  only  where  a 
loss  occurs  on  account  of  a  failure  to  exercise  ordinary 
care.     Ordinary  care  is  such  a  care  as  a  person  of 
ordinary  caution  would  exercise  in  regard  to  the  prop- 
erty.    It  follows,  therefore,  that  where  the  bailment 
is  destroyed  by  a  fire  which  no  ordinary  prudence 
could  guard  against,  or  prevent,  the  bailee  will  not  be 
responsible  for  a  loss  occasioned  without  his  fault. 
3  Ency.  of  Law  (2nd  Ed.),  p.  747. 
Russell  v.  Koehler,  66  111.,  459. 
Standard  Brewery  v.  Malting  Co.,  171   111., 
602. 


471 


WHETHER  A  SALESMAN  AUTHORIZED  TO  SELL  GOODS  AND 
COLLECT  ACCOUNTS  HAS  THE  IMPLIED  POWER  TO  ENDORSE 
HIS  PRINCIPAL'S  NAME  UPON  CHECKS. 

(McNeil  &  Higgins  Company,  November  8,  1904.) 

"Our  company  would  like  to  have  the  opinion 
of  the  lawyer  for  the  association  on  the  right  of  a 
salesman  authorized  to  sell  goods  and  collect  ac- 
counts, who  receives  checks  payable  to  the  order 
of  his  principal,  as  to  whether  said  salesman  has 
the  implied  power  to  endorse  the  name  of  his 
principal  upon  such  checks  as  he  may  receive  and 
secure  the  cash  on  said  checks.  If  the  bank  pays 
the  check  on  the  endorsement  of  the  salesman 
without  knowledge  on  the  part  of  the  principal 
and  the  salesman  embezzles  the  money,  could  the 
bank  be  compelled  to  pay  the  check  again  to  the 
proper  party? 

We  feel  sure  that  this  question  is  one  that  would 
be  of  great  interest  to  your  members,  and  trust 
that  we  will  receive  an  opinion  at  an  early  date." 
The  question  must  be  determined  by  the  extent  of 
the  authority  of  the  salesman  or  agent  to  endorse 
checks.  The  authority  may  be  either  express  or  im- 
plied. I  assume  that  no  express  authority  was  con- 
ferred. Authority  to  endorse  commercial  paper  can 
only  be  implied  where  the  agent  is  unable  to  perform 
the  duties  of  his  agency  without  the  exercise  of  such 
authority,  or  where  the  power  is  a  manifestly  neces- 
sary and  customary  incident  of  the  position  occupied 
by  the  agent,  and  where  the  power  is  practically  indis- 
pensable to  accomplish  his  duties.  In  other  words, 
the  power  of  an  agent  to  endorse  commercial  paper 
for  his  principal  must  be  a  necessary  implication  from 
an  express  authority  conferred  on  the  agent. 

Authority  may  be  presumed  from  previous  dealing 
and  acts  of  recognition  of  authority  in  former  in- 
stances, but  to  bind  the  principal  these  acts  of  recog- 
nition must  be  known  to  the  party  dealing  with  the 
agent. 


472 

That  is  to  say,  where  a  party  accepting  a  check  or 
note  payable  to  the  principal  and  endorsed  by  an 
agent,  maintains  that  the  agent  had  apparent  author- 
ity to  make  such  endorsement,  he  must  prove  that 
the  facts,  giving  color  of  authority  to  the  agent,  were 
known  to  him.  If  such  person  had  no  knowledge  of 
such  facts  he  can  not  have  acted  upon  them  and  is 
consequently  not  in  a  position  to  rely  on  such  apparent 
authority. 

I  am  of  the  opinion  that  a  salesman  employed  to 
sell  and  take  orders  for  goods,  to  collect  accounts  and 
receive  money  and  checks  payable  to  the  order  of  his 
principal,  is  not  by  implication  authorized  to  endorse 
his  principal's  name  to  checks.  The  endorsement  of 
a  check  is  not  a  necessary  incident  to  its  collection. 
A  person  dealing  with  an  agent  takes  the  risk  as  to 
the  extent  of  his  authority  and  is  bound  to  make  in- 
quiries in  regard  thereto.  The  bank  in  question  can, 
therefore,  in  my  opinion,  be  compelled  to  repay  the 
amount  of  the  check  to  the  principal  unless  it  be  proved 
that  the  principal  has  ratified  prior  acts  of  endorse- 
ment on  the  part  of  the  agent,  and  that  the  bank  had 
knowledge  of  such  facts  at  the  time  it  paid  the  check. 
Subsequently  acquired  knowledge  will  not  suffice.  The 
burden  of  proving  that  an  agent  has  authority  to  en- 
dorse the  check  is  upon  the  party  who  asserts  the 
existence  of  such  authority. 

Jackson  Paper  Co.  v.  Commercial  National 

Bank,  199  111.,  151. 
Sinclair  v.  Goodell,  93  111.  App.,  593. 


WHETHER  PICKETING  BY  LABOR  UNIONS  IS  LAWFUL. 

(Illinois  Malleable  Iron  Co.,  November  10,  1904.) 

"Did  you  notice  in  this  morning's  paper  that 
the  Teamsters '  Union  are  going  to  send  out  pickets 
all  over  the  city  to  stop  every  teamster  and  see 
that  he  has  taken  a  fresh  union  card  or  a  card  at 
all,  make  them  join  the  union  if  they  did  not  belong 
and  make  them  pay  up  their  dues  if  they  did 


473 

belong;  that  they  have  lost  10,000  of  their  member- 
ship because  it  had  been  out  one-third  or  one-half 
(the  writer  is  not  sure  what  the  article  said)  and 
caused  a  loss  of  10,000  out  of  20,000  or  cut  their 
membership  to  10,000. 

It  strikes  the  writer  that  this  is  a  good  time  for 
us  to  act  and  to  get  an  injunction  against  their 
sending  out  these  pickets  to  make  trouble;  that 
if  the  men  are  tired  of  it  and  want  to  drop  it  don't 
let  them  be  interfered  with.  The  name  of  some 
non-union  teamster  can  be  taken  to  secure  injunc- 
tions against  the  various  unions  and  let  any  per- 
sons who  are  acting  as  pickets  be  arrested;  in 
fact  the  association  ought  in  conjunction  with 
other  employers'  associations  to  have  detectives 
working  at  once  so  as  to  secure  the  arrest  of  these 
pickets  who  are  interfering  with  the  teamsters. 
Will  you  take  it  up  with  the  various  associations?" 
Picketing  is  not  in  itself  unlawful,  but  when  accom- 
panied by  threats,  abusive  epithets  or  intimidation  it 
becomes  unlawful. 

In  Beaton  v.  Tar  rant,  102  111.  App.,  124,  the  rule  is 
laid  down : 

1 '  Workmen  may  use  the  streets  and  highways  in 
a  manner  not  inconsistent  with  public  travel,  for 
the  purpose  of  entreaty,  inducement  and  peaceful 
persuasion  in  good  faith,  and  a  patrol  or  picket 
may  not  necessarily  imply  force  or  a  threat  of 
bodily  harm;  but  to  accomplish  their  purposes 
they  may  not  overstep  the  bounds  and  use  threats, 
abusive  epithets  or  intimidation,  or  congregate  in 
such  number  or  in  such  manner  or  with  such  a 
show  of  force,  as  is  calculated  to  intimidate  a  rea- 
sonable and  prudent  man,  and  no  harm  can  result 
in  granting  an  injunction  to  restrain  such  unlawful 
conduct. ' ' 

And  in  Christensen  v.  Kellogg  Switchboard  &  Supply 
Co.,  110  111.  App.,  61,  the  rule  is  reiterated : 

"It  is  urged  that  the  injunction  order  should 
be  so  modified  as  not  to  restrain  the  maintenance 
of  a  picket  or  patrol,  which  it  is  said  is  not  unlaw- 


474 

ful.  It  is,  we  think,  true  that  picketing  or  patrol- 
ling, when  the  terms  are  used  to  designate  mere 
watching  or  being  in  the  street,  should  not  be 
enjoined.  The  terms  themselves  are  of  military 
origin  and  apply  to  acts  customary  in  time  of 
war.  Nevertheless  there  may  doubtless  be  picket- 
ing and  patrolling  which  are  not  unlawful.  But 
the  picketing  described  in  the  bill  before  us  is  not 
of  that  character.  It  is,  as  we  have  said,  accom- 
panied with  the  use  of  force  and  violence,  and  it  is 
the  kind  of  picketing  and  patrolling  described  in 
the  bill  of  complaint  which  is  enjoined. ' ' 
In  the  same  case  it  is  stated : 

"It  is  upon  the  ground  of  injury  to  property 
rights  that  the  jurisdiction  of  equity  to  interfere 
by  injunction  rests." 

I  am  not  sufficiently  familiar  with  the  facts  in  the 
present  case  to  determine  whether  the  methods  adopted 
by  the  pickets  are  such  as  to  make  their  action  unlawful. 
If  threats,  violence  or  intimidation  are  used,  or  if  a 
number  of  pickets  congregate  in  such  a  manner  as  is 
calculated  to  intimidate  a  reasonable  and  prudent  man, 
such  picketing  becomes  unlawful.  Assuming  that  the 
picketing  in  question  is  unlawful,  the  question  arises: 
Is  there  a  property  right  involved,  of  such  a  nature 
that  a  court  of  equity  will  take  jurisdiction  to  restrain 
the  continuance  of  such  unlawful  acts  by  injunction! 
The  right  to  labor  is  a  property  right.  If  the  acts  of 
the  pickets  are  of  such  a  nature  that  the  employe  is 
hindered  from  pursuing  his  lawful  occupation,  his 
right  to  labor  is  interfered  with  and  he  is  injured  in  a 
property  right. 

I  am,  therefore,  of  the  opinion  that  a  court  of  equity 
has  jurisdiction  of  such  a  case  if  the  acts  are  sufficient 
to  bring  it  within  the  rules  above  referred  to,  but' 
whether  the  matter  is  one  that  the  Illinois  Manufac- 
turers '  Association  should  take  up  alone  or  in  conjunc- 
tion with  other  associations  is  a  matter  for  the  Board  of 
Directors  to  decide. 


475 


WHETHER  A  THROUGH  FREIGHT  RATE  GREATER  THAN  THE 
SUM  OF  TWO  LOCALS  IS  A  VIOLATION  OF  THE  INTER-STATE 
COMMERCE  LAW. 

(Hunt,  Helm,  Ferris  &  Co.,  November  10,  1904.) 

1 '  We  would  like  to  have  you  submit  to  Mr.  Levy 
Mayer,  for  his  opinion,  the  following  questions: 
'Can  a  transportation  company  compel  a  shipper 
to  pay  a  through  rate  on  goods  where  the  sum  of 
two  locals  is  less  than  the  through  rate?' 

For  instance:  The  sum  of  the  local  rate  from 
Harvard  to  Chicago  and  the  local  rate  from  Chi- 
cago to  Harvard  is  less  than  the  through  rate  be- 
tween Harvard  and  Cleveland. 

The  transportation  company  in  question  pub- 
lish no  through  rate  at  this  end  of  the  line,  and 
the  only  way  we  can  find  out  their  through  rate 
is  by  writing  their  Chicago  office." 
Section  1  of  the  Interstate  Commerce  Act  provides, 
in    substance,   that   all   charges   of   common   carriers 
shall  be  reasonable  and  just. 

Section  2  prohibits  unjust  discrimination  between 
persons  similarly  circumstanced  and  conditioned. 

Section  3  prohibits  any  undue  or  unreasonable  pref- 
erence or  advantage  to  any  particular  person  or  lo- 
cality, or  to  any  particular  description  of  traffic. 

These  various  provisions  are  amplified  and  extended 
in  the  recent  Elkins  Act  of  February  19,  1903. 

Section  4  prohibits  a  greater  compensation  in  the 
aggregate  for  transportation  for  a  shorter  than  for 
a  longer  haul,  under  like  conditions. 

Section  6  provides  for  the  filing  and  publication  of 
tariff  schedules,  etc.  It  also  provides: 

"And  in  cases  where  passengers  and  freight 
pass  over  continuous  lines  or  routes  operated  by 
more  than  one  common  carrier,  and  the  several 
common  carriers  operating  such  lines  or  routes 
establish  joint  tariffs  of  rates  or  fares  or  charges 
for  such  continuous  lines  or  routes,  copies  of  such 
joint  tariffs  shall  also,  in  like  manner,  be  filed 
with  said  Commission. 


476 

Such  joint  rates,  fares,  and  charges  on  such  con- 
tinuous lines  so  filed  as  aforesaid  shall  be  made 
public  by  such  common  carriers  when  directed  by 
said  Commission,  in  so  far  as  may,  in  the  judg- 
ment of  the  Commission,  be  deemed  practicable; 
and  said  Commission  shall  from  time  to  time  pre- 
scribe the  measure  of  publicity  which   shall  be 
given  to  such  rates,  fares,  and  charges,  or  to  such 
part  of  them  as  it  may  deem  it  practicable  for 
such  common  carriers  to  publish,  and  the  places 
in  which  they  shall  be  published. ' ' 
I  assume  that  the  railroad  company  has  established 
a  through  rate  from  Harvard  to  Cleveland  via  Chi- 
cago, and  that  this  rate  is  greater  than  the  aggregate 
of  the  local  rates  from  Harvard  to  Chicago  and  from 
Chicago  to  Cleveland.    The  question  to  be  determined 
is  whether  or  not  these  facts  establish  a  violation  of 
the  provisions  of  the  Interstate  Commerce  Act  above 
referred  to. 

In  Hilton  Lumber  Co.  v.  Wilmington  &  Weldon  R. 
R.  Co.,  9  Int.  Comm.  Reps.,  p.  17  (decided  April  10, 
1901),  the  precise  question  was  passed  upon.  It  was 
there  observed  that : 

"This  seems  to  be  the  first  case  submitted  to 
the  Commission  during  the  fourteen  years  since 
the  regulating  statute  was  passed  showing  a 
through  freight  charge  over  connecting  roads  in 
excess  of  a  combination  of  charges  applying  to 
and  from  an  intermediate  point  on  the  through 
line." 

In  that  case  the  facts  were  as  follows : 
The  local  rates  on  lumber  from  Wilmington  to  Nor- 
folk or  Portsmouth,  Va.,  added  to  the  rates  in  force 
from  Portsmouth  or  Norfolk  to  Philadelphia,  Jersey 
City  and  Boston,  produced  lower  aggregate  charges 
than  the  through  rates  in  effect  on  lumber  carried  by 
the  connecting  defendant  carriers  from  Wilmington 
direct  to  Philadelphia,  Jersey  City  and  Boston  via 
Portsmouth  and  Pinner's  Point,  adjacent  to  Norfolk. 
This  resulted  from  the  fact  that  the  arbitrary  or  pro- 
portion of  the  through  rate  from  Wilmington  exacted 


477 

by  the  carriers  north  of  Portsmouth  or  Norfolk  was 
greater  than  their  rates  on  shipments  from  Norfolk 
or  Portsmouth.    The  Commission,  in  its  opinion,  said : 
"neither  competition  nor  the  need  of  greater  rev- 
enue can  operate  to  justify  such  unjust  discrimi- 
nation as  is  evidenced  by  a  through  rate  on  traffic 
from  a  competing  locality  higher  than  the  combi- 
nation of  separately  established  charges  to  and 
from  another  competing  locality   on  the   direct 
through  line. ' ' 
And  again : 

"The  rates  from  Wilmington  to  Philadelphia, 
Jersey  City  and  Boston,  to  the  extent  that  they 
exceed  the  sum  of  rates  from  Wilmington  to  Nor- 
folk or  Portsmouth  and  from  the  latter  points  to 
the  northern  destinations  mentioned,  are  in  viola- 
tion of  section  3  of  the  statute.  We  also  think  they 
violate  the  first  section. 

We  are  also  of  opinion  that  in  charging  a 
through  rate  which  exceeds  the  sum  of  the  locals 
by  reason  of  the  fact  that  the  proportion  from 
Portsmouth  north  exceeds  the  local  from  that 
point,  these  carriers  violate  the  second  section." 
The  opinion  concludes : 

"Divisions  of  joint  rates  are  usually  less  than 
corresponding  locals  and  almost  without  excep- 
tion not  greater.     Without  determining  whether 
a  case  might  not   arise   in  which   such  division 
could  with  propriety  be  made  greater  than  the 
local  rate,  we  are  clearly  of  the  opinion  that  no 
such  case  is  presented  here  where  the  total  through 
rate  on  competitive  traffic  exceeds  the  sum  of  the 
charges  to  and  from  an  intermediate  point." 
I  am  of  the  opinion  that  the  through  rate  in  question 
is  prima  facie  a  violation  of  the  Interstate  Commerce 
Act.  There  may,  however,  be  exceptional  circumstances 
which  are  not  called  to  my  attention,  which  might 
justify  a  greater  charge  for  through  service  than  the 
aggregate  of  the  local  charges.     For  instance,  there 
might  possibly  exist  certain  conditions  in  transferring 
the  shipment  in  Chicago  from  the  initial  carrier  to  the 


478 

connecting  carrier  justifying  an  increased  charge — 
which  conditions  would  not  exist  in  the  case  of  a  local 
shipment  originating  in  or  terminating  at  Chicago. 
The  main  reason  for  the  existence  of  through  rates 
is  the  principle  of  railroad  economics  that  the  rate  per 
ton  per  mile  decreases  as  distance  increases,  and  there- 
fore the  proportional  rate  should  ordinarily  be  lower 
on  through  traffic,  as  it  is  carried  at  a  lower  expense 
to  the  carrier  than  that  entailed  in  local  service.  This 
rule  is  not,  however,  a  fixed  rule,  and  it  has  its  quali- 
fications and  exceptions.  If  the  facts  develop  that  the 
present  case  is  an  exception  to  this  rule,  the  Interstate 
Commerce  Act  may  not  have  been  violated. 

A  complaint  should  be  made  to  the  Commission,  and 
if  any  reason  exists  justifying  the  higher  through  rate 
the  carrier  must  disclose  it.  In  the  absence  of  such 
evidence  I  am  clearly  of  the  opinion  that  the  act  has 
been  violated. 


NOTE: — See  the  later  opinions  of  November  10,  1906,  for  Block- 
Pollack  Iron  Co.  of  July  13,  1907,  for  The  Crane  Co.  and  of  Nov.  26, 
1907,  for  the  Latrobe  Steel  &  Coupler  Co.  upon  the  effect  of  a  through 
rate  greater  than  the  sum  of  the  locals  and  as  to  the  right  of  a  shipper 
to  avail  himself  of  the  combination  of  the  locals  under  the  Interstate 
Commerce  Act. — Ed. 


THE  LIABILITY  OF  A  COMPANY  ACCEPTING  OR  PAYING  A 
DKAFT  ATTACHED  TO  A  BILL  OF  LADING  BEFORE  THE  GOODS 
ARE  DELIVERED  BY  THE  CARRIER. 

(Amazon  Knitting  Company,  November  12,  1904.) 

'  *  I  wish  you  would  obtain  for  me  the  opinion  of 
Levy  Mayer,  attorney  for  the  association,  on  the 
following  question: 

At  whose  risk  in  transit  is  merchandise  shipped 
under  the  following  conditions :  Condition  of  sale, 
delivery  at  the  factory  of  the  purchaser,  a  draft 
drawn  with  bill  of  lading,  bill  of  lading  made  out 
in  the  name  of  the  shipper  and  endorsed  when 
made,  against  the  shipment  and  paid  on  presenta- 
tion. 

Does  this  payment  of  the  draft  change  the  risk 


479 

of  goods  in  transit?  In  other  words,  if  damage 
is  sustained  while  the  goods  are  in  transit  to  the 
mill,  is  it  at  the  shipper's  risk? 

I  am  not  positive,  but  I  think  Mr.  Mayer  has  in 
the  past  answered  this  question,  and  if  he  has, 
and  you  can  forward  me  his  opinion,  it  will  not 
be  necessary  for  him  to  write  a  new  one.  Other- 
wise, I  wish  you  would  get  his  opinion  as  requested 
above. ' ' 

As  frequently  stated  in  my  prior  opinions,  loss  or 
damage  to  goods  in  transit  ordinarily  falls  upon  the 
owner  of  the  goods  at  the  time  of  such  loss  or  damage. 
Who  is  the  owner  is  primarily  a  question  of  intention. 
Under  an  agreement  to  deliver  at  the  place  of  business 
of  the  consignee,  the  title  does  not  ordinarily  pass  to 
the  consignee  until  delivery  to  him.  On  the  other 
hand,  the  taking  of  a  bill  of  lading  to  the  consignor's 
own  order  is  presumptive  evidence  of  an  intention  to 
reserve  the  title  in  the  consignor.  The  bill  of  lading 
in  such  a  case  is  a  symbol  of  the  property,  so  that  a 
transfer  of  the  bill  of  lading  is  taken  as  a  transfer 
of  the  goods  themselves,  and  where  a  draft  is  attached 
to  such  a  bill  of  lading  the  title  does  not  pass  until 
the  payment  of  the  draft,  if  it  be  a  sight  draft,  or  the 
acceptance  of  the  draft  if  it  be  a  time  draft. 

The  case  presented  falls  between  these  two  classes 
of  cases.  Under  the  contract  the  title  does  not  pass 
to  the  consignee  until  delivery,  yet  by  the  payment 
of  the  draft  the  consignee  has  acquired  the  symbolical 
title  to  the  goods.  The  goods  are  not  delivered  until 
after  the  payment  of  the  draft.  The  consignee  might 
have  withheld  payment  of  the  draft  and  acceptance  of 
the  bill  of  lading  until  the  goods  reached  their  destina- 
tion. He  did  not  do  so,  but  preferred  to  pay  for  the 
same  in  advance.  By  doing  so  he  accepted  a  delivery 
of  the  goods  before  he  was  bound  to  do  so. 

I  am,  therefore,  of  the  opinion  that  from  the  time 
of  the  acceptance  of  the  draft  the  risks  of  carriage 
were  upon  the  consignee.  In  such  cases  I  consider  it 
unsafe  to  pay  or  accept  any  draft  until  the  goods  are 
delivered  by  the  carrier. 


480 

See  the  authorities  cited  in  my  former  opinions,  and 
Torcheimer  v.  Stewart  (Iowa),  22  N.  W.,  886. 


NOTE: — See  the  later  opinion  of  April  20,  1907,  for  The  United 
Breweries  Co.  as  to  upon  whom  is  the  risk  of  transit  when  goods  are 
sold  f.  o.  b.  point  of  shipment  with  sight  draft  attached  to  order  bill 
of  lading  taken  in  name  of  the  consignor. — Ed. 


WHETHER   A   CARRIER   HAS   A   RIGHT    TO    MAKE    A   PER   DIEM 
CHARGE  FOR  CARS  IN  ADDITION  TO  SWITCHING  CHARGES. 

(W.  0.  King  &  Co.,  November  14,  1904.) 
11  We  would   like   Mr.    Mayer's   opinion   as   to 
whether  railroad  companies,  in  addition  to  freight 
and  switching  charges,  are  entitled  to  make  a  per 
diem  charge  for  use  of  cars. 

For  instance,  we  are  now  shipping  ten  carloads 
of  lumber  from  our  yards  on  the  C.  B.  &  Q.  to  a 
point  on  the  C.  M.  &  St.  P.  By.  in  the  limits  of 
Chicago   and  within  limit  of  the   switching  dis- 
trict, for  which  the  C.  M.  &  St.  P.  makes  a  charge 
of  $5.00  for  switching  and  the  C.  B.  &  Q.  a  switch- 
ing charge  of  $5.00  and  in  addition  to  this  they 
charge  us  $1.40  per  diem  for  use  of  the  car." 
The  question  first  to  be  determined  is  whether  the 
shipment  is  a  purely  local  one  or  whether  it  constitutes 
a  part  of  a  shipment  that  is  interstate.     If  the  lum- 
ber was  destined  for  another  State  and  it  had  begun 
to  move  as  an  article  of  trade  to  that  other  State,  and 
the  switching  was  part  of  that  movement,  then  the 
transaction  was  one  of  interstate  commerce.    The  fact 
that  several  different  and  independent  agencies  are 
employed  in  transporting  the  commodity,  some  acting 
entirely  in  one  State,  does  not  affect  the  character  of 
the  transaction. 

The  Daniel  Ball,  10  Wall.,  565. 

I  assume,  however,  in  the  present  case  that  the 
shipment  originated  in  Chicago  and  terminated  there, 
and  that  it  is  purely  a  local  shipment.  The  provis- 
ions of  the  interstate  commerce  act,  therefore,  have 
no  application. 


481 

Section  1  of  the  act  of  May  2,  1873  (Kurd's  Rev. 
Stat.  of  111.,  p.  1457),  prohibits  the  charging  of  more 
than  a  fair  and  reasonable  rate  by  any  carrier. 

Section  2  provides  against  unjust  discrimination, 
which  is  denned  in  Section  3. 

By  Section  8  the  railroad  and  warehouse  commis- 
sioners are  directed  to  make  for  each  railroad  corpora- 
tion a  schedule  of  reasonable  maximum  rates  of 
charges  for  the  transportation  of  freights,  passengers 
and  cars,  which  schedules  are  prima  facie  evidence  of 
the  reasonableness  of  such  rate. 

Section  6  of  the  act  of  July  1,  1871  (Kurd's  Eev. 
Stat.,  p.  1469),  provides  that  every  railroad  company 
shall  annually  report  the  tariff  of  freights,  showing 
each  charge  of  tariff  during  the  preceding  year,  and 
shall  file  a  copy  of  each  published  rate  of  fare  and 
tariff  for  freight  in  force  or  issued  for  the  govern- 
ment of  its  agents. 

I  am  not  informed  as  to  whether  the  railroad  and 
warehouse  commissioners  have  established  a  maximum 
rate  for  the  charges  in  question,  nor  whether  the  rail- 
roads, in  the  report  which  they  are  required  to  make, 
have  filed  any  schedules  of  such  rates.  Nor  does  it 
appear  whether  the  charge  in  question  is  in  the  nature 
of  a  demurrage  charge  imposed  where  the  cars  are 
used  beyond  a  certain  period,  or  a  per  diem  charge 
for  the  use  of  the  car,  irrespective  of  the  length  of  time 
the  same  is  used. 

In  Schumacher  v.  C.  &  N.  W.  Ry.  Co.,  207  111.,  199, 
the  right  of  a  carrier  to  charge  demurrage  at  the  rate 
of  one  dollar  per  day  was  upheld  where  the  cars  were 
not  unloaded  within  twenty-four  hours.  As  the  facts 
are  not  before  me,  I  can  express  no  further  opinion. 
If  the  charge  in  question  is  a  demurrage  charge,  it 
may  be  unjust,  as  the  railroads  have  established  the 
rate  for  demurrage  at  one  dollar  a  day.  However, 
upon  this  question  I  express  no  opinion. 


(W.  0.  King  &  Co.,  January  5,  1905.) 
"Replying  to  yours  of  the  14th  inst.,  would  say 
in  regard  to  the  switching  referred  to,  the  C.  B. 


482 

&  Q.'s  switching  tariff  is  $3.00  and  the  C.  M.  & 
St.  P.'s  is  $5.00,  but  after  the  shipment  was  made 
we  were  charged  $1.40  per  diem,  which  we  under- 
stood is  an  arbitrary  charge  made  by  the  roads 
for  the  use  of  the  car  which  is  addition  to  their 
switching  tariff  and  which  we  think  unjust. 

The  shipment  originated  in  Chicago  and  was 
purely  local  business,  of  which  we  have  consider- 
able. There  is  always  something  new  coming  up 
and  some  charge  tacked  on,  none  of  which  is  de- 
murrage. ' ' 

Which  communication  is  a  reply  to  my  opinion  of  the 
14th  ult. 

As  I  stated  in  my  former  opinion,  the  shipment  being 
a  local  one,  the  provisions  of  the  interstate  commerce 
act  have  no  application. 

The  act  of  Illinois  of  April  13,  1871  (L.  1871-72,  p. 
618),  provides  (Section  6)  that  every  railroad  com- 
pany shall,  on  or  before  September  1st,  in  each  year, 
make  and  transmit  to  the  Board  of  Railroad  and  Ware- 
house Commissioners  of  Illinois  a  full  and  true  state- 
ment of  the  affairs  of  the  company  as  they  existed 
on  July  1st  preceding,  which  report  must  specify : 

"The  tariff  of  freights,  showing  each 

change  of  tariff  diiring  the  same  time  *     *     a 

copy  of  each  published  rate  of  fare  for  passengers 

and  tariff  of  freight  in  force  or  issued  for  the 

government  of  its  agents  during  the  same  time. 

Whether  the  rate  of  fare  and  tariff  of 

freight  in  such  published  lists  are  the  same  as  those 

actually  received  by  the  company  during  the  same 

time;  if  not,  what  were  received?" 

The  provisions  of  the  Illinois  statute  (act  of  April  7, 

1871),  as  to  the  extortion,  unjust  discrimination  and 

reasonableness  of  rates,  are  referred  to  in  my  prior 

opinion. 

Section  4  of  the  act  of  April  7,  1871,  subjects  any 
railroad  company  guilty  of  any  of  these  offenses  to 
heavy  penalties. 

And  Section  6  of  the  same  act  authorizes  the  party 
aggrieved  to  recover  treble  damages,  etc.  As  stated 


483 

in  my  former  opinion,  the  railroad  and  warehouse 
commissioners  are  directed  by  law  to  make  a  schedule 
of  reasonable  maximum  charges  for  the  transportation 
of  passengers,  freights  and  cars. 

I  have  not  before  me  the  tariffs  of  the  railroads, 
nor  am  I  informed  whether  the  per  diem  charge  of 
$1.40  per  car  is  published  in  the  tariffs,  or  whether 
or  not  the  railroad  and  warehouse  commissioners  have 
fixed  any  maximum  per  diem  charge  for  the  use  of 
cars.  I  presume  that  the  per  diem  charge  is  only  im- 
posed where  the  shipper  does  not  furnish  his  own 
cars.  If  the  shipper  furnishes  the  cars  there  would 
be  no  justification  for  the  extra  charge,  as  there  would 
be  no  service  rendered  in  addition  to  the  switching 
service.  Assuming,  therefore,  that  the  railroad  com- 
pany furnishes  the  cars,  the  only  question  presented 
is  whether  the  per  diem  charge  is  a  reasonable  charge 
for  the  use  of  cars.  This  must  be  determined  from  all 
the  facts  and  circumstances.  If  the  charge  is  consid- 
ered unreasonable,  a  complaint  will  lie  to  the  Railroad 
and  Warehouse  Commission  of  Illinois.  The  usual 
demurrage  charge  is  one  dollar  per  diem.  While  a 
car  is  in  transit  there  may  be  a  justification  for  the 
$1.40  per  diem  charge,  for  the  reason  that  the  wear 
and  tear  on  the  car  is  greater  during  transit  than 
during  the  time  of  unloading.  There  is,  however,  no 
law  in  Illinois  which  requires  local  rates  to  be  pub- 
lished in  advance  or  which  requires  the  railroad  com- 
pany to  adhere  to  its  published  rates  except  the  act 
of  April  13,  1871,  above  referred  to,  with  respect  to 
the  making  of  an  annual  report.  In  this  connection 
I  assume  that  no  charge  is  made  for  freight  excepting 
the  switching  and  the  per  diem  charge. 

I  am  not  sufficiently  informed  as  to  the  facts  to 
express  an  opinion  on  the  reasonableness  of  the 
switching  charges. 

Rule  21  of  the  "Railroad  and  Warehouse  Commis- 
sioners' Revised  Schedule  of  Reasonable  Maximum 
Rates  of  Charges  for  the  Transportation  of  Passengers 
and  Freight  on  all  the  Railroads  in  the  State  of  Illi- 
nois" provides : 


484 

"The  reasonable  maximum  rate  for  switching 
loaded  cars  for  distances  not  exceeding  three  miles 
shall  be  two  dollars  per  car.     Switching  includes 
the  hauling  of  loaded  cars  from  the  station  yards, 
side  tracks,  elevators  or  warehouses  to  the  junc- 
tion of  other  railroads  when  not  billed  from  sta- 
tions on  its  own  road  to  said  junctions,  and  from 
junctions  of  other  railroad  to  the  stations,  side 
tracks,  elevators  and  warehouses  situated  on  the 
tracks  owned  or  controlled  by  the  railroad  com- 
panies doing  said  switching;  it  is  that  transfer 
charge  ordinarily  made  for  moving  loaded  cars 
for  short  distances  for  which  no  regular  way-bill 
is  made,  and  which  do  not  move  beyond  two  regu- 
larly established  stations  on  the  same  road." 
In  Coivles  &  McKee  v.  C.,  E.  I.  &  P.  Ry.  Co.,  No.  14, 
Opinions  R.  R.  &  W.  Comm.,  1889-1899,  p.  101,  the 
commission  applied  this  rule.     In  this  case,  however, 
though  the  expense  bill  was  made  upon  the  basis  of  a 
transfer  from  Forty-fourth  street  to  Twenty-second 
street  (less  than  three  miles),  the  proof  showed  that 
the  car  was  actually  transported  from  the  Fifty-first 
street  yards  of  the  carrier.     The  car  was  delivered 
by  the  Atchison  Company  to  the  Chicago,  Rock  Island 
&  Pacific  railway  at  Fifty-first  street  (more  than  three 
miles  from  the  Twenty-second  street  station).    It  was 
insisted  that,  inasmuch  as  the  car  in  passing  to  the 
Fifty-first  street  yard  came  upon  a  track  of  the  Chi- 
cago, Rock  Island  &  Pacific  railway,  at  a  point  less 
than   three  miles   from   complainant's  warehouse   at 
Twenty-second    street,    only   the   distance   from   such 
nearer  point  to  the  warehouse  should  be  considered 
in  determining  the  length  of  the  haul.    The  commission 
said: 

"It  does  not  seem  to  the  Commission  unreason- 
able that  a  railway  company  doing  a  large  busi- 
ness in  a  large  city  should  establish  distributing 
points  for  the  different  classes  of  freight  or  cars 
which  it  hauls.  If  it  were  shown  by  the 

proof  that  a  car  was  received  by  the  company  at  a 
point  nearer  than  three  miles  of  its  destination 


485 

and  that  such  car  was  actually  hauled  by  respond- 
ent direct  to  its  destination,  a  distance  of  less 
than  three  miles,  then  the  mere  fact  that  the  com- 
pany may  have  a  distributing  point  farther  away 
to  which  the  car  might  have  gone,  would  not  justify 
the  company  in  charging  for  the  longer  distance 
from  this  distributing  yard,  which  was  not,  in  fact, 
traversed;  and  if  such  a  charge  were  made,  it 
would  constitute,  if  above  the  fixed  maximum,  a 
prima  facie  case  of  extortion.     Such  a  case  was 
not  made  by  the  proof  under  this  complaint. ' ' 
In  King  v.  P.  F.  W.  &  C.  Ry.  Co.,  No.  Ill,  p.  279, 
Opinion  B.  B.  &  W.  Comm.,  the  rule  was  again  applied. 
It  was  there  said : 

"The  point  urged  by  respondent,  'that  it  did  not 
take  these  cars  from  any  point  on  any  track  owned 
or  controlled  by  it,'  is  not  well  taken,  for  the  reason 
that  respondent  did  this  switching  with  a  full 
knowledge  of  the  switching  charges  as  fixed  by  the 
Commission,  and  also  with  a  full  knowledge  of 
the  fact  that  they  were  taking  these  cars  from  a 
point  on  a  line  of  railroad  now  owned  or  controlled 
by  it,  and  it  is  therefore  stopped  from  claiming 
any  advantage  or  general  benefit  thereby. 

It  is  also  true  that  respondent  could  not  have 
been  compelled  to  go  to  the  Sugar  Befining  Com- 
pany's works  for  these  cars,  as  it  was  not  located 
'on  any  tracks  owned  or  controlled  by  respond- 
ents.' but  having  elected  to  do  so,  it  can  not  now 
plead  in  defense  of  its  conduct  that  the  cars  were 
not  taken  from  a  point  on  track  or  tracks  that  was 
not  owned  or  controlled  by  it." 

In  Boston  Water  &  Light  Co.  v.  R.  R.  Co.  (Opin. 
B.  B.  &  W.  Comm.,  p.  373)  the  matter  was  again  passed 
upon.  It  was  there  contended  that,  inasmuch  as  the 
carrier  owned  the  lines  and  sidetrack,  it  had  the  right 
to  charge  the  regular  "cents  per  hundred  pounds" 
rate.  It  was  proven  that  in  billing  cars  from  the  junc- 
tion point  the  carrier  billed  them  to  the  first  station 
beyond  the  works  of  the  complainant  and  charged  the 
regular  rate  for  the  haul,  dropping  the  cars  off  the 


486 

sidetrack  of  the  complainant.     Referring  to  Rule  21, 
supra,  the  commission  said: 

"From  this  rule  it  is  clearly  apparent  that 
whenever  a  loaded  car  is  taken  at  the  junction  of 
another  railroad  to  be  transferred  to  any  side 
track,  elevator  or  warehouse  situated  on  the  tracks 
owned  or  controlled  by  the  railroad  company  tak- 
ing charge  of  such  car  at  said  junction,  that  the 
company  doing  said  transferring  shall  deliver  the 
same  on  their  own  tracks  to  the  place  of  destina- 
tion for  two  dollars,  provided  that  it  is  not  a  regu- 
larly established  station  on  the  same  road. 

The  evidence  in  this  case  showed  that  the  place 
of  business  of  the  complainant  is  not  a  regularly 
established  station  on  the  line  of  the  defendant, 
and  under  this  rule  it  is  clearly  evident  that  the 
defendant  was  violating  Rule  21  above  set  forth." 
To  the  same  effect  see: 

Coal  Co.  v.  C.  &  A.  Ry.,  Opinions,  p.  372. 
Vance  v.  R.  R.  Co.,  Opinions,  p.  329. 
If,  therefore,  the  facts  are  sufficient  to  bring  the 
present  case  within  Rule  21,  supra,  then  the  present 
charge  is,  prima  facie,  illegal,  and  the  burden  is  on  the 
carrier  to  establish  the  reasonableness  of  the  rate.    It 
seems  to  me  that  the  case  justifies  an  appeal  to  the 
State  Board  of  Railroad  Commissioners. 


NOTE: — Proceedings  were  instituted  by  the  Association  in  June, 
1907,  before  the  Illinois  Eailroad  &  Warehouse  Commission  involving 
switching  rates  and  switching  service  in  Illinois  and  these  proceedings 
are  now  (Jan.,  1908)  pending  before  the  Commission. 

See  also  the  later  opinion  of  April  20,  1907,  for  Edward  Hines 
Lumber  Co.  that  a  carrier  has  no  right  to  assess  an  arbitrary  per  diem 
charge  for  the  use  of  the  cars  in  addition  to  a  switching  charge. — Ed. 


WHAT  CONSTITUTES  UNJUST  DISCRIMINATION  UNDER  THE 
INTERSTATE  COMMERCE  ACT  AND  THE  RAILROAD  ACT  OP 
ILLINOIS. 


(Earl  Manufacturing  Company,  November  14,  1904.) 
"I  had  a  conversation  with  a  party  represent- 
ing a  Coal  Company  at  Virden,  111.  He  states  they 
are  getting  coal  delivered  for  75c  over  the  Alton 


487 

railroad.  They  also  have  a  contract  with  the  'Q' 
at  75c.  The  'Q'  hauls  coal  through  here  and  has 
been  asking  us  $1.20,  but  concluded  to  give  us 
$1.00  rate.  I  understand  they  got  a  $1.00  at 
Aurora.  This  is  a  point  of  discrimination  as  near 
as  I  can  find  out  and  I  want  to  find  out  as  to  how 
this  discrimination  law  acts.  We  fought  the  rail- 
road company  on  the  demurrage  proposition  and 
they  paid  us  back.  We  are  not  making  any  great 
complaint,  but  we  are  going  after  these  people 
to  get  what  there  is  in  it,  like  we  do  everything 
else  in  our  line.  We  want  your  assistance  on  the 
law  points  and  thank  you  kindly  for  your  work  as 
far  as  you  have  gone." 

Section  1  of  the  act  of  May  2,  1873  (Kurd's  Eev. 
Stat.  of  1903,  p.  1457),  forbids  any  railroad  company 
to 

''charge,  collect,  demand  or  receive  more  than  a 
fair   and   reasonable   rate   of  toll   or  compensa- 
tion," 
for  the  transportation  of  freight. 

Section  2  of  the  same  act  prohibits  "unjust  dis- 
crimination, ' '  which  is  defined  in  section  3  of  the  same 
act.  Section  3  is  too  long  to  quote,  but  in  substance 
it  prohibits  discriminating  charges  for  transporting 
freight  where  there  is  no  proper  basis  for  such  dis- 
crimination. 

Section  8  provides  for  the  fixing  of  maximum  rates 
by  the  railroad  and  warehouse  commissioners. 

The  above  provisions  apply  only  to  the  transporta- 
tion of  freight  wholly  within  one  State  and  not  shipped 
to  or  from  a  foreign  country  or  from  or  to  any  other 
State  or  Territory.  The  latter  class  of  shipments  come 
within  the  scope  of  the  interstate  commerce  act. 
Section  2  of  that  act  provides: 

"That  if  any  common  carrier  subject  to  the 
provisions  of  this  act  shall,  directly  or  indirectly, 
by  any  special  rate,  rebate,  drawback,  or  other 
device,  charge,  demand,  collect  or  receive  from 
any  person  or  persons  a  greater  or  less  compen- 
sation for  any  service  rendered,  or  to  be  rendered, 


488 

in  the  transportation  of  passengers  or  property, 
subject  to  the  provisions  of  this  act,  than  it 
charges,  demands,  collects,  or  receives  from  any 
other  person  or  persons  for  doing  for  him  or  them 
a  like  and  contemporaneous  service  in  the  trans- 
portation of  a  like  kind  of  traffic  under  substan- 
tially similar  circumstances  and  conditions,  such 
common  carrier  shall  be  deemed  guilty  of  unjust 
discrimination,  which  is  hereby  prohibited  and 
declared  to  be  unlawful. ' ' 
Section  3  provides: 

' '  That  it  shall  be  unlawful  for  any  common  car- 
rier subject  to  the  provisions  of  this  act  to  make 
or  give  any  undue  or  unreasonable  preference  or 
advantage  to  any  particular  person,  company, 
firm,  corporation,  or  locality,  or  any  particular 
description  of  traffic,  in  any  respect  whatsoever, 
or  to  subject  any  particular  person,  company, 
firm,  corporation,  or  locality,  or  any  particular 
description  of  traffic,  to  any  undue  or  unreason- 
able prejudice  or  disadvantage  in  any  respect 
whatsoever. ' ' 

Section  4  prohibits  a  greater  charge  for  a  shorter 
than  for  a  longer  haul  in  the  same  direction  over  the 
same  line. 

Section  6  provides  for  the  publication  and  filing  of  a 
schedule  of  rates. 

If  the  shipments  in  question  are  interstate  they  are 
governed  by  the  provisions  of  the  interstate  commerce 
act.  If  they  are  intra-state  the  railroad  act  of  Illinois 
controls.  The  facts  stated  are  not  sufficient  for  me 
to  express  an  opinion  as  to  whether  either  law  has 
been  violated.  If  an  investigation  of  such  facts  shows 
that  there  is,  in  fact,  unjust  discrimination  between 
persons  in  substantially  similar  circumstances,  a  com- 
plaint will  lie  to  the  Interstate  Commerce  Commission 
or  to  the  Railroad  and  Warehouse  Commission  of  Illi- 
nois, as  the  case  may  be,  and  in  appropriate  proceed- 
ings the  courts  will  furnish  relief. 


489 


THE  RIGHT  OF  A  RAILROAD  COMPANY  TO  ASSESS  CAR  SERVICE 
CHARGES  WITHOUT  MAKING   TENDER  OF   CARS. 

(J.  M.  Glenn,  Secretary,  November  15,  1904.) 

"The  Crane  Company  has  team  tracks  and 
sidings  at  its  Twelfth  Street  plant,  connecting 
with  the  Pennsylvania  and  Burlington  roads.  The 
railroads  have  assessed  car  service  charges  against 
cars  forty -eight  hours  after  the  arrival  of  the  cars 
in  Chicago  without  having  made  delivery  to  the 
Crane  Company  tracks.  The  railroad  companies 
claim  that  the  tracks  were  occupied  and  that  the 
Crane  Company  could  not  receive  the  cars.  The 
Crane  Company  wants  to  know  if  the  railroad 
companies  can  collect  car  service  for  the  cars  not 
delivered  on  its  tracks,  or,  at  least,  when  the  rail- 
roads have  not  actually  tendered  the  cars  to  its 
switch  engine." 

In  my  opinion,  rendered  March  14,  1904,  in  answer 
to  the  query  of  the  Block-Pollak  Iron  Company,  I  dis- 
cussed the  necessity  of  the  carrier  making  delivery  to 
the  sidetracks  of  the  consignee,  saying : 

"Where  a  side  track  is  erected  and  owned  by 
the  company  or  consignee,  it  is  considered  part  of 
the  line  of  the  railroad  and  the  company  is  obli- 
gated to  make  personal  delivery  to  the  consignee. 
*  The  liability  of  the  carrier  to  make  per- 
sonal delivery  may  also  be  established  by  usage 
or  custom.  *  *  *  If,  therefore,  it  has  been  the 
well-established  and  generally  well-known  custom 
and  the  usual  course  of  business  for  the  carrier 
to  make  personal  delivery  to  the  consignee  where 
such  consignee  can  be  reached  over  the  line  of  the 
railroad,  such  custom  forms  a  part  of  the  contract 
of  carriage,  and  the  railroad  company  is  obligated 
to  make  a  personal  delivery." 

The  rules  of  the  Chicago  Car  Service  Association 
of  September  1,  1904,  provide  as  follows: 

"Rule  3.  The  placing  of  a  car  upon  a  private 
track  shall  be  construed  as  notice  of  delivery. 


490 

Eule  15.  (a)  Cars  containing  freight  to  be  de- 
livered from  track,  warehouses  or  platforms,  shall 
be  switched  to  points  of  delivery  as  soon  as  prac- 
ticable after  arrival. 

(b)    The  delivery  of  cars  consigned  or  ordered 
to  private  tracks   or  designated  public  delivery 
tracks,  shall  be  considered  to  have  been  effected 
when  such  cars  have  been  placed  on  the  track  de- 
signated, or,  if  such  tracks  be  full,  when  the  road 
tenders  the  cars  by  giving  notice  of  their  arrival.'1 
Car  service  and  demurrage  rules,  if  they  are  reason- 
able and  just,  are  usually  upheld  by  the  courts. 

Millers  Assn.  v.  Phila.  &  R.  Ry.  Co.,  8  I.  C.  B., 

531. 

Schumacher  v.  C.  &  N.  Ry.  Co.,  207  111.,  199. 
In  my  opinion  the  regulation  that  the  carrier  may 
tender  cars  by  giving  notice  of  their  arrival,  when  the 
consignee's  tracks  are  full,  is  a  reasonable  and  just 
regulation. 

The  question,  therefore,  resolves  itself  into  a  question 
of  fact.  The  carrier  has  the  right  to  charge  de- 
murrage if  cars  are  not  unloaded  within  forty-eight 
hours  after  delivery.  If  the  tracks  of  the  consignee 
are  occupied,  the  consignee  has,  by  its  own  act,  pre- 
vented a  delivery.  The  carrier,  therefore,  performs 
its  duty  in  such  a  case  when  it  tenders  the  cars  or 
gives  notice  of  their  arrival.  If  such  notice  was  given 
and  the  consignee  could  not  receive  the  cars,  the  car- 
rier would,  in  my  opinion,  be  entitled  to  charge  de- 
murrage. If,  in  fact,  the  track  of  the  consignee  was 
not  occupied,  a  personal  delivery  is  essential  and  a  no- 
tice will  not  suffice. 


491 


WHETHER  A  STEAMSHIP  COMPANY,  THE  CONSIGNEE  OR  CON- 
SIGNOR SHOULD  SUSTAIN  THE  LOSS  WHEN  GOODS  ARE 
BURNED  ON  A  DOCK  AND  AS  TO  THE  APPLICATION  OF  THE 
HARTER  ACT,  AND  THE  VESSEL  OWNERS'  LIMITED  LIABIL- 
ITY ACT  TO  SUCH  A  CASE. 

(Sanford  Manufacturing  Company,  January  5,  1905.) 
"A  good  deal  of  our  California  business  goes 
by  the  way  of  New  York,  via  the  American-Ha- 
waiian   Steamship    Company.      When    this    com- 
pany's docks  were  burned,  a  short  time  ago,  we 
had  several  shipments  which  had  lain  on  their 
docks  for  ten  days  or  more,  which  were  burned 
in  the  fire.   All  of  these  goods  were  sold  F.  0.  B. 
New  York.    We  hold  the  company's  bill  of  lading 
for  these  shipments.     Will  you  kindly  advise  us 
whose  loss  this  is,  the  American-Hawaiian  Steam- 
ship Company's,  the  consignees'  or  ourselves!" 
The  first  question  to  be  determined  is  whether  the 
steamship  company  is  liable  for  the  loss  of  the  goods. 
I  have  not  been  furnished  with  a  copy  of  the  bills  of 
lading  under  which  the  shipments  were  made.     It  is 
stated  that  bills  of  lading  were  issued,  and  I  assume 
that  they  were  issued  by  the  steamship  company. 

A  carrier  may  limit  its  liability  under  certain  condi- 
tions by  special  contract  against  liability  for  loss,  or 
damage,  except  in  certain  cases  hereafter  referred  to. 
In  the  absence  of  the  bills  of  lading  I  must  assume  that 
no  such  exemption  was  contracted  for. 

To  render  the  steamboat  company  liable,  a  proper 
delivery  must  have  been  made  to  it.  To  constitute  the 
delivery  there  must  be  a  change  of  possession  from  the 
shipper  to  the  carrier  or  from  the  initial  carrier  to  the 
connecting  carrier,  and  the  former  must  relinquish  all 
custody  and  control  of  the  property  for  the  time  being, 
leaving  the  exclusive  possession  to  the  carrier. 

5  Am.  Eng.  Enc.  Law  (2nd  ed.),  p.  182. 
Hutchinson  on  Carriers,  Sec.  94  (2nd  ed.). 
Delivery  to  a  ship  or  vessel  is  complete  as  soon  as 
some  agent  of  the  owner  of  the  ship  receives  the  goods ; 


492 

and  they  may  be  received  upon  the  ship,  on  the  wharf, 
on  the  beach  or  at  a  warehouse,  or  at  any  other  place 
at  which  an  agent,  duly  authorized,  may  agree  to  re- 
ceive them;  and  in  all  such  cases  the  liability  of  the 
master  and  owners  as  carriers  commences  at  the  mo- 
ment of  such  acceptance. 

Hutchinson  on  Carriers,  Sec.  95  (2d  ed.). 
Scott  v.  Baltimore,  C.  &  R.  Steamboat  Co.,  19 

Fed.,  56,  58. 

Story  on  Bailments,  534  (9th  ed.). 
And  the  issuance  of  a  bill  of  lading  is  a  waiver  of  ob- 
jections to  the  sufficiency  of  a  delivery : 

Goodard  v.  Mallary,  52  Barb.,  87. 
The  delivery  in  this  case  was,  therefore,  completed, 
and,  a  bill  of  lading  having  issued,  the  steamship  com- 
pany is  chargeable  as  a  common  carrier  and  not  as  a 
warehouseman. 

The  liability  of  a  carrier  as  a  common  carrier  begins 
with  the  actual  delivery  of  the  goods  for  transporta- 
tion, and  nothing  remains  to  be  done  by  the  owner  be- 
fore shipment. 

Grand  Tower  Co.  v.  Ullman,  89  111.,  244. 
I.  C.  R.  R.  Co.  v.  Smyser,  38  111.,  354. 
6  Cyc.,  pp.  414-415. 

The  liability  of  a  common  carrier,  in  the  absence 
of  a  special  agreement  or  statutory  restriction,  is  that 
of  an  insurer  against  all  loss  or  damage  during  trans- 
portation, from  whatever  cause,  except  the  act  of  God 
or  the  public  enemy  or  public  authority,  or  the  act  of 
the  shipper,  or  the  inherent  nature  of  the  goods 
shipped.  A  warehouseman,  however,  is  liable  only 
for  failure  to  use  ordinary  care. 

Where  goods  are  shipped  by  water,  a  claim  for  loss 
may  be  complicated  by  the  provisions  of  the  vessel 
owners'  limited  liability  act.  That  act  provides: 

(United  States  Revised  Statutes,  Sec.  4282.) 
(Loss  by  fire.)  "No  owner  of  any  vessel  shall  be 
liable  to  answer  for  or  make  good  to  any  person 
any  loss  or  damage  which  may  happen  to  any  mer- 
chandise whatsoever,  which  shall  be  shipped,  taken 
in,  or  put  on  board  any  such  vessel,  by  reason  or 


493 

by  means  of  any  fire  happening  to  or  on  board  the 
vessel,  unless  such  fire  is  caused  by  the  design  or 
neglect  of  such  owner." 

It  will  be  noted  that  this  act  exempts  the  owner  from 
liability  for  loss  of  goods  "by  reason  or  by  means  of" 
a  fire  that  happens  "to  the  ship"  or  "on  board"  of 
her.  This  statute  is  copied  from  the  second  section 
of  Act  26,  Geo.  Ill,  c.  86,  which  received  a  judicial 
interpretation  by  the  Court  of  Queen's  Bench  in  More- 
wood  v.  Pollok,  1  El.  &  BL,  743.  It  was  there  held  that 
the  act  did  not  extend  to  the  case  of  a  fire  occurring  on 
a  lighter  in  which  cotton  was  being  conveyed  from  the 
vessel  to  the  shore.  The  United  States  courts  have 
followed  this  interpretation  and  have  held  that  to  es- 
cape liability  the  fire  must  "happen  to"  or  "on  board 
the  vessel." 

In  the  case  of  "The  Egypt,"  25  Fed.,  320  (1885), 
involving  a  claim  for  merchandise  which  had  been  land- 
ed on  the  docks  and  burned  in  the  great  fire  which  de- 
stroyed the  piers  of  several  of  the  transatlantic  com- 
panies at  New  York,  January  31,  1883,  Judge  Brown 
said: 

"  I  do  not  think  that  the  phraseology  of  the  stat- 
ute, though  capable  of  this  broad  construction,  was 
intended  to  cover  fire  originating  on  the  dock  and 
happening,  to  goods  after  they  had  been  landed. ' ' 
The  losses  occurring  from  this  fire  came  before  the 
courts  many  times  for  adjudication,  and  the  decision  in 
The  Egypt  has  been  upheld  by  the  United  States  Su- 
preme Court  in  Constable  v.  Nat'l  Steamship  Com- 
pany, 154  U.  S.,51  (1894). 

To  the  same  effect  are  the  following  cases : 
Richardson  v.  Goddard,  23  How.,  37. 
The  City  of  Clarkville,  94  Fed.,  201. 
Salmon  Falls  Mfg.  Co.  v.  Tangier,  21  Fed., 

Case  No.  12265. 

I  am  of  the  opinion,  therefore,  that  this  act  has  no 
application.  The  steamboat  company,  as  I  understand 
it,  issued  bills  of  lading  for  the  shipment.  I  am  not 
informed  as  to  the  stipulations  contained  in  these  bills 


of  lading.  Generally,  however,  carriers  usually  exempt 
themselves  from  losses  by  fire  by  special  stipulation  to 
that  effect.  And  in  most  of  the  marine  bills  of  lading 
which  have  come  before  the  courts  for  examination 
such  stipulations  occur.  A  bill  of  lading  is  both  a  re- 
ceipt and  a  contract  of  carriage,  and  as  a  receipt  it  is 
open  to  explanation. 

Cunard  S.  8.  Co.  v.  Kelly,  115  Fed.,  678,  683 

(1902). 

That  the  common  law  liability  of  a  carrier  by  water 
may  be  limited  by  special  contract  not  due  to  negli- 
gence or  fault  is  well  established. 

N.  J.  Steam  Nav.  Co.  v.  Merchants'  Bank, 

6  How.,  344. 

York  Mfg.  Co.  v.  111.  Cent.  R.  R.,  3  Wall.,  107. 
The  Victory,  168  U.  S.,  410. 
The  Queen  of  the  Pacific,  180  U.  S.,  49,  56,  57. 
Saunders  v.  Southern  Ry.  Co.,  128  Fed.,  15 

(1904). 

The  Harter  act  of  February  13,  1893  (Sec.  4,  Ch. 
105,  27  U.  S.  Stat.  L.,  445),  provided  that  it  shall  be 
the  duty  of  owners,  etc.,  of  vessels  transporting  mer- 
chandise to  issue  bills  of  lading,  and  such  document 
shall  be  prima  facie  evidence  of  the  receipt  of  the  mer- 
chandise therein  described. 

Section  1  of  that  act  provides  that  it  shall  not  be  law- 
ful for  a  carrier  by  water  to  limit  its  liability  against 
liability  for  loss  or  damage  arising  from 

"Negligence,  fault  or  failure  in  proper  loading, 
stowage,  custody,  care  or  proper  delivery." 
Section  2  prohibits  such  a  carrier  from  inserting  in 
any  bill  of  lading  any  agreement  whereby  the  obliga- 
tions to 

"exercise  due  diligence  (to)  properly  equip,  man, 
provision  and  outfit  said  vessel,  and  to  make  said 
vessel  seaworthy  and  capable  of  performing  her 
intended  voyage,  or  whereby  the  obligation  of  the 
master,  officers,  agents  or  servants  to  carefully 
handle  and  stow  her  cargo  and  to  care  for  and 
properly  deliver  same,  shall  in  any  wise  be 
lessened,  weakened  or  avoided." 


495 

Section  3  provides: 

"That  if  the  owner  of  any  vessel  transporting 
merchandise  or  property  to  or  from  any  port  in 
the  United  States  of  America  shall  exercise  due 
diligence  to  make  the  said  vessel  in  all  respects 
seaworthy  and  properly  manned,  equipped,  and 
supplied,  neither  the  vessel,  her  owner  or  owners, 
agent  or  charterers  shall  become  or  be  held  re- 
sponsible for  damage  or  loss  resulting  from  faults 
or  errors  in  navigation  or  in  the  management  of 
said  vessel,  nor  shall  the  vessel,  her  owner  or  own- 
ers, charterers,  agent,  or  master  be  held  liable 
for  losses  arising  from  dangers  of  the  sea  or  other 
navigable  waters,  acts  of  God,  or  public  enemies, 
or  the  inherent  defect,  quality  or  vice  of  the  thing- 
carried,  or  from  insufficiency  of  package  or  seizure 
under  legal  process,  or  for  loss  resulting  from  any 
act  or  omission  of  the  shipper  or  owner  of  the 
goods,  his  agent  or  representative,  or  from  saving 
or  attempting  to  save  life  or  property  at  sea,  or 
from  any  deviation  in  rendering  such  service." 
There  is  nothing,  however,  in  the  Harter  act  which 
prohibits  a  carrier  by  water  from  limiting  its  liability 
for  losses  by  fire,  provided  such  fire  is  not  due  to  its 
negligence,  etc. 

In  many  cases  stipulations  have  been  held  valid  in 
bills  of  lading  which  exempt  carriers  from  losses 

' '  by  fire  before  loading  in  the  ship  or  after  unload- 
ing"; 

"fire  at  any  time  and  place," 
"not  to  be  held  liable  for  any  damages  to  any 
goods  which  are  capable  of  being  covered  by  in- 
surance. ' 

The  Egypt,  25  Fed.,  323. 

Scott  v.  Baltimore,  C.  &  R.  Steamboat  Co.,  19 

Fed.,  56. 
Constable  v.  National  Steamship  Co.,  154  U. 

S.,  51. 

The  carrier  cannot,  however,  exempt  itself  from  the 
consequences  of  its  own  negligence,  either  at  common 
law  or  under  the  provisions  of  the  Harter  act.  But  in 


496 

New  York  a  carrier  may  limit  its  liability  even  for 
gross  negligence,  although  this  doctrine  is  not  followed 
in  the  federal  courts.  I  am  of  the  opinion,  however, 
that  a  bill  of  lading  issued  by  a  steamship  company  for 
transportation  on  high  seas  is  governed  by  the  federal 
law  (Barter  act),  and  that  the  doctrine  of  the  New 
York  courts  has  no  application  to  the  present  case; 
and,  assuming  that  there  is  no  stipulation  in  the  bill  of 
lading,  I  am  of  the  opinion  that  the  steamship  company 
is  liable.  If  the  fire  was  occasioned  by  the  negligence 
of  the  steamship  company  it  is  liable  in  any  event. 

The  initial  carrier  (railroad  company)  may  be  liable 
for  the  loss,  even  though  the  goods  have  been  delivered 
to  a  connecting  carrier.  At  common  law  a  carrier  was 
under  no  obligation  to  carry  goods  beyond  its  own  line. 
But  it  may  specially  contract  to  do  so.  This  may  be 
done  by  the  issuance  of  a  through  bill  of  lading,  which 
does  not  restrict  the  carriers'  liability  to  its  own  line. 
The  courts  of  Illinois  have  ruled  that  the  initial  carrier, 
by  receiving  goods  for  transportation,  consigned  to  a 
point  beyond  its  own  line,  is  responsible  as  a  common 
carrier  over  the  entire  route. 

7.  C.  R.  R.  Co.  v.  Frankenburg,  54  111.,  88. 

The  carrier  may,  however,  by  special  contract  with 
the  shipper,  and  not  by  general  notice,  limit  its  liabil- 
ity to  such  damage  or  loss  as  may  occur  on  its  own 
line  of  carriage.  If  the  shipper  takes  a  receipt  for  the 
goods  or  bill  of  lading  from  the  carrier,  containing  con- 
ditions limiting  the  liability  of  the  carrier  in  such  a 
way  as  it  is  competent  for  him  to  do  with  knowledge 
on  the  part  of  the  shipper  of  such  conditions  contained 
in  such  receipt  or  bill  of  lading,  it  becomes  his  contract 
as  fully  as  if  he  had  signed  it. 

7.  C.  R.  R.  v.  Frankenberg,  supra. 
5  Ency.  of  Law  (2d  Ed.),  p.  639. 

And  if  the  shipper  assent  to  the  restriction  of  liabil- 
ity he  is  bound  thereby. 

Inasmuch,  however,  as  the  bill  of  lading  is  not  before 
me,  I  can  refer  only  to  the  general  rules  applicable  to 
the  subject.  Whether  the  loss  falls  upon  the  consignor 
or  consignee,  in  a  case  where  the  carrier  is  not  liable, 


497 

depends  upon  the  contract  between  the  parties.  The 
goods  were  sold  f.  o.  b.  New  York.  The  effect  of  such 
a  clause  is  discussed  in  my  opinion  to  the  Association 
under  date  of  October  24,  1903.  "F.  o.  b.  New  York" 
means  that  the  goods  are  sold  free  of  all  expense  to  the 
consignee  up  to  that  point  and  that  the  expense  there- 
after is  upon  the  consignee.  The  consignor  in  such  a 
case  must  pay  the  freight  up  to  the  f.  o.  b.  point,  and 
thus  the  initial  carrier  becomes  the  agent  of  the  con- 
signor, in  whom  the  title  remains  until  the  goods  ar- 
rive at  New  York.  The  question  arises  whether  the 
title  passes  to  the  consignee  before  the  goods  are  placed 
on  board  the  vessel,  inasmuch  as  f.  o.  b.  is  an  abbrevi- 
ation for  "free  on  board."  I  am  of  the  opinion,  how- 
ever, that  the  title  and  the  consequent  risk  pass  to  the 
consignee  upon  delivery  to  the  steamship  company. 
F.  o.  b.  does  not  mean  that  the  title  will  not  pass  until 
the  goods  are  placed  on  board  the  vessel,  but  only 
that  the  goods  will  be  placed  on  board  free  of  expense 
to  the  consignee.  When  the  goods  are  delivered  to 
the  steamship  company  the  consignor  has  done  all  he 
is  obliged  to  do  under  the  contract.  The  consignee  is 
obligated,  under  the  contract,  to  pay  the  ocean  freight 
and  the  steamship  company  thus  becomes  the  agent  of 
the  consignee.  Under  such  circumstances,  if  the  car- 
rier is  not  liable  the  loss  would  fall  upon  the  consignee, 
as  a  delivery  has  been  made  to  his  agent.  The  ques- 
tion of  title  and  risk,  however,  is  a  question  of  inten- 
tion, and  the  fact  that  a  sale  is  f.  o.  b.  is  not  conclusive. 
For  instance,  if  the  bill  of  lading  is  issued  to  the  order 
of  the  consignor,  and  a  draft  is  attached  to  the  bill 
of  lading,  this  is  effectual  to  reserve  the  jus  disponendi 
of  the  goods  in  the  consignor.  Again,  it  is  possible 
for  one  of  the  parties  to  assume  the  risk  of  transit, 
even  though  the  title  is  in  the  other  party.  However, 
as  the  contract  is  not  before  me  I  express  no  opinion 
upon  this  phase  of  the  case. 


498 


THE  APPLICATION  AND  SCOPE  OF  THE  FOREIGN  CORPORATION 
LAW  OF  SOUTH  DAKOTA  AND  AS  TO  COMPLIANCE  THERE- 
WITH. • 

(Rubber  Paint  Company,  January  5,  1905.) 
' l  Will  you  kindly  inform  us  whether  our  general 
counsel,  Mr.  Levy  Mayer,  has  ever  furnished  an 
opinion  to  any  member  of  our  Association  regard- 
ing the  application  and  scope  of  the  law  against 
foreign  corporations  now  in  force  in  South  Da- 
kota 1  If  so,  will  you  kindly  send  us  a  copy  of  such 
opinion?  We  had  occasion  to  bring  suit  recently 
against  a  citizen  of  South  Dakota  for  a  bill  of 
merchandise  shipped  and  billed  to  him  from  this 
town,  on  an  order  taken,  subject  to  our  approval 
here,  and  the  South  Dakota  lawyer  seems  to  think 
we  must  comply  with  their  anti-foreign  corpora- 
tion law." 

The  constitution  of  South  Dakota  (Art.  VII,  Sec.  6) 
provides : 

"No  foreign  corporation  shall  do  business  in 
this  State  without  having  one  or  more  places  of 
business  and  an  authorized  agent  or  agents  in  the 
same,  upon  whom  process  may  be  served. ' ' 

The  civil  code  of  South  Dakota  provides  (Sec.  4369) : 
"No  corporation  created  or  organized  under 
the  laws  of  any  other  State  or  Territory  shall 
transact  any  business  within  this  State  or  acquire, 
hold,  dispose  of  property,  real,  personal  or  mixed, 
within  this  State,  or  sue  or  maintain  any  action 
at  law  or  otherwise,  in  any  of  the  courts  of  this 
State,  until  such  corporation  shall  have  filed  in 
the  office  of  the  Secretary  of  State  a  duly  authenti- 
cated copy  of  its  charter  or  articles  of  corporation, 
or  shall  have  complied  with  the  provisions  of  this 
act.  Provided,  That  the  provisions  of  this  act 
shall  not  apply  to  corporations  and  associations 
created  for  religious  and  charitable  purposes 
only.  * ' 

The  code  further  provides  (Sec.  4371)  that  such  cor- 


499 

poration  shall  appoint  an  agent,  who  shall  reside  at 
some  accessible  point  in  this  State,  duly  authorized  to 
accept  service  of  process,  and  process  served  on  him 
shall  be  due  service  on  the  corporation.  A  duly  au- 
thenticated copy  of  the  appointment  of  the  agent  shall 
be  filed  and  recorded  in  the  office  of  the  Secretary  of 
State  and  of  the  Registrar  of  Deeds  in  the  county 
where  the  agent  resides,  and  a  certified  copy  thereof 
is  made  conclusive  evidence  of  the  appointment  and 
authority  of  the  agent.  It  is  further  provided  that  no 
action  shall  be  maintained  on  any  contract  made  by 
the  corporation  within  the  State  unless  the  corporation 
has  complied  with  the  act.  Any  person  acting  within 
the  State  as  agent  of  a  foreign  corporation,  which  has 
not  complied  with  the  act,  is  punishable  by  a  fine  of 
from  ten  to  one  hundred  dollars  or  imprisonment  from 
ten  to  thirty  days,  or  both.  The  code  further  provides 
(Sec.  6199)  that  suit  may  be  begun  by  attachment 
against  any  foreign  corporation  which  has  not  com- 
plied with  the  laws  of  the  State  for  appointing  an 
agent  or  is  removing  or  has  assigned  its  property  with 
intent  to  defraud  creditors. 

In  my  opinion  to  the  Association  rendered  July  17, 
1901,  in  response  to  an  inquiry  of  Belding  &  Co.,  I  dis- 
cussed the  foreign  corporation  laws  of  several  States, 
among  others  South  Dakota,  and  upon  the  method  of 
doing  business  therein  referred  to.  I  stated  that  Beld- 
ing Bros,  need  not  comply  with  the  laws  of  South  Da- 
kota in  order  to  collect  accounts  on  goods  sold  accord- 
ing to  their  statement  of  facts.  And  in  my  opinion  of 
July  18,  1901,  in  response  to  an  inquiry  from  Parlin 
&  Orendorff  Company,  I  discussed  what  constitutes 
''doing  business  in  a  foreign  State."  I  there  stated 
that  what  the  law  is  depends  very  much  upon  the  pe- 
culiar facts  in  each  case.  I  have  not  before  me,  in 
this  instance,  sufficient  facts  to  enable  me  to  express  an 
opinion  as  to  whether  the  method  of  selling  goods  con- 
stitutes "doing  business"  in  the  State  of  South  Da- 
kota. Unless  a  corporation  is  "doing  business"  in  a 
foreign  State,  it  is  not  subject  to  the  laws  governing 
foreign  corporations.  However,  it  is  generally  held 


500 

that  where  a  foreign  corporation  solicits  orders  in  the 
State  through  commercial  travelers,  the  orders  being 
transmitted  to  the  corporation  at  its  domicile  and  there 
filled,  the  sale  is  considered  as  made  at  the  domicile 
of  the  corporation.  The  foreign  corporation  in  such 
a  case  is  not  doing  business  in  the  foreign  State,  nor 
subject  to  the  foreign  corporation  laws. 

Knitting  Co.  v.  Bronner,  45  N.  Y.  Supp.,  714. 

Holden  v.  Aultman,  169  U.  S.,  81. 

Toledo  Commercial  Co.  v.  Mfg.  Co.,  55  Ohio 
St.,  217. 

Varnish  Co.  v.  Council,  32  N.  Y.  Sup.,  492. 

Coit  v.  Sutton,  102  Mich.,  324. 

It  is  everywhere  held  that  bringing  suit  is  not ' '  doing 
business"  within  the  State. 

Beale,  For.  Corp.,  Sec.  209,  and  cases  cited. 
In  so  far  as  the  statute  prevents  a  foreign  corpora- 
tion, not  doing  business  in  South  Dakota  from  main- 
taining action  and  enforcing  a  contract  thus  legally 
made,  I  am  of  the  opinion  that  it  is  unconstitutional. 
I  discussed  this  question  in  my  opinions  of  October  8, 
1901,  January  15,  1902,  and  March  24,  1903,  rendered 
to  the  Association  in  regard  to  the  foreign  corporation 
laws  of  Colorado,  and  stated  that  such  a  provision  of 
a  foreign  corporation  statute  was  unenforceable.  I 
there  stated  that  the  act  could  apply  only  to  foreign 
corporations  "doing  business"  within  the  State.  No 
State  can  interfere  with  interstate  commerce,  or  ex- 
clude a  corporation  from  engaging  in  interstate  com- 
merce. In  the  conduct  of  such  business,  such  corpora- 
tions are  entitled  to  the  protection  of  the  State  laws 
and  a  denial  of  such  protection  is  a  denial  of  the  equal 
protection  of  the  laws,  contrary  to  the  14th  Amend- 
ment to  the  Constitution  of  the  United  States.  The 
subject  is  fully  discussed  in  my  opinion  of  March  24, 
1903,  and  cases  cited  in  support  of  my  position. 

I  have  not  sufficient  facts  before  me  in  this  case  to 
express  definitely  an  opinion  as  to  whether  the  Rubber 
Paint  Company  is  "doing  business"  in  South  Dakota 
or  engaged  in  interstate  commerce,  but  if  the  trans- 
action comes  within  the  example  above  given,  I  am  of 


501 

the  opinion  that  it  is  not  necessary  for  the  Paint  Com- 
pany to  comply  with  the  foreign  corporation  law  of 
South  Dakota  to  maintain  its  action. 


NOTE: — It  is  important  that  in  connection  with  this  opinion,  should 
be  read  the  later  opinion  of  April  20,  1907,  for  The  Electric  Appliance 
Co.  in  reference  to  the  foreign  corporation  law  of  South  Dakota  and 
as  to  the  advisability  of  compliance  therewith  in  view  of  the  decisions 
of  the  South  Dakota  courts. — Ed. 


AS  TO  WHETHER  CERTAIN  ALUMINUM  DISCS  USED  FOR  AD- 
VERTISING PURPOSES  COME  WITHIN  THE  FEDERAL  STAT- 
UTES PROHIBITING  COUNTERFEITING  OF  COINS. 

(M.  Born  &  Co.,  January  5,  1905.) 
"We  are  sending  out  in  clothes  the  enclosed 
(aluminum  discs)  as  an  advertising  novelty,  and 
have  been  notified  to-day  by  the  secret  service 
office  that  we  must  discontinue,  as  these  aluminum 
discs  are  being  used  throughout  the  country  as 
money. 

Inasmuch  as  it  is  customary  for  these  discs  to 
be  used  by  hundreds  of  advertisers  throughout 
the  country,  and  the  manufacturers  tell  us  that 
they  are  turning  them  out  by  the  million  for  the 
different  advertisers,  we  send  you  this,  asking  you 
to  give  us  an  opinion  as  to  whether  we  are  in  vio- 
lation of  the  law  or  not." 

The  aluminum  in  question  is  light  in  weight  and 
color,  and  slightly  larger  than  a  ten  cent  piece.  Upon 
one  side  of  the  disc  certain  advertising  matter  ap- 
pears. 

The  section  of  the  Federal  Statutes  on  the  subject 
of  counterfeiting  is  as  follows : 

"Sec.  5457.  Every  person  who  falsely  makes, 
forges  or  counterfeits,  or  causes  or  procures  to  be 
falsely  made,  forged  or  counterfeited,  or  willingly 
aids  or  assists  in  falsely  making,  forging  or  coun- 
terfeiting any  coin  or  bars  in  resemblance  or 
similitude  of  the  gold  or  silver  coins  or  bars,  which 
have  been,  or  hereafter  may  be,  coined  or  stamped 
at  the  mints  and  assay  offices  of  the  United 


502 

States,  or  in  resemblance  or  similitude  of  any  for- 
eign gold  or  silver  coin  which  by  law  is,  or  here- 
after may  be,  current  in  the  United  States,  or 
are  in  actual  use  and  circulation  as  money  within 
the  United  States,  or  who  passes,  utters,  pub- 
lishes, or  sells,  or  attempts  to  pass,  utter,  pub- 
lish, or  sell,  or  bring  into  the  United  States  from 
any  foreign  place,  knowing  the  same  to  be  false, 
forged  or  counterfeit,  with  intent  to  defraud  any 
body  politic  or  corporate,  or  any  other  person 
or  persons  whatsoever,  or  has  in  his  possession 
any  such  false,  forged,  or  counterfeited  coin  or 
bars,  knowing  the  same  to  be  false,  forged  or 
counterfeited,  with  intent  to  defraud  any  body 
politic  or  corporate,  or  any  other  person  or  per- 
sons whatsoever,  shall  be  punished  by  a  fine  of 
not  more  than  five  thousand  dollars,  and  by  im- 
prisonment at  hard  labor  not  more  than  ten 
years. 

Sec.  5458.  Every  person  who  falsely  makes, 
forges  or  counterfeits,  or  causes,  or  procures  to 
be  falsely  made,  forged,  or  counterfeited,  or  will- 
ingly aids,  or  assists  in  falsely  making,  forging  or 
counterfeiting,  any  coin  in  the  resemblance  of  (or) 
similitude  of  any  of  the  minor  coinage  which  has 
been,  or  hereafter  may  be,  coined  at  the  mints 
of  the  United  States;  or  who  passes,  utters,  pub- 
lishes or  sells  or  brings  into  the  United  States 
from  any  foreign  place,  or  has  in  his  possession, 
any  such  false,  forged,  or  counterfeited  coin,  with 
intent  to  defraud  any  person  whatsoever,  shall  be 
punished  by  a  fine  of  not  more  than  one  thousand 
dollars  and  by  imprisonment  at  hard  labor  not 
more  than  three  years." 

Section  5457  applies  to  gold  and  silver  coins,  and 
5458  to  minor  coins. 

The  discs  in  question  are  used  solely  for  advertising 
purposes.  As  I  understand  it,  the  discs  are  placed 
in  merchandise  which  is  sold,  and  are  not  sent  sep- 
arately through  the  mails.  The  only  question  to  be 
determined,  therefore,  is  whether  the  offense  of  coun- 


503 

terfeiting  has  been  committed.  To  constitute  the  of- 
fense of  making  counterfeit  coin,  there  must  be  re- 
semblance or  similitude  to  a  genuine  coin.  It  must 
be  sufficiently  exact  as  to  impose  on  or  deceive  persons 
of  ordinary  observation,  using  such  caution  as  is  or- 
dinarily exercised  by  prudent  men  in  the  particular 
transaction  in  which  they  are  engaged,  although  the 
counterfeit  would  not  deceive  a  person  who  was  ex- 
pert or  has  particular  experience  in  such  matters. 
Although  the  question  of  similitude  is  ordinarily  for 
the  jury,  I  am  of  the  opinion  that  the  making  or  using 
of  the  disc  in  question  does  not  constitute  counterfeit- 
ing, as  there  is  not  sufficient  similitude  to  any  genuine 
coin. 

See  the  following  authorities : 

U.  8.  v.  Aylward,  Fed.  Gas.,  14,482. 

U.  8.  v.  Hopkins,  26  Fed.,  443. 

11  Cycl.,  pp.  305-6. 

7  Ency.  of  Law  (2nd  Ed.),  p.  877. 

2  Fed.  Stat.  Ann.,  Sec.  5457  and  notes. 

U.  8.  v.  Briefer,  Fed.  Gas.,  14,642. 

U.  8.  v.  Morrow,  Fed.  Gas.,  15,819. 

U.  S.  v.  Hargrave,  Fed.  Gas.,  15,306. 

U.  S.  v.  Burns,  5  McLean,  23. 

WHETHER  A  CARRIER  IS  LIABLE  FOR  THE  TIME  OF  A  SALES- 
MAN LOST  ON  ACCOUNT  OF  DELAY  IN  TRANSPORTATION  OF 
HIS  BAGGAGE. 

(Selz,  Schwab  &  Co.,  January  6,  1905.) 
"You  will  no  doubt  remember  the  conversation 
our  Mr.  J.  Harry  Selz  had  with  you  this  noon  in 
regard  to  a  claim  we  had  placed  against  the  C.  & 
N.  W.  By.,  for  two  days'  time  our  salesman  lost 
owing  to  the  failure  of  the  baggage  man  to  put  his 
trunk  on  the  train. 

We  are  enclosing  herewith  a  copy  of  our  claim 
as  filed  against  the  railroad  company,  also  their 
original  letter  declining  the  claim,  and  will  ask 
you  to  please  refer  the  matter  to  your  counsel, 
Mr.  Levy  Mayer." 


504 

The  letter  of  Selz,  Schwab  &  Co.  to  the  railroad 
company  states : 

"Enclosed  herewith  please  find  claim  for  $32.40, 
same  representing  the  value  of  our  salesman's 
tune  (two  days)  and  his  expenses  for  this  time. 
In  explanation  will  say  that  our  salesman,  Mr. 
Harry  Mehle,  writes  us  under  date  of  October 
29th  that  he  left  Battle  Creek,  Iowa,  Friday  after- 
noon 'all  set  and  cocked  to  see  both  of  my  cus- 
tomers at  Mapleton  and  get  out  that  night  for 
Perry,  Iowa,  to  make  connections  Saturday  morn- 
ing for  Valley  Junction,  where  I  sell  Jacobson 
always  on  Saturday  morning.'  Your  agent  at 
Battle  Creek,  however,  failed  to  put  his  baggage 
on  the  train,  and  as  the  next  train  Saturday  morn- 
ing did  not  go  until  9:30  he  was  too  late  to  do 
any  business  in  Mapleton  on  Saturday,  and  he, 
therefore,  lost  both  of  these  days,  as  he  says  that 
neither  accounts  at  Mapleton  would  look  at  his 
samples  on  Saturday.  He  was  unable,  therefore, 
to  do  anything  at  all  until  the  following  Monday, 
and  in  addition  to  this  he  had  lost  his  opportunity 
to  make  Valley  Junction  to  sell  his  customer  there 
who  only  buys  on  Saturday. 

Kindly  give  this  claim  your  prompt  attention, 
acknowledge  receipt  of  this  letter,  giving  us  your 
number,  and  oblige." 

In  my  opinion  rendered  to  the  Association  of  date 
October  1,  1902,  I  discussed  the  liability  of  a  carrier 
for  baggage  and  what  constitutes  "baggage."  It  is 
there  stated  that  merchandise  samples  are  not  "bag- 
gage," and  the  carrier  is  not  subject  to  its  common  law 
liability  therefor  unless  it  accepts  the  samples  as  bag- 
gage with  notice  of  their  character. 

It  is  a  question  of  fact,  in  this  instance,  as  to  whether 
the  carrier  or  the  agent  undertook  to  carry  the  samples 
as  baggage  with  knowledge  of  that  fact.  A  common 
carrier  who  receives  merchandise  as  baggage  with 
notice  of  its  character  is  liable  for  its  loss. 

L.  S.  &  M.  S.  Ry.  Co.  v.  Hochstim,  67  111.  App., 
514. 


505 

Ry.  Co.  v.  Doges,  57  Ohio  St.,  38,  47  N.  E., 

1039. 

The  carrier  may  have  either  actual  or  constructive 
notice  of  the  contents  of  the  trunks  offered  as  baggage. 
If  the  carrier  has  actual  notice,  it  is  liable.  But  the 
carrier  is  not  bound  to  inquire  as  to  the  contents  of 
the  trunk.  If,  however,  a  passenger  tenders  merchan- 
dise to  the  carrier  to  be  carried  as  baggage,  packed  in 
such  a  way  that  the  carrier,  or  its  agent,  can  see  and 
must  know  that  it  is  merchandise,  and  he,  notwith- 
standing, accepts  it  for  carriage,  he  will  be  responsible 
for  it  in  case  it  is  lost. 

Hutchinson,  Carriers  (2d  Ed.),  Sec.  685. 
In  some  cases  the  size  or  construction  of  the  trunk, 
or  in  some  States  its  great  weight,  may  put  the  agent 
upon  notice  of  the  character  of  its  contents,  although 
this  is  entirely  a  question  of  fact. 

In  Massachusetts,  the  contrary  is  held  and  an  actual 
agreement  is  necessary,  Ailing  v.  R.  R.,  126  Mass.,  121. 
But  in  Iowa,  where  the  contract  for  transportation  in 
question  was  entered  into,  and  according  to  the  laws 
of  which  it  is  interpreted,  the  Supreme  Court  said  in 
Weber  Co.  v.  Ry.  Co.,  113  la.,  188,  84  N.  W.,  1042: 

"We  should  not  care  to  go  as  far  as  the  Massa- 
chusetts court  has  gone,  and  hold  that  a  baggage 
agent  has  not  the  implied  authority  to  accept  mer- 
chandise as  baggage,  waiving  the  objection  on  that 
ground. ' ' 

Furthermore,  it  is  held  that  there  is  an  implied  un- 
dertaking on  the  part  of  the  carrier  that  the  baggage 
should  be  sent  on  the  same  train  that  the  passenger 
takes,  if  the  baggage  is  checked  a  reasonable  time  be- 
fore the  departure  of  the  train,  and  the  carrier  ought 
not  without  permission  send  baggage  by  a  later  train 
unless  in  a  strong  case  of  necessity. 

Wald  v.  R.  R.  Co.,  162  111.,  545  (citing  cases). 
However,  if  the  trunk  is  carried  as  baggage  without 
notice  at  the  time  that  it  contains  merchandise  samples, 
the  carrier  is  not  subject  to  any  common  law  liability. 
The  position  of  the  carrier  is  then  that  of  gratuitous 
bailee,  and  it  is  liable  only  for  gross  negligence. 


Mich.  Cent.  R.  R.  Co.  v.  Carrow,  73  111.,  348. 

I  have  not  before  me  sufficient  facts  to  express  any 
opinion  as  to  whether  the  trunk  was  accepted  as  bag- 
gage with  knowledge  of  its  contents  such  as  to  render 
the  carrier  liable  for  negligence.  In  the  absence  of  any 
other  circumstances,  there  was  negligence  on  the  part 
of  the  carrier  in  delaying  the  trunk,  sufficiently  to  ren- 
der the  carrier  liable  for  damages  if  the  trunk  was 
carried  with  knowledge  of  its  contents.  But  the  facts 
are  probably  insufficient  to  hold  the  carrier  liable  ex- 
cept for  gross  negligence,  if  it  had  no  knowledge  of  the 
contents  of  the  trunk. 

In  case  of  delay  in  transporting  baggage,  the  meas- 
ure of  damages  is  the  value  of  the  use  of  it  to  the 
owner  between  the  time  of  its  actual  delivery  and  the 
time  it  should  have  arrived. 

Sutherland  on  Damages  (3d  Ed.),  Sec.  955. 
R.  R.  Co.  v.  Douglass,  30  S.  W.,  487  (Tex.). 

Remote,  speculative  or  conjectural  damages,  how- 
ever, are  never  recoverable. 

3  Ency.  Law  (2d  Ed.),  585. 

Any  definite  damages,  therefore,  which  are  the  di- 
rect and  proximate  result  of  the  delay  are  recoverable, 
if  the  trunk  was  carried  as  baggage  with  knowledge  of 
its  contents. 

I  am  not  informed  as  to  the  basis  used  in  computing 
the  value  of  the  salesman's  time,  nor  as  to  whether  his 
expenses  resulted  as  a  direct  consequence  of  the  delay, 
or  were  such  as  would  have  been  incurred  in  any 
event,  and  consequently  can  express  no  opinion  as  to 
whether  the  particular  items  claimed  are  recoverable  if 
the  trunk  was  accepted  as  baggage  with  knowledge. 

I  return  herewith  the  enclosures. 


NOTE: — See  the  opinion  of  April  20,  1907,  for  the  Powers  Regula- 
tor Co.  as  to  whether  a  railroad  Company  is  liable  for  loss  of  time  by 
an  employe  of  the  consignor  or  consignee  when  a  shipment  has  been 
delayed. — Ed. 


507 


IN  REFERENCE  TO  QUESTIONS  ARISING  IN  CONNECTION  WITH 
THE  PROPOSED  UNIFORM  BILL  OF  LADING  AND  AS  TO  HOW 
LONG  CERTAIN  CONDITIONS  PROPOSED  IN  THE  UNIFORM 
BILL  OF  LADING  HAVE  APPEARED  IN  BILLS  OF  LADING  AND 
HAVE  BEEN  PUBLISHED  IN  THE  CLASSIFICATION,  AND  AS 
TO  THE  PROPOSED  TWENTY  PER  CENT.  INCREASE  IN  RATE 
FOR  CARRIERS'  COMMON-LAW  LIABILITY. 

(Standard  Wheel  Company,  January  6,  1905.) 

"Please  accept  our  thanks  for  your  valued  fa- 
vor of  the  23d  inst.  Our  inquiry  to  Studebaker 
Bros,  was  for  the  purpose  of  understanding  their 
own  personal  views  in  the  matter,  they  having  en- 
dorsed on  their  orders  strict  instructions  relative 
to  the  use  of  the  new  uniform  bills  of  lading.  We 
have  endeavored  for  some  time  to  get  definite 
views  and  instructions  from  various  sources,  and 
find  a  wide  range  of  opinion. 

As  shippers,  we  desire  first  and  last  to  see  that 
transportation  companies  do  not  encroach  upon 
the  rights  of  shippers,  and  so  far  as  we  can  now 
learn,  the  only  cause  of  contention  in  the  matter  is 
on  the  ground  that  the  railroad  interests  are  sup- 
posed to  be  quietly  preparing  to  draw  a  more 
strict  line  in  regard  to  the  liability  they  assume, 
but  we  have  been  unable  to  find  in  writing  anything 
which  changes  conditions  already  existing. 

Are  we  asking  too  much  if  you  will  answer  sep- 
arately the  following  questions: 

First:  Was  it  to  be  necessary  for  the  shipper 
to  actually  sign  the  new  shipping  orders  and  bills 
of  lading  in  addition  to  the  printing  or  stamping 
of  his  name,  which  must  necessarily  appear  some- 
where on  the  forms'? 

Second.  If  so,  can  you  refer  us  to  a  circular  in 
which  this  feature  is  covered,  or  send  us  a  copy  ? 

Third.  Is  it  not  a  self-evident  fact  that  the  con- 
ditions of  the  so-called  uniform  bill  of  lading  are 
binding  between  shipper  and  carrier,  whether 
signed  or  unsigned,  if  the  shipper  presents  a  ship- 


508 

ping  order  on  this  form  and  the  carrier  signs  the 
bill  of  lading,  which  the  shipper  accepts! 

Fourth.  Is  it  or  is  it  not  a  fact  that  the  same  con- 
ditions as  to  liability  have  always  been  a  part  of 
the  bills  of  lading  in  common  use  and  the  only 
difference  is  that  the  liability  clause  is  now  printed 
on  the  bills  of  lading  proper,  instead  of  in  the 
classification  only,  the  latter  having  been  and  now 
being  a  part  of  the  contract  between  carrier  and 
shipper  ? 

We  do  not  wish  it  understood  that  we  favor  the 
bill  at  all;  we  are  only  endeavoring  to  get  at  the 
real  points  at  issue.  We  hope  you  can  help  us 
out  along  that  line." 

I  suggest  that  the  communication  be  answered  as 
follows : 

In  response  to  questions  1  and  2,  the  Uniform  Bill 
of  Lading  Committee,  representing  the  various  car- 
riers in  Official  Classification  Territory,  in  a  circular 
issued  August  1,  1904,  makes  this  statement : 

"Carriers  prefer  that  shippers'  signatures 
(written,  stamped  or  printed)  shall  be  affixed  to 
the  Uniform  Bill  of  Lading — Original  and  to  Mem- 
orandum Acknowledgment,  but  they  do  not  insist 
upon  this  being  done.  If  shippers  prefer  to  omit 
their  signatures  to  these  forms,  no  objections  will 
be  made  by  carriers." 

In  response  to  question  3:  By  the  laws  of  several 
of  the  States,  including  Illinois,  the  shipper  must  ex- 
pressly assent  to  a  limitation  of  liability  in  a  bill  of 
lading.  In  other  States  it  has  been  held  that  an  un- 
signed general  notice,  limiting  the  carriers'  liability, 
printed  on  the  back  of  a  receipt,  does  not  bind  the 
shipper,  although  he  accepted  it  without  dissent.  But 
in  most  of  the  States  the  receipt  of  a  bill  of  lading 
without  objection,  containing  restrictions  of  liability, 
is  binding  on  the  shipper,  as  it  is  presumed  that  he  as- 
sented thereto. 

The  question  can  only  be  determined  by  reference 
to  the  law  of  the  State  where  the  contract  of  shipment 
is  made. 


509 

In  response  to  question  4:  The  conditions  of  the 
uniform  bill  of  lading  have  appeared  in  all  the  offi- 
cial classifications  since  1891,  and  the  20  per  cent, 
clause  for  common  law  liability  has  appeared  in  the 
classifications  since  1894.  There  is  a  wide  difference 
between  the  printing  of  the  liability  clause  in  the 
classifications  and  in  the  bill  of  lading,  shipping  re- 
ceipt and  shipping  order.  In  many  States  the  ship- 
per would  be  bound  by  accepting  the  bill  of  lading  with 
the  liability  clause  upon  it  where  he  would  not  if  it 
appeared  only  in  the  classification.  Furthermore,  these 
conditions,  even  if  they  appeared  in  the  bill  of  lading 
of  many  of  the  railroads,  have  not  been  enforced, 
either  in  the  collection  of  freight  charges  or  in  the  ad- 
justment of  loss  and  damage.  The  conditions  which 
have  not  been  in  practical  operation  for  ten  years  or 
more  the  railroads  now  propose  to  literally  enforce. 
The  uniform  bill  of  lading  has  been  a  dead  letter  in 
the  classifications  during  all  these,  years.  Although 
the  rates  specified  in  the  schedules  and  classifications 
are,  by  reference,  made  subject  to  the  conditions  of 
the  uniform  bill  of  lading,  the  carriers  have  accepted 
the  shipments  at  these  rates  under  the  common  law 
liability.  Again,  although  it  has  been  stated  in  the 
classifications  that  a  20  per  cent,  advance  would  be 
charged  for  unlimited  liability,  this  20  per  cent,  in- 
crease has  never,  to  my  knowledge,  been  collected  until 
recent  date. 

WHETHER  A  GABBIER  IS  BELIEVED  FBOM  LIABILITY  TJNDEB 
THE  LAW  OF  ILLINOIS  WHEN  THE  BILL  OF  LADING  OR 
SHIPPING  RECEIPT  IS  STAMPED:  "BECEIVED  AT  OWNEfi'S 
BISK  OF  DAMAGE  OB  BBEAKAGE. " 

(Weller  Mfg.  Co.,  January  18,  1905.) 
"We  would  like  to  have  legal  advice  regarding 
the  following  matter: 

On  August  22,  1904,  we  made  shipment  of  ma- 
chinery to  the  Konrad  Schreier  Co.,  of  Sheboygan, 
Wis.,  via  the  Goodrich  Transportation  Co.,  as  per 
enclosed  shipping  receipt.  One  iron  pulley,  part 


510 

of  the  shipment,  was  broken  in  transit.  Their 
attention  was  called  to  this  by  the  consignee.  We 
sent  the  transportation  company  a  bill  for  the 
value  of  the  pulley.  Under  date  of  December  2, 
1904,  we  received  the  following  letter  from  them: 
'  I  return  herewith  the  original  B/L  or  shipping 
receipt  issued  for  this  property  at  Chicago.  It 
bears  notation,  "Received  at  shipper's  or  owner's 
risk  of  damage  or  breakage."  Under  these  terms 
there  is  no  responsibility  with  us  and  the  claim  is 
respectfully  declined.  Yours  truly,  Charles  Gr. 
Hopper,  G.  F.  A.' 

We  would  like  to  hear  from  you  whether  we 
would  have  any  legal  claim  against  the  transporta- 
tion company." 

As  I  understand  the  facts,  the  shipping  receipt  in 
question  contained  no  conditions,  but  the  Goodrich 
Company  stamped  upon  it  the  notation : 

"Received  a,t  shipper's  or  owner's  risk  of  dam- 
age or  breakage." 

In  a  contract  of  affreightment,  the  general  rule  is 
that  the  law  of  the  place  where  the  contract  is  made 
governs  its  construction,  unless  the  parties  had  in  view 
the  law  of  some  State  other  than  that  where  the  con- 
tract was  made. 

State  v.  N.  J.  Steam  Nav.  Co.,  15  Conn.,  539. 
R.  R.  Co.  v.  Beebe,  174  111.,  13. 
Transp.  Co.  v.  Furttiman,  149  111.,  66. 
R.  R.  Co.  v.  Boyd,  9  111.,  268. 
R.  R.  Co.  v.  Smith,  74  111.,  198. 
Penn.  Co.  v.  Fairchild,  69  111.,  197. 
The  present  contract  is,  therefore,  governed  by  the 
laws  of  Illinois. 

The  Illinois  statute  (Sec.  33,  Chap.  114,  Rev.  Stat. 
of  111. )  provides : 

"That  whenever  any  property  is  received  by  a 
common  carrier,  to  be  transported  from  one  place 
to  another,  within  or  without  this  State,  it  shall 
not  be  lawful  for  such  carrier  to  limit  his  com- 
mon law  liability  safely  to  deliver  such  property 
at  the  place  to  which  the  same  is  to  be  transported 


511 

by  any  stipulation  or  limitation  expressed  in  the 
receipt  given  for  such  property. ' ' 
See  also  Sec.  1,  Chap.  27,  Vol.  1,  S.  &  C.  Eev.  Stat, 
p.  899. 

I  am  of  the  opinion  that  the  Illinois  Statute,  above 
quoted,  is  applicable  to  the  shipment  in  question,  even 
though  the  shipment  was  interstate.  It  is  well  settled 
that  a  statute  of  this  character  applies  to  interstate 
shipments,  as  well  as  to  local  shipments,  as  it  is  not 
considered  as  a  regulation  of  commerce  between  the 
States.  This  being  so  the  restriction  stamped  on  the 
shipping  receipt  is  not  binding,  as  it  is  a  violation  of 
the  statute  of  Illinois  above  referred  to. 

Ry.  Co.  v.  Solan,  169  U.  S.,  133. 

E.  E.  Co.  v.  Patterson,  169  U.  S.,  311. 

Solan  v.  Ey.  Co.,  63  N.  W.,  692  (Iowa). 

Ey.  Co.  v.  McCann,  174  U.  S.,  580. 

Burgess  v.  W.  U.  T.  Co.,  46  S.  W.,  794  (Tex.). 

Armstrong  v.  Ey.  Co.,  46  S.  W.,  33  (Tex.). 

Grain  Co.  v.  Railroad  Co.,  75  S.  W.,  638. 
I  am  not  informed  as  to  whether  any  bill  of  lading 
was  issued,  or  whether  the  receipt  in  question  is  the 
only  contract  between  the  parties.  Although  a  carrier 
can  not  limit  its  liability  in  its  receipt,  it  may  do  so 
by  special  contract.  A  bill  of  lading  may  be  both  a  re- 
ceipt and  a  special  contract.  But  in  Illinois  the  law 
is  well  settled  that  there  must  be  an  express  assent 
to  the  conditions  of  any  such  bill  of  lading  or  special 
contract.  Outside  of  the  statute,  therefore,  the  con- 
ditions stamped  on  the  shipping  receipt  in  question  are 
not  binding  unless  there  was  an  express  assent.  A 
mere  notice  printed  or  stamped  on  a  receipt  does  not 
bind  the  shipper,  although  he  accepted  it  without  dis- 
sent. But  the  receipt  of  a  bill  of  lading  containing 
restrictions  with  knowledge  on  the  part  of  the  shipper, 
is  binding  on  such  shipper  as  fully  as  if  he  had 
signed  it. 

Western  Transp.  Co.  v.  Newhall,  24  111.,  466. 

Transp.  Co.  v.  Theilbard,  86  111.,  71. 

I.  C.  R.  R.  Co.  v.  Frarikenburg,  54  111.,  88. 

Adams  Exp.  Co.  v.  Stettanus,  61  111.,  184.  186. 


512 

Ry.  Co.  v.  Montfort,  60  111.,  175,  178. 

Anchor  Line  Co.  v.  Dater,  68  111.,  359,  371. 

Field  v.  R.  R.  Co.,  71  111.,  458,  462. 

Boscowitz  v.  Express  Co.,  93  111.,  563. 

E.  &  W.  Transp.  Co.  v.  Dater,  91  111..  195. 

C.  &  A.  R.  R.  Co.  v.  Davis,  159  111.,  53. 

C.  &  N.  W.  Ry.  Co.  v.  Simon,  160  111.,  648. 

Ry.  Co.  v.  Calumet,  194  111.,  9. 

I  am  therefore  of  the  opinion  that  if  the  receipt 
was  the  only  contract  between  the  parties  the  restric- 
tion stamped  thereon  is  not  binding  on  the  shipper. 
If  there  was  a  special  contract  restricting  liability, 
to  be  binding  such  contract  must  come  within  the  rules 
above  set  forth. 


THE    LIABILITY   OF    AN    EMPLOYEE    ON    CONTRACTS    MADE   BY 
HIS  EMPLOYES  OE  AGENTS. 

(Selz,  Schwab  &  Co.,  January  19,  1905.) 

"In  accordance  with  the  conversation  which  Mr. 
Selz  had  with  you  recently,  we  present  herewith 
a  case  which  is  of  interest  to  every  manufacturer 
and  employer  in  the  State,  in  that  it  involves  a 
question  of  how  far  an  employer  is  liable  for  the 
alleged  acts  of  his  employes. 

The  facts  are  as  follows : 

In  the  early  part  of  May  we  asked  for  bids  for 
painting  and  lettering  our  wagons.  Under  date  of 
May  llth  we  received  a  proposition  from  Fred  L. 
Meckel,  of  77-83  East  Thirteenth  street,  Chicago, 
which  we  accepted  in  writing  under  date  of  May 
28th. 

One  of  the  wagons  was  delivered  to  Fred  L. 
Meckel 's  establishment  forthwith. 

It  was  reported  to  the  writer  by  the  barn  boss 
a  couple  of  weeks  later  that  Mr.  Meckel  had  not 
commenced  work  on  the  wagon.  The  barn  boss 
was  instructed  to  see  Mr.  Meckel  at  once  and  give 
instructions  that  the  work  be  rushed  through  im- 
mediately. On  going  to  Mr.  Meckel 's  establish- 


513 

ment  for  this  purpose,  the  barn  boss  instructed 
him  to  rush  the  work  as  quickly  as  possible,  and 
also  told  him  that  wherever  there  was  a  bolt  loose 
or  a  nut  gone  to  replace  same  before  the  painting 
was  done,  for  which  slight  repairs  we  would  have 
been  willing  to  pay  in  addition  to  the  price  speci- 
fied in  the  enclosed  order.  Mr.  Meckel,  it  seems, 
took  it  upon  himself  to  do  a  large  amount  of  ad- 
ditional work  on  the  wagon  and  rendered  us  a 
bill  for  same,  which  was  something  over  five  times 
the  amount  of  the  cost  of  painting  and  lettering 
for  which  we  had  given  written  instructions.  Mr. 
Meckel  claims  that  he  was  instructed  to  do  this 
work  by  the  barn  boss,  who  denies  that  he  issued 
such  instructions. 

The  question  is,  whether  after  an  employer  has 
given  a  written  order  for  certain  work  at  a  cer- 
tain price,  he  shall  be  liable  for  additional  work 
that  may  be  done  entirely  outside  of  the  original 
bid  and  acceptance,  though  such  work  has  been 
ordered  by  some  employe  1  It  would  seem  to  us 
that  if  such  is  the  case,  we  would  be  liable  for 
thousands  of  dollars  instead  of  hundreds,  as  in 
this  case. 

We  would  like  very  much  to  have  this  case  in- 
quired into  carefully  and  to  be  advised  of  the  re- 
sult." 

A  principal  is  ordinarily  bound  by  the  acts  of  the 
agent  within  the  agent's  actual  authority,  which  in- 
cludes not  only  the  precise  act  which  he  expressly  au- 
thorizes him  to  do,  but  whatever  usually  belongs  to 
the  doing  of  it,  or  is  necessary  to  its  performance. 

The  principal  is  also  bound  by  the  acts  of  the  agent 
within  the  apparent  authority  which  the  principal  him- 
self knowingly  permits  the  agent  to  assume  or  which 
he  holds  the  agent  out  to  the  public  as  possessing. 
Power  to  act  generally  in  a  particular  business  or  a 
particular  course  of  trade,  will  constitute  a  general 
agency.  The  authority  of  a  general  agent  is  not  un- 
limited but  must  necessarily  be  restricted  to  the  trans- 
action within  the  scope  of  the  business  of  the  princi- 


514 

pal.  In  the  case  of  a  special  agent,  the  authority  must 
be  strictly  pursued  and  the  principal  is  not  bound  if 
the  agent  exceeds  his  authority.  It  is  the  duty  of  all 
parties  dealing  with  a  special  agent  to  inquire  into 
the  nature  and  extent  of  his  authority.  But  the  prin- 
cipal is  bound  by  the  acts  of  a  general  agent  when 
acting  within  the  general  scope  of  his  authority,  as 
third  persons  are  not  bound  by  private  instructions 
from  a  principal  to  a  general  agent. 

Vol.  1,  Ency.  of  Law  (2d  Ed.),  pp.  988  et  seq. 

Mechem  on  Agency,  Sees.  278  et  seq. 

Doan  v.  Duncan,  17  111.,  272. 

Packet  Co.  v.  Parker,  59  111.,  23. 

Baxter  v.  Lamont,  60  111.,  237. 

In  the  present  case,  the  act  of  the  barn  boss  was 
entirely  independent  of  the  contract.  The  question, 
therefore,  resolves  itself  into  one  of  fact,  to  be  de- 
termined from  all  the  circumstances.  The  criterion  is 
the  character  of  the  authority  bestowed  by  the  prin- 
cipal on  the  agent.  If  the  agent  had  apparent  authority 
to  order  repairs  on  the  wagon,  the  principal  is  bound. 
The  authority  of  the  agent  may  be  shown  by  his  acts 
about  the  business  of  his  principal,  or  by  acquiescence 
in  them  when  made  known  to  the  principal.  The  pre- 
vious course  of  dealing  or  the  ratification  of  prior 
unauthorized  acts,  would  be  strong  evidence  of  the 
extent  of  the  authority.  On  the  other  hand,  the  fact 
that  the  principal  called  for  bids  and  accepted  them 
in  writing  is  evidence  of  the  lack  of  authority  in  the 
agent. 

Of  course,  if  the  repairs  were  not,  in  fact,  ordered 
by  the  agent,  the  principal  is  not  liable.  But  this  is 
a  question  of  fact  and  of  veracity  between  the  agent 
and  the  contractor. 

The  law  applicable  to  the  present  inquiry  is  simple. 
But  the  case  presents  a  question  of  fact  which  a  jury 
(if  there  be  a  law-suit)  must  pass  on.  It  is  impossible 
to  say  how  a  jury  would  view  the  controversy.  In 
the  first  place,  upon  the  issue  of  ordering  the  work 
done  there  is  a  clear  issue  of  veracity.  The  barn  boss 
denies,  while  the  wagon-maker  asserts  it.  The  wagon- 


maker's  position  is  supported  by  the  fact  that  the 
barn  boss  admits  ordering  a  few  repairs.  Besides 
this,  the  work  was,  in  fact,  done,  which  supports  the 
theory  of  the  wagonmaker.  Again,  not  to  hold  Selz, 
Schwab  &  Co.  for  the  work  in  controversy  would  be 
making  a  present  of  it  to  them  and  casting  the  whole 
loss  to  the  wagonmaker.  The  wagonmaker  will,  in 
such  a  controversy,  be  likely  to  have  the  sympathy  of 
a  jury.  If  there  were  no  controverted  issue  of  fact, 
so  that  the  case  could  be  taken  from  the  jury  when 
plaintiff's  evidence  is  in,  a  different  situation  would 
present  itself.  In  the  present  case  I  am  inclined  to 
the  view  that  if  the  case  were  to  go  to  the  jury  a  ver- 
dict adverse  to  the  defendant  would  probably  be  ren- 
dered. There  is  no  sure  way  of  preventing  a  contro- 
versy like  that  under  consideration.  If  the  agents  are 
absolutely  prohibited  from  giving  any  order  of  any 
kind  unless  they  are  in  writing — and  if  those  dealing 
with  agents  have  written  or  printed  notice  of  such  fact, 
there  will  be  less  opportunity  for  occurrences  of  this 
kind. 

WHETHER  A  CAREIER  IS  LIABLE  FOR  LOSS  OR  DAMAGE  TO 
BAGGAGE  WHERE  THE  TRUNKS  CONTAIN  SAMPLES  AND  NOT 
WEARING  APPAREL;  AND  WHETHER  CARRIER  CAN  CHARGE 

STORAGE. 

(Wheeler  &  Wilson  Mfg.  Co.,  January  19,  1905.) 

"We  wish  you  would  please  advise  us,  through 
the  Association's  attorney,  if  the  railroad  com- 
panies are  liable  for  a  trunk  or  its  contents,  when 
lost,  or  for  breakage,  if  the  contents  of  the  trunk 
taken  as  baggage,  and  for  which  a  check  is  given, 
are  samples.  The  railroad  company  claims  that 
it  has  a  right  to  exclude  from  baggage  cars  any- 
thing and  everything  other  than  baggage  which  is 
the  wearing  apparel  of  the  passenger. 

Also  kindly  advise  us  whether  or  not,  if  a  per- 
son arriving  in  a  city  at,  say,  9  a.  m.,  with  a  trunk, 
calls  the  next  day  at  5  to  re-check  it  on  the  same 
line,  the  owner  is  liable  for  25  cents  charges. 


The  checks  in  both  instances  are  the  regular 
checks,  with  no  advice  or  restrictions  on  either." 

In  my  opinion  rendered  to  the  Association  under 
date  of  October  1,  1902,  I  discussed  the  liability  of  a 
carrier  for  merchandise  samples  carried  as  baggage. 
The  subject  is  also  covered  in  my  opinion  of  January  5, 
1905,  in  response  to  an  inquiry  from  Selz,  Schwab  & 
Co.,  to  which  I  refer. 

Merchandise  samples  are  not  "baggage"  and  if  the 
carrier  receives  as  baggage  trunks  containing  samples 
without  knowledge  of  that  fact,  it  is  not  liable  for 
damage  to  the  samples,  unless  caused  by  its  gross  neg- 
ligence. If,  however,  a  carrier  knowing  trunks  to  con- 
tain samples,  accepts  them  as  baggage,  it  will  be  re- 
sponsible for  any  injury  thereto,  just  as  for  baggage. 

The  facts  are  not  before  me  and  I  can  not,  there- 
fore, express  an  opinion  as  to  whether  the  carrier 
checked  the  trunk  in  question  with  knowledge  either 
actual  or  constructive  that  it  contained  samples. 
Knowledge  on  the  part  of  an  agent  of  the  carrier  is 
notice  to  the  carrier.  The  inquiry  depends  peculiarly 
on  the  facts. 

A  carrier  is  allowed  to  exact  a  reasonable  charge  for 
the  storage  of  baggage  after  allowing  a  reasonable 
time  for  it  to  be  removed.  The  charge  is  of  the  same 
nature  as  that  for  the  storage  of  freight  in  a  ware- 
house after  receipt.  I  am  of  the  opinion  that  a  charge 
of  twenty-five  cents  storage  for  each  twenty-four  hours 
or  fraction  thereof,  after  the  first  twenty-four  hours 
from  the  receipt  of  the  baggage,  is  reasonable. 
3  Ency.  of  Law  (2d  Ed.),  p.  570. 

REASONABLENESS   OF   CERTAIN   RULES   IN   RELATION    TO   THE 
INSPECTION   OF  STEAM  BOILERS. 

(Fred  W.  Wolf  Co.,  Jan.  31,  1905.) 
"You  are  no  doubt  aware  that  the  City  of  Chi- 
cago is  enforcing  an  ordinance  passed  about  a  year 
ago  regarding  steam  boilers.  We  have  been 
obliged  to  change  blow-off  pipes  to  4"  and  are  re- 
quested by  notice  to  change  two  more.  We  under- 


517 

stand  that  the  Hartford  Insurance  Company  does 
not  favor  the  increase  in  the  size  of  the  pipe  and 
we  would  kindly  ask  you  whether  you  have  had 
this  matter  up  for  discussion  and  whether  you 
have  come  to  any  conclusion,  from  a  legal  stand- 
point as  well  as  otherwise  regarding  it  ? ' ' 
In  my  opinion  of  Aug.  1,  1904,  to  the  Association, 
and  in  my  opinion  of  August  1,  1904,  to  the  Aermotor 
Company,  I  discussed  the  subject  of  steam  boiler  in- 
spection.   The  regulation  in  question  was  made  by  the 
board  of  inspectors  of  steam  boilers  and  steam  plants 
in  October,  1903.     In  these  regulations  the  sizes  of 
blow-off  pipes  are  prescribed  for  different  diameters  of 
horizontal  tubular  boilers. 

The  city  has  power  to  regulate  this  subject-matter 
by  virtue  of  the  powers  granted  to  city  councils  by 
the  City  and  Village  Act  of  Illinois  (Kurd's  1903,  Eev. 
Stat.,  Ch.  24,  Par.  62,  Sec.  1,  Cl.  63  and  Cl.  64.) 

Clause  63  provides  that  the  city  council  shall  have 
power 

''to  prevent  the  dangerous  construction  and  con- 
dition of  chimneys,  fire-places,  hearths,  stoves, 
stove  pipes,  ovens,  boilers  and  apparatus  used  in 
and  about  any  building  and  manufactory,  and  to 
cause  to  be  removed  or  placed  in  a  safe  condition 
when  considered  dangerous;  to  regulate  and  pre- 
vent the  carrying  on  of  manufactories  dangerous 
in  causing  and  promoting  fires;  to  prevent  the 
deposit  of  ashes  in  unsafe  places,  and  to  cause 
all  such  buildings  and  enclosures  as  may  be  in  a 
dangerous  state  to  be  put  in  a  safe  condition." 
Clause  67  empowers  the  city  council 

"to  provide  for  the  inspection  of  steam  boilers." 
The  department  for  the  inspection  of  steam  boilers 
and  steam  plants  was  created  by  ordinance  of  March 
23,  1903,  in  effect  May  1,  1903.  (1902-03  Council  Pro- 
ceedings, p.  2819.)  This  ordinance  and  the  amend- 
ment thereto  contain  all  the  provisions  on  the  subject. 
The  board  has  reasonable  discretion  to  make  general 
rules  not  inconsistent  with  the  ordinance,  and  under 
it  to  make  special  rulings  in  particular  cases.  The 


518 

ruling  as  to  the  sizes  of  blow-off  pipes  is  a  question 
of  reasonableness.  If  a  pipe  of  4"  is  a  reasonable  size 
for  the  boiler  in  question,  the  ruling  and  order  of  the 
department  of  inspection  is  valid  and  can  be  enforced. 
Of  course,  such  a  question  of  reasonableness  is  one  of 
fact  which  must  be  determined  from  the  opinions  of 
experts  familiar  with  such  matters. 


PAYMENT    OF    REBATES    ON    REDEMPTION    OF    MILEAGE    BOOK 

COVERS. 

(Pitkin  &  Brooks,  February  1,  1905.) 

"We  are  to-day  in  receipt  of  the  enclosed  letter 
from  The  Western  Passenger  Association,  in  which 
they  refuse  to  honor  rebate  checks  on  mileage 
Credential  No.  A  16745,  issued  in  the  name  of  Mr. 
E.  S.  Gregory,  one  of  our  traveling  men,  which 
expired  May  25th  last,  stating  that  on  the  con- 
tract which  Mr.  Gregory  signed  the  limit  of  time 
for  applying  for  rebate  on  this  Credential  expired 
Nov.  25,  1904,  although  this  mileage  was  all  used 
within  the  specified  time,  and  as  a  matter  of  fact, 
we  presume  they  would  have  no  right  to  issue 
rebates  on  an  expired  book  if  they  did  not  expect 
to  honor  them.  Will  you  kindly  refer  this  to  your 
attorney  and  get  his  opinion  as  to  whether  we  have 
a  right  to  enforce  the  collection  of  this'  rebate  or 
not,  and  oblige. ' ' 

The  letter  from  the  chairman  of  the  Western  Mileage 
Bureau  states : 

"We  have  received  from  you  for  rebate  mile- 
age credential  No.  A  16745  issued  in  the  name  of 
E.  S.  Gregory,  which  expired  May  25,  1904.  When 
he  purchased  this  credential  he  signed  a  contract 
to  the  effect  that  if  the  credential  was  used  by 
him  for  not  less  than  2,000  miles  of  travel  within 
a  period  of  one  year  from  the  date  of  its  purchase, 
and  if  credit  checks  are  surrendered  to  this  bureau 
representing  not  less  than  that  number  of  miles, 
all  made  within  the  specified  time,  rebate  of  the 


519 

difference  between  two  cents  per  mile  for  the  total 
distance  traveled,  and  the  amount  paid  for  tickets 
would  be  allowed,  provided  application  for  rebate 
is  made  within  a  period  of  18  months  after  the 
date  on  which  the  credential  was  purchased.  The 
time  limit  for  applying  for  rebate  on  this  credential 
expired,  Nov.  25,  1904. 

"When  these  credentials  were  placed  on  sale  it 
was  found  necessary  to  incorporate  in  the  con- 
tract the  clause  requiring  that  application  for 
rebate  be  made  within  that  time  in  order  to  provide 
against  an  accumulation  of  mileage  credit  checks 
and  passage  tickets,  as  many  thousands  of  credit 
checks  and  tickets  are  issued  daily  in  connection 
with  credentials.  This  time  limit  for  applying  for 
rebate  was,  and  is,  considered  as  being  extremely 
liberal. 

"We  regret,  therefore,  that  in  accordance  with 
our  rules  and  the  terms  of  the  contract  entered 
into,  we  would  not  be  warranted  in  allowing  any 
rebate,  much  as  we  would  like  to." 
In   this   case   the   traveling   salesman   of   Pitkin   & 
Brooks  signed  a  contract  limiting  the  time  of  redemp- 
tion.   This  constitutes  a  special  contract,  made  in  con- 
sideration of  the  reduced  rate. 

Where  the  purchaser  signs  the  ticket  it  must  be 
presumed,  in  the  absence  of  fraud,  misrepresentations, 
or  mistake,  that  he  read  the  conditions  and  assented  to 
them,  and  he  will  be  bound  although  he  did  not  in  fact 
read  them. 

28  Encl.  of  Law,  176  (2nd  ed.). 

Where  the  passenger  has  entered  into  a  special  con- 
tract with  the  carrier,  evidenced  by  his  ticket,  he  is 
entitled  only  to  those  rights  which  the  ticket  confers, 
and  is  bound  to  perform  the  obligations  which  the  ticket 
imposes  upon  him. 

Hutchinson,  Carriers  (2d  ed.),  sec.  580 A. 
I  am  of  the  opinion  that  the  railroad  companies  can 
legally  provide  a  reasonable  time  within  which  a  rebate 
may  be  claimed,  and  therefore  the  mileage  bureau  can- 
not be  compelled  to  pay  the  rebates  in  question  if  it 


520 

does  not  choose  to  do  so.    I  am  of  the  opinion  that  six 
months  is  a  reasonable  time. 

I  assume,  however,  that  all  parties  are  treated  alike 
and  that  there  is  no  element  of  discrimination  present. 

AS  TO  THE  NECESSITY  OF  AN  EMPLOYER  PAYING  AN  ASSIGN- 
MENT OF  WAGES  UNDER  THE  LAW  OF  ILLINOIS,  WHEN  THE 
ASSIGNMENT  IS  MADE  BY  POWER  OF  ATTORNEY. 

(Gross  Printing  Press  Co.,  February  1,  1905.) 

"We  enclose  you  herewith  a  document  handed 
to  us  presumably  from  the  Boston  Outfitters  Com- 
pany. There  was  nothing  said;  the  document  was 
simply  handed  to  one  of  the  office  help.  The  ques- 
tion with  us  is,  should  this  be  construed  as  a  legal 
notice  that  from  the  time  of  its  delivery  to  us  the 
man's  pay  as  long  as  he  works  at  the  factory 
should  be  considered  as  held  up  for  the  benefit  of 
this  concern,  or  in  order  to  enforce  this  document 
would  it  be  necessary  for  these  people  to  com- 
mence legal  proceedings  by  garnishment  to  make 
us  liable  for  the  man's  pay?  If  this  document  is 
held  good  we  doubt  whether  the  man  will  have  a 
pair  of  socks  left  to  wear. 

We  would  like  the  opinion  of  Mr.  Levy  Mayer 
as  to  the  legality  of  this  document,  and  how  far  it 
affects  us  by  simply  having  it  left  at  our  place 
of  business  without  any  demands  whatever  being 
made. ' ' 
The  assignment  contract  is  as  follows : 

"FOR  A  VALUABLE  CONSIDERATION,  to 
me  in  hand  paid  by  BOSTON  OUTFITTERS 
COMPANY,  the  receipt  of  which  is  hereby  ac- 
knowledged, I  do  hereby  sell,  assign  and  set  over  to 
the  said  BOSTON  OUTFITTERS  COMPANY, 
its  successors  and  assigns,  all  wages  and  claim 
for  wages,  or  commission,  earned  and  to  be  earned, 
and  all  claims  or  demands  due  or  to  become  due 
me  from  Goss  Printing  Press  Company,  their 
heirs  or  assigns,  or  any  other  firm,  person,  com- 
pany or  corporation,  by  whom  I  may  hereafter 


521 

be  employed,  or  who  may  owe  me  money  for  any 
consideration  whatsoever,  up  to  and  including  the 
first  day  of  January,  1908 ;  and  I  hereby  authorize, 
and  direct  the  said  party  or  parties  named  above, 
or  any  of  them,  to  pav  the  said  demand  and  claim 
and  all  thereof  to  "the  said  BOSTON  OUT- 
FITTERS COMPANY,  its  successors,  assigns  or 
attorneys. 

1  do  hereby  constitute  and  appoint  the  said  C. 
Wetmore,  his  heirs,  executors,  administrators  or 
assigns,  my  attorney  in  my  name,  to  take  all  legal 
measures  which  may  be  proper  or  necessary  for 
the  complete  recovery  and  enjoyment  of  the  claim 
or  claims  hereby  assigned,  and  I  hereby  author- 
ize and  empower  him  to  receive  any  money  which 
may  become  due  hereon  and  receipt  for  same  in 
my  name,  hereby  ratifying  any  acts  my  said  attor- 
ney may  take  therein. 

WITNESS  my  hand  and  seal  this  25th  day  of 
October,  1904. 

(Signed)  ANDREW  GAYDOS.  (Seal)" 
The  assignment  contract  shows  on  its  face  what  it  is. 
It  has  come  into  the  hands  of  the  company  under  cir- 
cumstances susceptible  of  no  other  construction  than 
that  of  an  intent  to  give  notice.  The  company  has, 
therefore,  received  actual  notice  and  would  not  be 
heard  to  say  that  it  had  no  notice. 

An  employe  has  a  right  to  assign  his  unearned 
wages,  but  such  assignment  is  not  operative  unless 
made  under  a  subsisting  contract  of  employment.  If 
the  employe  was  in  the  employ  of  the  Goss  Printing 
Press  Company  at  the  time  the  assignment  was  made, 
it  is  valid  and  enforceable  as  to  all  wages  earned  by 
him  while  employed  by  the  printing  press  company 
up  to  and  including  January  1,  1908.  The  assignment 
is  not  operative  as  to  wages  to  be  earned  by  him  in 
any  new  employment  should  he  leave  the  service  of 
the  printing  press  company. 

An  almost  identical  contract  was  upheld  by  the  Illi- 
nois Supreme  Court  in  Mallin  v.  Wenham,  209  111., 
252.  The  court  held  that  an  assignment  of  wages  to 


522 

be  earned  in  the  future  under  an  existing  employment, 
even  though  the  employment  is  for  an  indefinite  time, 
is  not  against  public  policy  and  is  valid  if  made  for 
a  valuable  consideration  and  untainted  with  fraud. 

The  printing  press  company,  in  my  opinion,  should 
hold  these  funds  subject  to  the  assignment,  pending 
an  investigation  of  the  correctness  of  the  date,  genu- 
ineness of  the  signature,  etc.  It  does  not  appear  that 
the  debtor  disputed  the  consideration  for  the  assign- 
ment, or  claims  fraud,  or  has  given  the  printing  press 
company  notice  not  to  pay  the  wages  to  the  assignee. 
If  that  element  were  in  the  case,  the  parties  could  be 
required,  at  the  instance  of  the  printing  press  com- 
pany, to  interplead  so  that  the  company  may  know  to 
whom  to  pay  the  money. 

It  may  be  the  fact,  as  frequently  happens,  that  the 
name  of  the  firm  by  whom  the  wages  are  payable,  the 
date  of  the  assignment,  and  the  signature  of  the  em- 
ploye were  filled  out  on  a  blank  assignment  by  virtue 
of  another  and  separate  power  of  attorney  given  to 
the  creditor. 

The  modus  operandi  is  this :  The  debtor  on  the  mak- 
ing of  a  loan  gives  a  power  of  attorney ;  with  this 
power  of  attorney  the  creditor  makes  out  a  new  as- 
signment of  wages  with  each  change  of  employment. 
The  real  date  of  the  power  of  attorney,  therefore,  be- 
comes important.  It  must  have  been  given  during  a 
subsisting  employment  in  order  to  be  valid  as  to  the 
wages  to  be  earned  during  that  employment. 

In  City  of  Chicago  v.  People,  98  111.  App.,  517,  521, 
the  court  said : 

"The  power  of  attorney,  though  irrevocable  in 
terms,  does  not  amount  to  an  assignment  when 
no  assignable  interests  exist  at  the  time  the  power 
is  made." 

The  Appellate  Court  cites,  with  approval,  Lehigh 
Valley  R.  Co.  v.  Woodring,  116  Pa.  St.,  513,  where 
there  was  a  power  of  attorney  that  expressly  author- 
ized the  filling  up 

"of  the  power  of  attorney  with  the  name  of  any 
person,  firm  or  corporation  for  whom  I  may  be 


523 

working  at  any  time  during  the  time  I  am  receiv- 
ing groceries  and  provisions  as  aforesaid  from  the 
said  store." 

The  lower  court  held  that  it  was  against  public  policy 
that  the  laborer  should  beggar  himself  and  family  by 
making  merchandise  of  what  is  virtually  his  entire 
wage-earning  power.    In  affirming  the  decision  of  the 
lower  court,  the  Supreme  Court  of  Pennsylvania  said : 
"The  attempt  was  to  assign  that  which  had  no 
existence  either  substantial  or  incipient.     There 
was  no  foundation  or  contract  on  which  an  indebt- 
edness might  arise.     It  was  the  mere  possibility 
of  a  subsequent  acquisition  of  property.     This  is 
too  vague  and  uncertain.    It  can  not  be  sustained 
as  a  valid  assignment  and  transfer  of  property." 
The  Printing  Press  Company  should  satisfy  itself 
that  the  assignment  was  executed  while  the  debtor  was 
in  its  employ,  if  directly  executed  by  him  and  bearing 
his  signature.     If  not  directly  executed  by  him,  but 
under  a  separate  power  of  attorney,  it  should  satisfy 
itself  that  the  power  of  attorney  likewise  was  given 
during  a  time  when  he  was  actually  in  the  employ  of 
that  company.     The  whole  matter  can,  however,  be 
disposed  of  by  a  bill  of  interpleader  in  equity  which 
will  protect  the  Goss   Printing  Press  Company  and 
compel  the  different  claimants  to  establish  their  re- 
spective rights.    The  present  query  is  another  illustra- 
tion of  the  necessity  for  remedial  legislation. 

NOTE: — See   the   later   opinion  of   March   27,    1906,   to   Stromberg, 
Allen  &  Co.,  and  the  note  thereto. — Ed. 

AS    TO    THE    LEGALITY    OF    A    SPECIAL    CONTRACT    BETWEEN 
SHIPPER  AND  CARRIER,  RELEASING  CARRIER'S  LIABILITY. 

(Electric  Appliance  Company,  February  2,  1905.) 
The  Electric  Appliance  Company  encloses  form  of 
special  contract  with  the  Chicago,  Burlington  &  Quincy 
Eailway  Company,  also  communication  from  M.  A. 
Fountain  &  Co.,  enclosing  contract  with  the  Chicago, 
Eock  Island  &  Pacific  Eailway  Company.  The  latter 
contract  provides: 


524 

"THIS  AGREEMENT,  made  this  day,  between 
the  Chicago,  Rock  Island  &  Pacific  Railway  Com- 
pany, party  of  the  first  part,  for  itself  and  con- 
necting lines,  and  M.  A.  Fountain  &  Co.,  party  of 
the  second  part,  witnesseth:  For  and  in  consid- 
eration of  the  price,  viz. :  Release  tariff  rates  sub- 
ject to  the  different  classifications  now  in  use,  or 
which  may  come  in  use,  during  the  existence  of 
this  contract,  at  which  said  Company  agrees  to 
transport  all  shipments  requiring  release  and 
guarantee  by  its  lines  from  or  to  any  station  on 
the  lines  of  the  Chicago,  Rock  Island  &  Pacific 
Railway,  or  to  or  from  any  station  on  the  line  of 
any  railroad  company  with  which  the  road  of  the 
said  first  party  connects,  it  is  hereby  mutually 
agreed  that  the  said  companies  shall  not  be  liable 
for  any  damage  said  property  may  sustain  from 
breakage,  or  from  being  damaged  by  fire,  or  wTater, 
or  for  any  other  cause  whatever — except  such  as 
may  result  from  collision  of  trains,  or  cars  being 
thrown  from  the  tracks,  and  that  no  action  for 
any  damages  shall  be  prosecuted,  except  against 
the  company  upon  whose  road  the  same  shall  have 
occurred.  This  contract  is  to  extend  and  apply  to 
all  such  shipments  or  articles  coming  under  the 
head  which  are  specified  at  released  rates  in  the 
classifications  between  the  points  concerned, 
shipped  by  or  to  party  of  the  second  part  up  to 
December  31,  1905,  and  with  this  provision,  that 
either  party  may,  at  pleasure,  annul  this  contract, 
by  giving  ten  days'  written  notice  of  intention  to 
do  so." 

The  other  contract  is  substantially  the  same. 
Both  of  the  contracts  attempt  to  limit  the  common- 
law  liability  of  the  carrier,  and  their  conditions  are 
made  binding  by  procuring  the  shipper's  signature 
thereto.  The  carrier  can  only  limit  the  common-law 
liability  in  this  State  by  special  contract,  to  which  the 
shipper  assents.  The  carrier  is  now  attempting  to 
obviate  the  necessity  of  procuring  this  assent  every 
time  a  shipment  is  made,  by  substituting  the  .present 


525 

contract,  which  limits  the  carrier's  liability  on  all  ship- 
ments made  during  the  year. 

I  have  advised  the  members  from  time  to  time  that 
in  my  opinion  they  are  entitled  in  this  State  to  have 
their  goods  carried  at  the  present  schedule  rates,  with 
common  carrier's  common-law  liability.  I  know  of  no 
reason  for  signing  the  contracts  in  question  unless  the 
shippers  obtain  adequate  consideration  for  so  doing. 

The  carriers  in  the  Western  classification  territory 
are  evidently  trying  to  accomplish  what  the  Eastern 
roads  have  thus  far  unsuccessfully  attempted  to  ac- 
complish by  the  adoption  of  the  uniform  bill  of  lading. 


WHETHEK  MANUFACTURERS  ARE  COMPELLED  TO  ANSWER 
INQUIRIES  IN  RELATION  TO  THEIR  BUSINESS,  REQUESTED 
BY  THE  CENSUS  BUREAU  UNDER  THE  UNITED  STATES  LAW 
CREATING  A  CENSUS  OF  MANUFACTURES. 

(The  Illinois  Brick  Company  and  other  members  of 
the  Association,  February  4, 1905.) 

The  Illinois  Brick  Company  and  other  members  of 
the  Association  enclose  the  "Schedule  of  Questions  for 
the  Census  of  Manufacturers,  1905,"  circulated  by  the 
Permanent  Census  Bureau,  upon  which  schedule,  and 
the  questions  therein  contained,  my  opinion  is  asked. 

The  schedule  is  dated  January  3,  1905,  and  com- 
prises thirteen  general  subjects  of  inquiry,  including 
character  of  organization,  character  of  industry,  cap- 
ital invested,  proprietors  and  firm  members,  salaried 
employes,  wage-earners,  average  number  of  wage- 
earners,  employes  each  month,  miscellaneous  expense, 
materials  used,  products,  classified  earnings  of  wage- 
earners,  time  factory  in  operation,  power,  etc. 

Numerous  questions  covering  these  general  subjects 
of  inquiry  are  submitted.  There  is  also  a  supplemental 
schedule  relating  to  brick  yards,  with  general  subjects 
of  inquiry  relating  to  quantity  and  cost  of  materials 
used,  products,  machinery,  kilns,  etc.  These  questions, 
if  answered,  will  furnish  a  comprehensive  statement 
and  review  of  the  business  of  each  manufacturer. 


526 

A  census,  in  a  general  sense,  is  denned  as  an  official 
reckoning  or  enumeration  of  the  inhabitants  and  wealth 
of  a  country.  (Bouvier,  Law  Dictionary.) 

In  the  Century  Dictionary  and  Encyclopedia,  ''cen- 
sus" is  defined  as: 

"A  registering  and  rating  of  persons  and  prop- 
erty, wealth;  an  official  enumeration  of  the  inhab- 
itants of  a  state  or  country,  with  details  of  sex 
and  age,  family  occupations,  possessions,  etc." 
And  in  Anderson 's  Law  Dictionary  it  is  defined  as : 

"A  rating,  numbering,  valuing,  assessing." 
In  the  United  States  the  authority  for  making  the 
census  is  derived  from  the  Constitution  (Art.  I,  Sec. 
2,  par.  3) : 

"Representatives  and  direct  taxes  shall  be  ap- 
portioned among  the  several  states  which  may  be 
included  within  this  Union,  according  to  their  re- 
spective numbers,  which  shall  be  determined  by 
adding  to  the  whole  number  of  free  persons,  in- 
cluding those  bound  to  service  for  a  term  of  years 
and  excluding  all  Indians  not  taxed,  three-fifths 
of  all  other  persons.  The  actual  enumeration  shall 
be  made  within  three  years  after  the  first  meeting 
of  the  Congress  of  the  United  States  and  within 
every  subsequent  term,  of  ten  years,  in  such  man- 
ner as  they  shall  by  law  direct." 
Article  I,  section  9,  also  provides: 

"No  capitation  or  other  direct  tax  shall  be  laid 
unless  in  proportion  to  the  census  or  enumeration 
hereinbefore  directed  to  be  taken." 
From  time  to  time  statutes  have  been  passed  by  Con- 
gress providing  methods  for  taking  the  censuses  and 
detailing  the  subjects  of  inquiry.    The  census  has  here- 
tofore always  been  taken  every  ten  years,  in  accord- 
ance  with    the    Constitution.     A   permanent    census 
bureau  was  established  for  the  first  time  by  the  act  of 
March  6,  1902.     (Ch.  139,  32  St.,  51.) 

Chapter  419  of  the  act  of  March  3,  1899  (30  St., 
1014),  provides  for  "taking  the  twelfth  and  subsequent 
censuses."  Section  7  of  that  act  provides: 

' '  That  the  Twelfth  Census  shall  be  restricted  to 


527 

inquiries  relating  to  the  population,  to  mortality, 
to  the  products  of  agriculture  and  of  manufac- 
turing and  mechanical  establishments." 

It  also  provides  that : 

' '  The  schedules  of  inquiries  relating  to  the  prod- 
ucts of  manufacturing  and  mechanical  establish- 
ments shall  embrace  the  name  and  location  of  each 
establishment,  character  of  organization,  whether 
individual,  co-operative,  or  other  form;  date  of 
commencement  of  operation;  character  of  busi- 
ness or  kind  of  goods  manufactured;  amount  of 
capital  invested;  number  of  proprietors,  firm 
members,  co-partners  or  officers,  and  the  amount 
of  their  salaries;  number  of  employes,  and  the 
amount  of  their  wages;  quantity  and  cost  of  ma- 
terials used  in  manufactures ;  amount  of  miscel- 
laneous expense ;  quantity  and  value  of  products ; 
time  in  operation  during  the  census  year;  char- 
acter and  quantity  of  power  used,  and  character 
and  number  of  machines  employed.  The  form  and 
sub-division  of  inquiries  necessary  to  secure  the 
information  under  the  foregoing  topics  relating  to 
manufacturing  and  mechanical  industries  shall  be 
in  the  discretion  of  the  Director  of  the  Census. 
Whenever  he  shall  deem  it  expedient,  the  Director 
of  the  Census  may  withhold  the  schedules  for  said 
manufacturing  and  mechanical  statistics  from  the 
enumerators  of  the  several  sub-divisions  in  any  or 
all  cases,  and  may  charge  the  collection  of  these 
statistics  upon  special  agents,  to  be  employed 
without  respect  to  locality." 

Section  22  of  the  same  act  provides : 

"And  every  president,  treasurer,  secretary,  di- 
rector, agent,  or  other  officer  of  every  corporation, 
and  every  establishment  of  productive  industry, 
whether  conducted  as  a  corporate  body,  limited 
liability  company,  or  by  private  individuals,  from 
which  answers  to  any  of  the  schedules,  inquiries 
or  statistical  interrogatories  provided  for  by  this 
act  are  herein  required,  who  shall,  if  thereto  re- 
quested by  the  Director,  supervisor,  enumerator 


528 

or  special  agent,  wilfully  neglect  or  refuse  to  give 
true  and  complete  answers  to  any  inquiries  au- 
thorized by  this  act,  or  shall  wilfully  give  false 
information,  shall  be  guilty  of  a  misdemeanor,  and 
upon  conviction  thereof  shall  be  fined  not  exceed- 
ing $10,000,  to  which  may  be  added  imprisonment 
for  a  period  not  exceeding  one  year. ' ' 

The  Act  of  March  6,  1902,  Ch.  139  (32  St.,  51),  pro- 
vides : 

"That  the  Census  Office  temporarily  established 
in  the  Department  of  the  Interior,  in  accordance 
with  an  Act  entitled  'An  Act  to  provide  for  tak- 
ing the  Twelfth  and  subsequent  censuses,'  ap- 
proved March  13,  1899,  is  hereby  made  a  perma- 
nent office." 

Section  6  of  that  act  provides : 

"That  all  the  provisions  of  the  Act  of  March 
3,  1899,  relating  to  the  Twelfth  Census,  not  incon- 
sistent with  the  provisions  of  this  Act,  shall  re- 
main in  full  force  and  effect  for  the  taking  of  the 
Thirteenth  and  subsequent  censuses." 

Section  9  of  that  act  provides,  in  part : 

"That  in  the  year  190*5,  and  every  ten  years 
thereafter,  there  shall  be  a  collection  of  the  sta- 
tistics of  manufactures,  confined  to  manufacturing 
establishments  conducted  under  what  is  known 
as  the  factory  system,  exclusive  of  the  so-called 
neighborhood  and  mechanical  industries;  and  the 
Director  is  hereby  authorized  to  prepare  such 
schedules  as  in  his  judgment  may  be  necessary  to 
carry  out  the  provisions  of  this  section." 

Section  12  provides : 

' '  That  the  supplemental  acts  amendatory  of  the 
Act  of  March  3,  1899,  approved  February  1,  1900, 
May  10,  1900,  June  2,  1900,  February  23^1901,  are 
hereby  repealed;  and  all  provisions  of  the  Act  of 
March  3,  ,1899,  inconsistent  with  this  Act  are  here- 
by repealed." 

The  act  of  February  14,  1903,  Ch.  552  (32  St.,  825), 
provides : 


529 

"That  the  Census  Office,  and  all  that  pertains 
to  the  same,  be,  and  the  same  hereby  is,  trans- 
ferred from  the  Department  of  the  Interior  to  the 
Department  of  Commerce  and  Labor,  to  remain 
henceforth  under  the  jurisdiction  of  the  latter." 
It  will  be  noticed  that  the  acts  above  quoted  pro- 
vide for  a  census  of  manufactures  in  1905  and  every 
ten  years  thereafter.     This  is  not  in  accordance  with 
the  constitution,  as  the  twelfth  census  was  taken  in 
1900  and  the  next  census  thereafter  would  be  1910. 

In  Republic  of  Hawaii  v.  Paris,  10  Hawaiian  Rep., 
579,  it  was  held  that  where  a  statute  directed  the  tak- 
ing of  a  census  as  to  number,  sex,  population,  etc.,  no 
authority  was  given  to  make  a  census  of  the  wealth  of 
the  inhabitants.  If,  therefore,  the  taking  of  the  pres- 
ent census  is  not  in  accordance  with  the  constitution, 
it  can  not  be  justified  thereunder. 

The  authority  for  the  statute  of  1902  is  not  within 
the  purview  of  the  constitutional  provisions  relating 
directly  to  the  census.  I  am  of  the  opinion,  however, 
that  it  can  be  supported  under  the  implied  powers  of 
Congress,  as  designated  in  article  I,  section  8.  It  is 
there  provided  that  Congress  shall  have  power  "to 
make  all  laws  which  shall  be  necessary  and  proper" 
for  carrying  into  execution  the  powers  expressly 
granted  to  Congress.  Such  a  census  would  probably 
be  held  to  be  a  valid  exercise  of  the  powers  of  Congress 
in  aid  of  future  legislation.  The  information  derived 
from  a  census  of  manufactures  is  valuable  and,  in  some 
respects,  almost  necessary  to  Congress  in  enacting  laws 
regarding  the  levying  of  taxes,  duties,  imposts  and  ex- 
cises and  internal  revenue,  appropriations  for  develop- 
ment and  improvement  of  waterways,  fostering  the 
merchant  marine,  establishing  trade  relations,  provid- 
ing a  suitable  volume  of  money  and  for  many  other 
purposes. 

In  Cooley  on  Constitutional  Law,  p.  93,  it  is  said : 

"The  necessity  that  shall  justify  the  making  of 
particular  laws  is  not  an  absolute  necessity,  but 
Congress  can  make  any  law,  not  by  the  Constitu- 


tion  expressly  or  impliedly  prohibited,  which  it 
shall  deem  conducive  to  the  execution  of  any  ex- 
press power." 

Nevertheless  there  is  undoubtedly  a  limit  to  the  ex- 
tent that  Congress  may  compel  the  giving  of  informa- 
tion concerning  the  private  business  of  the  citizen  for 
census    purposes.      Although    census    interrogatories 
have  become  more  and  more  searching,  they  have  pro- 
voked so  little  opposition  that  we  have  in  the  courts 
no  judicial  interpretation  of  the  extent  of  the  powers 
of  Congress  in  this  respect.     So  far  as  I  have  been 
able  to  find,  only  four  cases  have  come  before  the  fed- 
eral courts  in  relation  to  the  census,  and  in  those  the 
question  of  the  constitutionality  of  the  census  act  and 
of  the  validity  of  the  inquiries  of  the  kind  here  under 
consideration  were  not  passed  upon. 
U.  S.  v.  Sarle,  45  Fed.,  191. 
U.  S.  v.  Mitchell,  58  Fed.,  993. 
U.  S.  v.  Moriarity,  106  Fed.,  886. 
Ching  v.  U.  S.,  118  Fed.,  538,  55  C.  C.  A.,  304. 
No  case  involving  the  census  has  reached  the  United 
States  Supreme  Court  for  final  adjudication.    Refer- 
ences to  the  census,  however,  in  the  nature  of  obiter 
dicta,  occur  in  some  of  the  decisions. 

In  the  dissenting  opinion  of  Mr.  Justice  Brewer  in 
Interstate  Commerce  Commissions. Brimson,  154  U.  S., 
447  (dissenting  opinion,  155  U.  S.,  5,  10),  it  is  said 
arguendo,  that  it  is  the  duty  of  every  citizen  to  re- 
spond to  the  inquiries  of  the  census  officers  and  fur- 
nish the  information  desired,  and  that 

"there  is  no  question  of  the  lawful  power  of  Con- 
gress to  elicit  this  information;  possibly  none  as 
to  its  power  to  provide  that  refusal  to  give  the 
information  shall  be  deemed  a  misdemeanor  and 
prohibited  and  prosecuted  and  punished  as  such." 
This,  however,  was  merely  obiter,  and  was  in  a  dis- 
senting opinion,  and  no  question  of  the  kind  was  be- 
fore the  court. 

Chief  Justice  Marshall,  in  Loughborough  v.  Blake, 
5  Wheat.,  317,  declared : 

"The  direct  and  declared  object  of  the  census  is 


531 

to  furnish  a  standard  by  which  representatives 
and  direct  taxes  may  be  apportioned  among  the 
several  states." 

The  United  States  Supreme  Court,  in  Kilbourn  v. 
Thompson,  103  U.  S.,  168,  has  held  that  no  general 
power  exists  in  either  branch  of  Congress,  or  in  any 
administrative  body  established  by  Congress,  to  make 
inquiry  into  the  private  affairs  of  the  citizen.  • 

And  in  Boyd  v.  U.  S.,  116  U.  S.,  616,  630,  it  is  said 
that  the  principles  that  embody  the  essence  of  consti- 
tutional liberty  and  security  forbid  all  invasions  on 
the  part  of  the  Government  and  its  employes  of  the 
sanctity  of  a  man's  home  and  the  privacies  of  his  life. 
Again,  Mr.  Justice  Field  (of  the  United  States  Su- 
preme Court),  while  on  circuit,  in  an  elaborate  opinion 
(In  re  Pacific  Railway  Com.,  32  Fed.,  241),  dis- 
cussed the  powers  of  an  administrative  body  created 
by  Congress  to  make  inquiry  into  the  private  affairs  of 
a  citizen.  Reference  is  there  made  to  the  census  act 
then  in  force,  and  Mr.  Justice  Field  said,  in  speaking  of 
the  census  interrogatories: 

"There  is  no  attempt  in  such  inquiries  to  pry 
into  the  private  affairs  and  papers  of  anyone,  nor 
are  the  courts  called  upon  to  enforce  answers  to 
them.  Similar  inquiries  (as  to  birth,  marriage,  oc- 
cupation and  matters  of  general  interest)  usually 
accompany  the  taking  of  a  census  of  every  country 
and  are  not  deemed  to  encroach  upon  the  rights 
of  the  citizen.  And  in  addition  to  the  inquiries 
usually  accompanying  the  taking  of  a  census,  there 
is  no  doubt  that  Congress  may  authorize  a  com- 
mission to  obtain  information  upon  any  subject 
which,  in  its  judgment,  it  may  be  important  to 
possess.  It  may  inquire  into  the  extent  of  the  pro- 
ductions of  the  country  of  every  kind,  natural  and 
artificial,  and  seek  information  as  to  the  habits, 
business  and  even  amusements  of  the  people.  But 
in  its  inquiries  it  is  controlled  by  the  same  guards 
against  the  invasion  of  private  rights  which  limit 
the  investigations  of  private  parties  into  similar 
matters.  In  the  pursuit  of  knowledge  it  can  not 


532 

compel  the  production  of  the  private  books  and 
papers  of  the  citizen  for  its  inspection,  except  in 
the  progress  of  judicial  proceedings,  or  in  suits 
instituted  for  that  purpose,  and  in  both  cases  only 
upon  averments  that  its  rights  are  in  some  way  de- 
pendent for  enforcement  upon  the  evidence  those 
books  and  papers  contain. 

Of  all  the  rights  of  the  citizen,  few  are  of  greater 
importance  or  more  essential  to  his  peace  and 
happiness  than  the  right  of  personal  security,  and 
that  invoices,  not  merely  protection  of  his  per- 
son from  assault,  but  exemption  of  his  private 
affairs,  books  and  papers  from  the  inspection  and 
security  of  others.  Without  the  enjoyment  of  this 
right,  all  other  rights  would  lose  half  their  value. 
The  law  provides  for  the  compulsory  production, 
in  the  progress  of  judicial  proceedings,  or  by  di- 
rect suit  for  that  purpose,  of  such  documents  as 
affect  the  interests  of  others,  and  also,  in  cer- 
tain cases,  for  the  seizure  of  criminating  papers 
necessary  for  the  prosecution  of  offenders  against 
public  justice,  and  only  in  one  of  these  ways  can 
they  be  obtained,  and  their  contents  made  known, 
against  the  will  of  the  owners. ' ' 

In  the  same  case  Judge  Sawyer,  in  his  concurring 
opinion,  said: 

"A  general  roving,  offensive,  inquisitorial  com- 
pulsory investigation,  conducted  by  a  commis- 
sion without  any  allegations,  upon  no  fixed  prin- 
ciples, and  governed  by  no  rules  or  laws,  or  of  evi- 
dence, and  no  restrictions  except  its  own  will,  or 
caprice,  is  unknown  to  our  constitution  and  laws; 
and  such  an  inquisition  would  be  destructive  of 
the  rights  of  the  citizen,  and  an  intolerable  tyr- 
anny. Let  the  power  once  be  established,  and 
there  is  no  knowing  where  the  practice  under  it 
would  end." 

It  will  be  noticed,  however,  that  the  census  act  there 
referred  to  restricted  the  inquiries  to  birth,  marriage, 
occupation  and  matters  of  general  interest. 

In  Wallace  v.  Ry.  Co.,  94  Ga.,  732,  22  S.  E.,  579 


533 

(1894),  the  right  of  a  citizen  to  protection  in  his  pri- 
vate business  is  upheld.    The  court  said: 

"  Liberty  of  speech  and  writing  is  secured  by 
the  Constitution  and  incident  thereto  is  the  cor- 
relative liberty  of  silence,  not  less  important  nor 
less  sacred.  Statements  or  communications,  oral 
or  written,  wanted  for  private  information,  can 
not  be  coerced  by  mere  legislative  mandate  at  the 
will  of  one  of  the  parties  and  against  the  will  of 
the  other.  Compulsory  private  discovery,  even 
from  corporations,  enforced  not  by  suit  or  action, 
but  by  statutory  terror,  is  not  allowable  where 
rights  are  under  the  guardianship  of  due  process 
of  law. ' ' 

In  U.  S.  v.  Moriarity,  106  Fed.,  886  (1901),  where  a 
census  enumerator  was  held  indictable  for  making 
fictitious  returns,  there  are  dicta  to  the  effect  that 
Congress  may  lawfully  obtain  information  from  manu- 
facturing interests  through  the  medium  of  the  census, 
but  in  that  case  there  was  no  discussion  as  to  the  scope 
of  such  inquiries  or  the  limitations  upon  the  same. 

The  fourth  amendment  to  the  Constitution  of  the 
United  States  provides: 

"The  right  of  the  people  to  be  secure  in  their 
persons,  houses,  papers,  and  effects,  against  un- 
reasonable searches  and  seizures,  shall  not  be  vio- 
lated, and  no  warrants  shall  issue  but  upon  prob- 
able cause,  supported  by  oath  or  affirmation,  and 
particularly  describing  the  place  to  be  searched, 
and  the  persons  or  things  to  be  seized. ' ' 
The  fifth  amendment  provides: 

"No  person  shall  be  held  to  answer  for  a  capi- 
tal, or  otherwise  infamous  crime,  unless  on  a  pre- 
sentment or  indictment  of  a  grand  jury,  except  in 
cases  arising  in  the  land  or  naval  forces,  or  in  the 
militia,  when  in  actual  service  in  time  of  war  or 
public  danger;  nor  shall  any  person  be  subject 
for  the  same  offense  to  be  twice  put  in  jeopardy 
of  life  or  limb ;  nor  shall  be  compelled  in  any  crim- 
inal case  to  be  a  witness  against  himself,  nor 
be  deprived  of  life,  liberty,  or  property,  without 

J 


534 

due  process  of  law;  nor  shall  private  property  be 

taken  for  public  use  without  just  compensation." 

If  any  of  the  proposed  inquiries  require  persons  to 

disclose  their  private  affairs  or  their  business  secrets, 

or  if  the  compiling  of  statistics,  in  a  particular  case 

entails  a  great  amount  of  labor  and  expense,  this  may 

constitute  an  unreasonable   search  and  seizure  or  a 

taking  of  private  property  without  due  process  of  law 

or  without  proper  compensation,  in  violation  of  the 

constitutional  provisions  above  quoted. 

In  U. ,8.  v.  Mitchell,  58  Fed.,  993  (1893),  it  was  held 
that  the  provision  of  the  census  act  imposing  a  penalty 
upon  officers  of  corporations  "from  whom  answers 
are  herein  required"  was  ineffective  because  there 
was  no  provision,  in  that  or  any  other  act,  requiring 
such  corporation  or  their  officers  to  answer  questions. 
The  court  took  occasion  to  discuss  certain  points 
which  had  been  urged,  but  were  not  necessary  for  the 
decision  of  the  case.  The  court  said  (p.  999) : 

"In  view  of  the  conclusion  under  the  first  ob- 
jection to  this  indictment,  I  might  possibly  pass 
this  graver  objection  without  further  considera- 
tion of  the  claims  of  counsel,  as  above  stated. 
But  as  further  legislation  will  be  necessary  to 
remedy  the  defects  found  in  existing  statutes, 
should  this  opinion  be  affirmed  by  the  Supreme 
Court,  it  may  not  be  amiss  to  suggest  that  there 
may  be  a  limit  to  the  power  of  Congress  to  compel 
a  citizen  to  disclose  information  concerning  his 
business  undertakings,  and  the  manner  in  which 
they  are  carried  on.  This  limit  must  relate,  not 
only  to  the  kind  of  information  he  may  properly 
refuse  to  disclose,  because  it  may  be  equivalent 
to  the  appropriation  of  private  property  for 'pub- 
lic use  without  just  compensation,  but  also  to  the 
extent  of  the  information  required,  as  well  as  to 
the  time  within  which  it  shall  be  given.  Certain 
kinds  of  information  valuable  to  the  public,  and 
useful  to  the  legislative  branches  of  the  govern- 
ment as  the  basis  for  proper  laws,  have  hereto- 
fore been  voluntarily  given,  and  may  properly 


535 

be  required  from  the  citizen,  when  it  is  not  of 
property  value,  or  when  the  collection,  compila- 
tion or  preparation  thereof  does  not  impose  great 
expense  and  labor  for  which  compensation  is  not 
provided.  It  is  not  infrequent,  however,  that  an- 
swers to  questions  propounded  in  some  schedules, 
if  fully  and  properly  prepared,  involve  the  collec- 
tion and  compilation  of  facts  that  require  the 
labor  of  a  large  force  of  clerks  for  days  and  weeks, 
entailing  great  expense  and  embarrassment  to 
the  ordinary  business  of  the  citizen.  Is  it  within 
the  power  of  Congress  to  make  such  answers  com- 
pulsory, and  require  the  citizen  to  neglect  his  usual 
business,  with  loss,  and  to  prepare  this  informa- 
tion at  a  great  personal  expense,  without  proper 
compensation?  Or,  if  a  citizen,  by  his  long  ex- 
perience in  a  special  line  of  business,  and  by  his 
superior  organizing  and  administrative  ability, 
has  so  systematized  it  that  he  can  carry  it  on  at  a 
much  less  expense  and  with  greater  facility  than 
others,  is  it  right  to  compel  him  to  disclose  the  in- 
formation so  acquired,  and  thereby  open  to  his 
rivals  in  trade  the  methods  by  which  he  has  been 
able  to  outstrip  them  in  the  sharp  competition  for 
business?  Is  not  the  system  so  established,  and 
the  knowledge  so  acquired,  as  much  a  property 
right  to  him  as  the  land  and  shop  in  which  he  con- 
ducts his  business?  And  can  he  be  compelled  to 
part  with  the  former  without  due  compensation 
more  justly  than  with  the  latter!  The  zeal  with 
which  such  information  is  sometimes  solicited  to 
maintain  favorite  theories  of  public  officials,  or  to 
afford  the  basis  for  discussing  economical  ques- 
tions, often  leads  to  excesses,  and  imposes  upon 
the  citizen  duties  for  which  no  just  compensation 
is  afforded,  either  in  money  or  in  his  proportion 
of  the  reward  of  the  good  results  to  follow  to  the 
public. 

As  before  stated,  when  such  information  is  re- 
quired as  the  basis  for  proper  legislation  or  the 
just  enforcement  of  the  public  laws,  the  power  to 


536 

compel  its  disclosure  may  exist,  and,  if  unusual  ex- 
pense attends  its  preparation,  proper  remunera- 
tion to  the  citizen  can  be  made ;  but  the  suggestion 
that  the  information  having  a  property  value  may 
be  demanded,  which  the  citizen  may  not  be  obliged 
to  impart  without  due  compensation,  so  earnestly 
pressed  by  the  learned  counsel  in  this  case,  still 
remains  undisposed  of,  and  a  proper  subject  for 
consideration  by  Congress  in  the  future  legisla- 
tion that  may  be  needed  to  enforce  such  demands 
by  the  census  bureau.  Of  course,  these  sugges- 
tions are  not  intended  to  apply  to  the  power  of 
Congress  to  compel  answers  to  questions  pro- 
pounded to  the  officers  of  railroad,  telegraph  and 
insurance  companies,  corporations  of  a  public 
character,  over  the  business  methods  of  which  the 
legislative  power  may  be  assured.  As  to  such 
corporations,  the  public  good  requires  that  whole- 
some and  strict  supervision  should  be  exercised, 
and  all  information  needed  as  to  the  basis  for  such 
legislation  and  control  should  be  produced  when 
required. ' ' 

I  am,  therefore,  inclined  to  the  opinion  that  in  so  far 
as  the  questions  propounded  by  the  Census  Bureau 
in  this  schedule  require  unnecessary  and  injudicious 
disclosure  of  private  business  affairs,  or  disclosures 
such  as  might,  if  revealed,  do  injury  to  the  business  of 
a  particular  person  or  give  advantage  to  competitors, 
such  person  is  probably  under  no  compulsion  to  an- 
swer. But  in  so  far  as  the  questions  to  be  answered 
relate  to  matters  that  are  not  private,  or  are  merely 
general  in  character,  I  advise  that  the  same  be  an- 
swered. It  is  impossible  in  a  general  opinion  to  deter- 
mine what  specific  questions  should  or  should  not  be 
answered.  The  manufacturer  must,  in  the  first  in- 
stance, determine  what  question  would  work  harm  to 
him  if  revealed.  It  is  a  question  principally  of  de- 
gree and  circumstance  as  to  whether  a  particular  in- 
quiry will  involve  an  unnecessary  disclosure  of  pri- 
vate business.  The  statistics,  when  compiled  for  the 
country  are,  of  course,  of  great  value,  and  as  the 


537 

Census  Bureau  promises  that  all  answers  will  be  held 
absolutely  confidential,  there  may  possibly  not  be  any 
disclosure  that  would  work  harm. 
Section  21  of  the  census  act  provides : 

"That  any  supervisor,  supervisor's  clerk,  enu- 
merator, interpreter,  special  agent  or  other  em- 
ploye, who,  having  taken  and  subscribed  the  oath 
of  office  required  by  this  Act,  shall,   *    *    *   with- 
out the  authority  of  the  Director  of  the  Census, 
communicate  to  any  person  not  authorized  to  re- 
ceive the  same  any  information  gained  by  him  in 
the  performance  of  his  duties,  shall  be  deemed 
guilty  of   a  misdemeanor,   and  upon   conviction 
shall  be  fined  not  exceeding  $500. ' ' 
There  is,  however,  no  limitation  on  the  authority 
of  the  Director  of  the  Census  to  divulge  information. 
It  is   doubtful  whether  the  penalty  clause  in  the 
census  act  of  1899  can  be  enforced.    The  act  imposes 
a  penalty  upon  "  every  president,  director,  agent  or 
other  officer  of  every  corporation  and  every  establish- 
ment of  productive  industry,  whether  conducted  as  a 
corporate  body,  limited  liability  company,  or  by  pri- 
vate individuals,  from  which  answers  to  any  of  the 
schedules,  inquiries  or  statistical  interrogatories  pro- 
vided for  by  this  act  are  herein  required,"  etc.     But 
nowhere  in  the  act  is  a  duty  imposed  upon  such  per- 
son   or   corporation    to    answer    the    interrogatories. 
Penal  statutes  are  to  be  strictly    construed,  and  the 
courts  will  not  extend  the  law  to  cover  a  failure  to  do 
an  act  which  is  required  to  be  done  only  by  implica- 
tion of  law. 

In  United  States  v.  Mitchell,  58  Fed.,  993,  it  is  said : 

"To  make  the  failure  or  refusal  to  perform  a 

duty  a  criminal  offense  cognizable  in  this  court, 

the  act  of  Congress  must  clearly  define  that  duty 

and  declare  the  punishment. ' ' 

There  can  be  no  constructive  offenses,  and  before  a 
man  can  be  punished  his  case  must  be  plainly  and  un- 
mistakably within  the  statute. 

U.  S.  v.  Wiltberger,  5  Wheat.,  76. 
U.  S.  v.  Morris,  14  Pet.,  464. 


538 

U.  S.  v.  Lacker,  134  U.  S.,  624,  628. 

U.  S.  v.  Brewer,  139  U.  S.,  278,  288. 
It  was  upon  this  precise  ground  (that  there  is  no 
duty  expressly  imposed  on  any  one  to  answer  the  in- 
quiries) that  the  court  in  U.  S.  v.  Mitchell,  58  Fed.,  993 
(1893),  supra,  squarely  held  that  an  officer  of  a  cor- 
poration could  not  be  prosecuted  for  failure  to  answer 
questions  under  the  census  act.  The  act  in  that  case  is 
almost  identical  in  terms  with  the  act  of  1899. 

See,  further,  as  holding  that  where  no  specific  duty 
is  imposed  by  the  statute,  there  can  be  no  criminal  or 
civil  liability: 

Maker  v.  Slater,  etc.,  Co.,  23  Atl.,  63  (R.  I.). 

Beklers  v.  Daniel,  31  Atl.,  582  (B.  I.). 

Hitchcock  v.  Chicago,  72  111.  App.,  196. 

Chicago  v.  Rumpff,  45  111.,  90. 

Commonwealth  v.  Watson,  97  Mass.,  562. 

Thomas  v.  People,  31  Pac.,  348. 

21  Ency.  of  Law  (2nd  Ed.),  99. 

Anderson  v.  State,  11  S.  W.,  33  (Tex.). 

Belk  v.  People,  125  111.,  584. 

U.  S.  v.  Knoivles,  Fed.  Gas.,  15,  540. 

Reg.  v.  Smith,  11  Cox  C.  C.,  210. 

Reg  v.  Pocock,  5  Cox  C.  C.,  172. 

Reg  v.  Barrett,  2  C.  &  K.,  343. 

Reg  v.Gray,  4  F.  &  F.,  1098. 

Wharton's  Crim.  Law,  Sees.  130,  337-8. 

Wharton  on  Homicide,  Sees.  72,  80,  98. 

Roscoe's  Crim.  Ev.  (8th  Ed.),  p.  923. 

Ex  Parte  Grand  Trunk  Ry.,  18  Lower  Can., 
Jurist,  141. 

People  v.  Davis,  1  111.  C.  C.,  217,  245. 

People  v.  Davis,  2  111.  C.  C. 

The  question  under  consideration  is  one  of  great 
importance,  and  I  submit  for  the  consideration  of  the 
board  whether  an  attempt  should  be  made  to  test  the 
matter  in  the  courts. 


NOTE: — The  above  opinion  attracted  considerable  attention  and  the 
following  bulletin  issued  by  the  Association  under  date  of  March  22, 
1905,  is  self-explanatory:  Ed. 


539 

CHICAGO,  March  22,  1905. 
To  Members: 

On  February  4th,  1905,  our  general  counsel,  Mr.  Mayer,  in  answer 
to  a  question  submitted  to  him  concerning  the  legality  of  the  ' '  Schedule 
of  Questions  for  Manufacturers,  1905,"  circulated  by  the  Permanent 
Census  Bureau,  rendered  an  opinion  that  certain  of  the  questions  pro- 
pounded by  the  Census  Bureau  called  for  such  disclosures  that  those 
who  were  unwilling  to  answer  them  could  not  be  legally  compelled  to  do 
so.  In  his  opinion  Mr.  Mayer  stated  that  all  questions  that  related  to 
matters  that  are  not  private,  or  to  matters  of  a  general  character,  must 
be  answered.  He  further  said  that: 

"It  is  a  question  principally  of  degree  and  circumstances  as  to 
whether  a  particular  inquiry  will  involve  an  unnecessary  disclosure 
of  private  business.     The  statistics,  when  compiled  for  the  country, 
are,  of  course,  of  great  value,  and  as  the  Census  Bureau  promises 
that    all    answers   will    be   held    absolutely    confidential,    there    may 
possibly  not  be  any  disclosure  that  would  work  harm. ' ' 
It  is  not  thought  that  any  of  the  members  of  the  Association  have 
misunderstood  Mr.  Mayer's  opinion,  which  was  and  still  is  adopted  aa 
the   opinion  to   govern  this   Association.      It   appears,   however,   from   a 
communication  received  by  the  President  of  the  Association,  from  Hon. 
S.   N.   D.   North,   Director   of   Census,   that   erroneous   views   have   been 
drawn  by  outsiders  as  to  the  scope  and  purport  of  Mr.  Mayer's  opinion. 
The  Association,  to  the  extent  that  it  can  facilitate  the  work  of  the 
Census  Bureau,  which  is  most  valuable  and  of  far-reaching  importance, 
is  anxious  to  do  so,  to  any  extent  that  does  not  infringe  upon  the  legal 
rights  of  its  members.     So  that  members  of  the  Association  may  know 
the  views  by  Mr.  North  on  the  subject,  a  copy  of  his  communication  is 
appended,  and  in  sending  the  same  it  is  a  source  of  gratification  to  the 
Association  that  its  position  upon  matters  affecting  manufacturers  is  con- 
sidered of  such  weight  and  importance  as  not  only  to  have  called  forth 
Mr.  North's  letter,  but  also  his  special  visit   from  Washington  to  this 
city. 

Yours  very  truly,  JOHN  M.  GLENN,  Secretary. 


Department  of  Commerce  and  Labor,  Bureau  of  the  Census,  Washington. 

Office  of  The  Director. 
MR.  JOHN  E.  WILDER, 

President  Illinois  Manufacturers'  Assn. 

My  Dear  Sir: — In  accordance  with  our  conference  this  afternoon, 
I  write  to  ask  that  you  will  bring  to  the  attention  of  the  Executive  Com- 
mittee of  your  Association  the  fact  that  the  success  of  the  United  States 
census  of  manufacturers  in  Illinois  is  likely  to  be  somewhat  impeded  by 
the  publication  of  the  opinion  of  Hon.  Levy  Mayer,  the  Counsel  of  your 
organization,  and  the  erroneous  conclusions  which  have  been  drawn  in 
some  of  the  newspapers.  I  am  confident  that  a  brief  resolution  of  your 
Committee,  urging  Illinois  manufacturers  to  respond  promptly  and 
cheerfully  to  the  census  inquiries,  will  wholly  overcome  this  adverse  im- 
pression, which,  as  I  stated  to  you,  is  founded  on  wholly  erroneous 
grounds.  In  accordance  with  your  request,  I  will  briefly  recapitulate 
what  I  said  in  our  conversation. 

1.  There  is  not  the  slightest  danger  that  the  data  asked  for  on  the 
Census  schedule  will  ever  become  public,  or  in  any  way  used  to  the 
detriment  of  any  manufacturer.  I  have  myself  been  officially  connected 


540 

with  every  federal  census  of  manufacturers  since  1880,  and  in  that  en- 
tire period  there  has  never  been  a  single  complaint  that  the  information 
containued  on  a  schedule  has  been  made  public,  or  become  known  to 
competitors,  or  used  in  any  way  to  the  detriment  of  the  manufacturer 
supplying  the  information.  I  am  fully  prepared,  as  Director  of  the 
Census,  to  make  good  the  guarantee,  which  appears  on  every  schedule, 
as  to  the  confidential  treatment  of  the  data.  As  the  schedule  is  con- 
structed, it  is  impossible  to  determine  from  it  the  profit  or  loss  of  the 
year  's  business.  But  even  if  this  were  not  so,  the  statistics  are  so  com- 
piled, for  publication,  that  the  operations  of  no  individual  establishment 
can  be  known. 

2.  The   Census   Office  wants  only   aggregates,  to   show   the   growth 
of  industries  and  localities.     The  manufacturing  census  has  been  made  a 
five-year  census,  instead  of  a  ten-year  census,  as  formerly,  on  the  demand 
of    the    manufacturers    themselves,    who    insisted,    when    the    permanent 
census    was    created,    that    our    manufacturing    development    was    ad- 
vancing so  fast  that  it  ought  to  be  measured  more  frequently  than  once 
in   ten   years.      The   agricultural    interests   of   the   country   are   now   de- 
manding a  five-year  census  also,  and  they  will  eventually  get  it.    If  it 
is  such  a  good  and  necessary  thing  I  cannot  understand  why  the  manu- 
facturers of  a  single  state  like  Illinois  should  object  to  it,  when  every- 
body else  favors  it.     The  great  manufacturing  associations  of  the  coun- 
try,  with  the   single  exception   of  the   Illinois   Association,   are   heartily 
co-operating  with  the  Census  Office  in  this  Census  and  giving  us  every 
assistance. 

3.  Illinois,  more  than  any  other  state,  is  vitally  interested  in  this 
particular   census.      For   two   decades   it   has   held  the   third   rank   as   a 
manufacturing  state,  being  surpassed  only  by  New  York  and  Pennsyl- 
vania.    Prior  to  3890  it  was  fourth  in  rank,  Massachusetts  being  third, 
and  Massachusetts  still  presses  it  very  closely.     If  the  movement  started 
by  your  Association -shall  gain  any  headway,  Illinois  will  fall  back  again 
to   the   fourth   rank,   and   Massachusetts   will   again   stand   third   in   the 
procession. 

4.  I  want  to  fully  explain  this  last  remark  to  avoid  any  possible 
misunderstanding.     We  have  in  the  Census  Office  a   complete  manu- 
facturing schedule  for  every  manufacturing  establishment  which  existed 
in  Illinois  in  1900,  when  the  last  census  was  taken.    It  is  the  same  sched- 
ule, by  the  w ay,  in  all  practical  essentials,  as  that  of  1905 ;  and  why  man- 
facturers  should  have  filled  it  out  them,  with  no  subsequent  detriment 
to  themselves,  and  yet  should  be  afraid  of  it  now,  is  a  mystery  I  cannot 
solve.)     If  any  Illinois  establishments  now  decline  to  make  a  report,  the 
only  course  open  to  the  Census  Office  will  be  to  reproduce  their  reports 
for  1900 — to  bring  them  forward  on  the  assumption  that  they  are  doing 
a  business  to-day  equal  to  the  business  of  five  years  ago.     We  shall  thus 
have   a   return   from   every   manufacturing   establishment   which   existed 
in  1900;   but  in  the  case  of  every  refusal  we  shall  lack  any  record  of 
the  increase  of  business  in  the  interval.     We  shall  not  lack  that  record 
in  any  other  State  in  the  Union,  for  nowhere,  save  in  Illinois,  has  there 
appeared   objection  to   the  work  the   Census   Office  is   doing.     The  only 
visible   effect   of  such   refusals,  therefore,   will  be  to  make   an   official 
record   to   the   effect   that   Illinois   is   retrograding   as   a   manufacturing 
state;  that  she  is  not  keeping  pace  with  her  neighbors;  and,  as  I  have 
before  intimated,  that  she  has  fallen  from  the  third  rank  to  the  fourth 
among  the   manufacturing  States   of   the   Union.     It   will  not   require 
many  refusals  from  large  establishments  to  effect  precisely  this  result 
in    the    official    figures.      The    growth    in    our    manufacturing    industry, 


541 

since  the  last  census  was  taken,  has  been  enormous;  few  of  us  compre- 
hend or  understand  it.  The  Census  Office  has  recently  completed,  in 
co-operation  with  the  State  of  Michigan,  a  census  of  the  manufactures 
of  that  state,  which  is  to  be  a  part  of  the  Manufacturing  Census  of 
1905.  It  shows  an  increase  in  the  value  of  the  products  of  manu- 
facturing industry  in  Michigan  since  1900  of  something  more  than  40 
per  cent.  There  is  reason  to  believe  that  a  result  equally  extraordi- 
nary and  gratifying  will  be  shown  throughout  the  states  of  the  Middle 
West.  Everywhere  the  public  interest  is  aroused  in  the  hope  that  the 
Michigan  record  can  be  matched — everywhere  but  in  Illinois.  I  be- 
lieve it  will  be  fully  matched  here  if  your  powerful  organization  puts 
itself  behind  the  Census  Office  in  the  effort  of  the  latter  to  get  at  the 
full  facts.  On  the  other  hand,  I  can  readily  see  that  if  you  take  no 
steps  to  counteract  the  impression  produced  by  the  wide  dissemination 
of  Mr.  Mayer 's  opinion,  the  returns,  when  finally  compiled,  will  create 
the  permanent  impression  that  Illinois  is  falling  behind  in  the  great 
race  of  industrial  progress. 

5.  I   am   not   unmindful   of   the   main  contention  of   Mr.    Mayer 's 
brief  that  there  is  room  to  doubt  the  constitutional  right  of  the  federal- 
government  to  demand  from  individual  manufacturers  such  definite  data 
concerning  their  private  business  affairs  as  the  Census  schedule  calls  for. 
I   note  carefully  his   suggestion   that   this   question   has   never   been  ju- 
dicially determined,  and  that  some  Illinois  manufacturers  might  prop- 
erly raise  it  in  this  connection.     To  this  proposition  I  make  the  follow- 
ing answer:      The  law  requires  that  the  manufacturing  census  shall  be 
taken  in  1905,  and  we  propose  to  carry  out  the  law.     We  cannot  post- 
pone the  census,  pending  the  judicial  determination  of  the  question  of 
the   constitutional   right   of   the   federal   government   to   ask  these   ques- 
tions, or  any  of  them,  and  we  don't  propose  to  do  so.     The  matter  is 
one  that  can  only  reach  the  courts  on  the  initiative  of  the  Director  of 
the  Census,  in  penal  proceedings  against  a  manufacturer  for  refusal  to 
comply  with  the  law,  and  render  full  and  true  answers  to  questions  the 
law  requires  him  to  answer.     It  is  therefore  not  in  the  power  of  any 
individual  manufacturer  to  estop  the  entire  census,  pending  a  judicial 
determination  of  this  question.     If  any  individual  manufacturer  refuses 
to   make  the   return   required   by   the  law,   we   shall   use   his   return   as 
made  to  the  census  of   1900,   and  prosecute  him  afterwards.     There   is 
lots  of  time  in  the  future  to  determine  this  more  or  less  academic  ques- 
tion.    At  present  the  only  thing  in  view  is  to  make  the  quickest  and 
best   census   yet   made   of  American   manufactures;    and  the   only   ques- 
tion  for   Chicago   and   Illinois   manufacturers   to    determine   is   whether 
they  will  aid  or  embarrass  the  work. 

6.  Mr.   Mayer   intimates   that   the   census   schedule  is   so   technical 
and  minute  as  to  constitute  an  unreasonable,  if  not  an  impertiment,  de- 
mand upon   the   time   and   patience  of   the   manufacturer.     As   to   that, 
admitting  that  the  schedule  is  formidable  in  appearance,  I  wish  to  say 
that  it  is  not  as  troublesome  as  it  looks.     The  manager  of  any  establish- 
ment   which    keeps    its    books    in    accordance    with    modern    business 
methods,  can  turn  the  schedule  over  to  his  bookkeeper,  who  can  fill  it 
out  in  a  comparatively  short  time.     The  census  accepts  the  statement 
as  made  at  the  last  inventory,  or  balancing  of  annual  books.     If  the 
exact  figures   do   not   exist   as  the   books  of   a   firm   or  corporation  are 
kept,  the  census  accepts  a  careful  estimate.     It  sends  an  agent  to  assist 
in  filling  out  the  schedule,  whenever  this  is  desired.     It  does  everything 
in  its  power  to  help  the  manufacturer  and  to  minimize  the  trouble  and 
annoyance  arising  from  its  requests. 


542 

In  accordance  with  this  policy,  the  Census  mailed  blank  schedules 
to  every  manufacturer  months  in  advance  of  the  canvass,  to  be  filled  out 
at  leisure  and  returned  by  mail.  I  am  gratified  to  be  able  to  state  that 
hundreds  of  the  largest  manufacturing  establishments  of  Chicago  and 
Illinois,  representing  many  millions  of  invested  capital,  have  taken  ad- 
vantage of  this  opportunity,  and  have  sent  forward  to  Washington 
schedules  filled  out  in  every  particular.  They  have  not  stopped  to  raise 
any  question  of  constitutional  right,  or  complained  about  intrusion  into 
their  private  affairs.  They  are  anxious  to  help  and  not  to  hinder  a 
great  government  work,  undertaken  primarily  in  the  interests  of  the 
manufacturer.  They  regard  it  as  a  patriotic  duty  to  contribute  their 
aid  in  this  work;  and  so,  I  am  sure,  will  the  members  of  your  Executive 
Committee  and  your  great  Association,  when  you  come  to  consider  all 
the  facts. 

Again  thanking  you  for  the  personal  courtesy  and  consideration  you 
have  extended  to  me,  I  remain, 

Very  respectfully,       S.  N.  D.  NORTH,  Director  of  Census. 
CHICAGO,  ILL.,  February  28,  1905. 

RIGHT  OF  A  MANUFACTURER  TO  USE  FAC-SIMILE  OF  EXPO- 
SITION AWARDS  FOR  ADVERTISING  PURPOSES  WITHOUT 
COMPLYING  WITH  THE  REGULATIONS  OF  THE  EXPOSITION 
COMMITTEE  ON  AWARDS. 

(Eclipse  Gas  Stove  Co.,  February  6,  1905.) 
"  Please  advise  us  if  the  question  has  been 
brought  before  the  legal  department  of  the  Asso- 
ciation, of  the  right  to  re-produce  for  advertising 
purposes,  cuts  or  illustrations  of  the  authorized 
emblems  of  the  awards  issued  by  the  Louisiana 
Purchase  Exposition.  We  have  been  awarded  the 
gold  medal  and  as  this  will  not  be  issued  for  sev- 
eral months  they  are  issuing  what  they  call  an 
official  award  ribbon.  Of  these  we  ordered  75  at 
$3  each  and  as  there  has  been  some  delay  in  their 
delivering  these  to  us,  and  we  wishing  a  half-tone 
reproduction  to  print  in  our  catalog,  wrote  them 
asking  if  they  could  hurry  forward  the  ribbons 
and  also  if  they  would  have  half-tone  cut  made  so 
that  we  could  use  it  in  our  catalog.  We  have  a 
reply  to-day  from  the  St.  Louis  official  award  rib- 
bon committee,  copy  of  which  we  enclose  with  this 
letter.  What  we  would  like  to  know  is,  have  we 
the  right  to  reproduce  this  in  our  catalog  without 
complying  with  the  regulations  set  forth  in  their 
letter." 


543 

The  letter  of  the  St.  Louis  official  award  ribbon  com- 
mittee is  as  follows : 

''In  reply  to  your  esteemed  favor  of  Dec.  8th, 
we  beg  to  say  that  we  have  placed  your  desires 
before  the  officials  to  re-produce  the  half-tones  of 
your  official  award  ribbons  and  declarations. 

We  presume  you  are  aware  that  these  author- 
ized emblems  are  protected  by  letters  patent  and 
copyright ;  therefore,  successful  exhibitors  are  not 
allowed  to  reproduce  them  in  any  manner  whatso- 
ever until  they  have  received  our  written  permis- 
sion to  do  so.  Although  it  has  now  been  arranged 
to  allow  to  those  who  purchase  100  or  more  rib- 
bons the  right  to  produce  them  for  advertising 
purposes. 

We  find  on  referring  to  our  previous  instruc- 
tions that  you  have  already  ordered  seventy-five, 
therefore,  it  will  only  be  necessary  to  send  us  a 
further  order  for  twenty-five  ribbons  for  you  to 
secure  the  right  to  reproduce  half-tones  for  illus- 
trating your  catalog. 

We  can,  if  you  so  desire,  produce  for  you  a  copy- 
righted half-tone  4^x7",  for  $25.  This  we  could 
send  to  you  within  a  week,  providing  your  catalog 
has  already  been  printed,  you  could,  if  you  so  de- 
sired, make  the  illustration  of  the  official  award 
ribbon  and  declaration  a  special  insert  page,  which 
would  probably  be  more  effective  than  if  you  had 
it  arranged  in  your  catalog." 

The  Louisiana  Purchase  Exposition  Company  is  a 
corporation  organized  under  the  laws  of  the  State  of 
Missouri.  Government  participation  in  the  exposition 
is  provided  for  by  Act  of  Congress  passed  March  3, 
1903  (Chap.  864,  Session  II,  56th  Congress).  Section  6 
of  that  act  provides : 

"That  the  allotment  of  space  for  exhibitors, 
classification  of  exhibits,  plan  and  scope  of  the 
exposition,  the  appointment  of  all  judges  and 
examiners  for  the  exposition,  and  the  awarding  of 
premiums,  if  any,  shall  all  be  done  and  performed 
by  the  said  Louisiana  Purchase  Exposition  Com- 


544 

pany  subject,  however,   to   the  approval  of  the 
Commission  created  by  section  two  of  this  act." 

Section  12  of  the  same  act  provides : 

"That  the  National  Commission  hereby  author- 
ized shall  cease  to  exist  on  the  first  day  of 
January,  1905." 

By  Act  of  Congress  passed  June  28,  1902  (Ch.  1301, 
p.  446,  Sess.  I,  57  Congress),  Sec.  12  was  amended  to 
make  the  National  Commission  cease  to  exist  on  the 
first  day  of  July,  1905. 

I  have  not  before  me  the  rules  of  the  Exposition 
Company  covering  the  issuance  of  awards.  From  the 
statutes  above  cited,  it  appears  that  the  National  Com- 
mission is  still  in  existence,  and  has  jurisdiction  to 
pass  on  the  reasonableness  of  rules  governing  awards. 
Unless  the  National  Commission  has  already  exhausted 
its  power  by  a  ratification  of  the  rules,  protest  may  be 
made  to  that  body. 

The  ribbons  are  covered  by  a  design  patent;  the 
printed  certificate  to  which  they  are  attached  is  cov- 
ered by  a  copyright.  Neither  the  design  patent,  nor 
the  copyright,  was  issued  to  the  Exposition  Company. 
I  am  not  informed  whether  or  not  there  has  been  an 
assignment  to  the  Exposition  Company  of  the  patents 
and  copyrights  in  question. 

It  is  impossible  to  pass  categorically  on  the  question 
of  law  submitted.  There  is  involved  the  power  of  the 
Exposition  Company  to  impose  extortionate  and  un- 
reasonable conditions  on  the  use  of  its  awards  as  well 
as  the  questions  of  restrictive  control  over  the  same 
under  color  of  patent  and  copyright  privileges.  Only 
the  owners,  assignees  or  licensees  can  reproduce  the 
emblems  in  kind,  that  is  identical  replicas  or  copies, 
nor  may  photographs  be  made  where  there  is  any  ele- 
ment or  unfair  trade  or  competition. 

Where  no  original  has  been  awarded  to  the  exhibitor, 
the  Imitation  of  the  official  emblems  would  be  a  fraud 
upon  the  public  and  injunction  might  properly  be 
invoked. 

Here  the  stove  company  has  been  awarded  a  prize 
and  it  is  not  seeking  to  reproduce  its  award  in  kind, 


545 

but  merelv  to  make  photographs  for  its  catalogues  as 
evidence  that  it  has  received  an  award.  It  wishes  to 
get  the  greatest  benefit  out  of  the  commercial  excel- 
lence of  its  product  on  account  of  which  the  awards 
were  made. 

It  seeks  no  advantage  over  the  Exposition  Company 
with  the  respect  to  the  exclusive  right  to  make  the 
emblems,  and  the  emblems  as  such  are  not  in  any  way 
in  the  line  of  the  stove  company's  business.  The  stove 
company  has  made  an  exhibit;  the  excellence  of  its 
goods  has  been  publicly  recognized,  and  it  seeks  to  use 
commercially  the  public  recognition.  The  use  sought 
to  be  made  of  the  photographs  is  not  unfair  or  piratical 
in  the  usual  sense. 

In  my  opinion  the  stove  company  is  free  to  photo- 
graph the  ribbon,  but  whether  or  not  it  may  photo- 
graph the  certificate  to  which  the  ribbon  is  attached, 
is  a  question  not  free  from  doubt. 

The  courts  may  hold  that  the  conditions  imposed 
with  the  awards  are  reasonable  and  that  the  design 
patent  and  copyright  permit  the  Exposition  Company 
to  retain  some  control  over  the  use  of  the  awards  after 
their  issuance,  although,  as  I  have  already  intimated,  I 
think  this  is  a  perversion  of  the  patent  and  copyright 
privilege. 

The  precise  question  has  never  been  passed  on  by 
the  courts.  The  stove  company,  therefore,  should  ap- 
peal to  the  National  Commission,  and  in  the  meantime 
it  would  probably  be  safe  in  issuing  the  half-tones  in 
its  catalogue. 

The  amount  in  controversy  is  small,  and  it  is  im- 
probable that  the  Exposition  Company  would  begin 
suit.  If  the  amount  in  controversy  were  sufficiently 
large  and  enough  members  of  the  association  were 
interested  to  make  it  an  association  matter,  I  would 
suggest  that  the  rule  of  the  Exposition  Award  Com- 
mittee should  be  boldly  repudiated  and  a  legal  attack 
be  courted,  so  that  what  seems  to  me  to  be  a  petty 
and  unreasonable  regulation  could  be  tested  in  the 
courts. 


546 


WHETHER  IT   IS  LEGAL  ON   THE  PART  OF   AN   EMPLOYER  OR 
NUMBER  OF  EMPLOYERS  TO  AGREE  NOT  TO  EMPLOY  UNION 

MEN. 

(Illinois    Manufacturers'    Association,    February    18, 

1905.) 

"  A  number  of  firms,  engaged  in  the  same  line  of 

trade,  associated  themselves  for  the  purpose  of 

opposing  unionism.    They  practically  succeeded  in 

eliminating  the  unions  from  their  plants.  Will  you 

kindly  answer  the  following  questions  for  them: 

Is  it  unlawful  on  the  part  of  an  employer  to 

refuse  to  employ  a  man  because  he  is  a  union  man ! 

Is  it  unlawful  for  a  number  of  employers  or 

firms  to  agree  among  themselves  that  they  will  not 

employ  any  union  man  ? ' ' 

The  matter  is  covered  by  my  opinion  of  May  13, 1903, 
in  answer  to  the  query  of  W.  D.  Allen. 

There  is  no  obligation  on  the  part  of  an  employer  to 
hire  any  particular  person,  and  an  employer  may, 
therefore,  refuse  to  hire  such  person  for  any  reason 
whatever,  no  matter  how  unreasonable,  whimsical  or 
capricious  that  reason  may  be.  For  the  same  reason 
an  employer  may  arbitrarily  refuse  to  hire  any  par- 
ticular class  of  persons,  without  reference  to  their 
qualifications  or  capacities.  I,  therefore,  answer  the 
first  question  in  the  negative. 

A  different  question  is  presented  when  a  number  of 
employers  agree  among  themselves  that  they  will  not 
employ  a  particular  class  of  persons,  viz.,  union  men, 
unless  such  action  is  necessary  to  the  maintenance  or 
preservation  of  the  employers'  legal  rights.  The  right 
to  hire  such  persons  as  they  may  see  fit  is  a  legal  right 
of  the  employer,  but  it  is  an  individual  right  and  not  a 
collective  right.  The  combination  possesses  hurtful 
powers  which  the  individual  has  not,  and  the  effect 
of  such  a  combination  is  to  proscribe  and  discriminate 
against  union  labor. 

Although  there  are  intimations  to  the  contrary  in 
some  of  the  decided  cases  elsewhere,  I  am  of  the  opin- 
ion that  in  this  State  such  an  agreement  will  be  held 


547 

illegal  and  in  violation  of  the  criminal  laws  of  the  State. 
See  the  authorities  cited  in  my  prior  opinion  of  May  13, 
1903.  Since  the  giving  of  that  opinion,  the  Appellate 
Court  of  this  district,  in  Christenson  v.  The  People, 
ex  rel.  (Judge  Adams  speaking  for  the  court),  held 
that  a  closed  shop  agreement  constitutes  a  conspiracy 
and  discriminates  against  non-union  labor.  This  is  the 
converse  of  the  question  submitted. 

NOTE: — The  decision  in  Christenson  v.  People  was  affirmed  by  the 
Supreme  Court  of  Illinois  in  O'Brien  v.  People,  216  111.,  354.— Ed. 

AS  TO  THE  FOREIGN  CORPORATION  OF  INDIAN  TERRITORY  AND 
AS  TO  COMPLIANCE  THEREWITH. 

(Rubber  Paint  Company,  March  17,  1905.) 
1  i  We  will  appreciate  it  if  you  will  mail  us,  say, 
six  or  eight  different  opinions  furnished  by  Attor- 
ney Levy  Mayer  to  members  of  our  association  in 
the  past  explaining  what  constitutes  doing  busi- 
ness in  other  States  and  Territories,  and  what  con- 
stitutes interstate  commerce.  We  had  occasion  to 
bring  suit  recently  in  the  Indian  Territory  for 
a  bill  of  merchandise  shipped  from  Chicago  and 
made  payable  here.  The  merchandise  was  origi- 
nally sold  by  one  of  our  traveling  men  in  the 
Indian  Territory,  but  the  order  was  subject  to  our 
approval  here  in  Chicago.  The  attorney  in  the 
Indian  Territory  representing  us  held  that  the 
transaction  was  strictly  interstate  commerce,  but 
the  federal  commissioner,  before  whom  suit  was 
brought,  is  of  the  opinion  that  no  foreign  corpora- 
tion can  maintain  a  suit  in  the  Indian  Territory 
without  complying  with  the  foreign  corporation 
legislation  now  in  force  there.  He  takes  the  stand 
that  the  Indian  Territory  is  governed  directly  by 
Congress  and  that  decisions  covering  points  of  this 
kind  arising  between  the  different  States  will  not 
apply. 

Hoping  that  you  may  be  able  to  furnish  us  with 
an  opinion  or  some  authorities  covering  this  par- 
ticular case,  we  are." 


548 

The  exact  question  has  not  been  passed  upon  by  the 
courts.  The  commerce  clause  of  the  constitution  is  not 
applicable  to  the  territories,  as  they  are  entirely  sub- 
ject to  the  legislative  power  of  Congress.  They  are 
not  organized  under  the  constitution,  but  are  the  crea- 
tion exclusively  of  the  legislative  department  and  sub- 
ject to  its  supervision  and  control. 

Endelman  v.   United  States    (C.   C.  A.,   9th 

Cir.),  86  Fed.,  456. 
Prentice  &  Egan  on  the  Commerce  Clause,  p. 

305. 

The  question  must  be  determined  irrespective  of  the 
commerce  clause  and  the  decisions  thereunder,  and  by 
reference  to  the  laws  of  the  Indian  Territory  alone. 

By  Act  of  Congress  of  May  2,  1890  (26  Stat.  L.  81), 
what  had  theretofore  been  known  as  the  Indian  Terri- 
tory, with  the  exception  of  certain  portions,  was 
erected  into  the  Territory  of  Oklahoma.  The  portions 
excepted  were  given  the  specific  designation  of  "The 
Indian  Territory"  which  is  the  territory  "actually  oc- 
cupied by  the  five  civilized  tribes,  and  the  Indian  tribes 
within  the  Quapaw  Indian  Agency  and  the  unoccupied 
part  of  Cherokee  outlet." 

Section  29  of  that  Act  provides: 

"That  all  that  part  of  the  United  States  which 
is  bounded  on  the  north  by  the  State  of  Kansas, 
on  the  east  by  the  State  of  Arkansas,  and  Mis- 
souri, on  the  south  by  the  State  of  Texas,  and  on 
the  west  and  north  by  the  Territory  of  Oklahoma, 
as  defined  in  the  first  section  of  this  act  (in  sub- 
stance, supra)  shall  for  the  purposes  of  this  act 
be  known  as  the  Indian  Territory." 
In  an  opinion  of  the  Secretary  of  the  Treasury  (22 
Op.  Atty.  Gen.,  235)  the  Attorney  General  said: 

"What  is  known  and  described  in  the  statutes 
and  generally  as  the  'Indian  Territory'  was  organ- 
ized and  described  by  metes  and  bounds  by  the  act 
of  May  2,  1890  (26  Stat.,  81,  93,  Sec.  29),  and  the 
territory  within  those  bounds  is  just  as  much  a 
separate,  distinct,  integral  part  of  the  United 
States  as  is  the  State  of  Kansas  or  Territory  of 


549 

Arizona,  and,  while  within  the  general  description 
of  Indian  country  as  defined  by  Section  1  of  the 
act  of  1834,  is  yet  governed  for  the  most  part  by 
laws  applicable  to  that  Territory  alone.  Nor  does 
its  existence  or  status  of  the  'Indian  Territory' 
depend  upon  the  continuance  of  the  Indian  title  to 
the  land  or  upon  the  fact  that  any  Indians  remain 
there.  On  the  contrary,  although  the  Indian  title 
had  become  extinct  as  to  every  foot  of  land  in  the 
Territory,  and  although  there  is  no  longer  an  In- 
dian there,  still  the  laws  applicable  to  that  Terri- 
tory would  continue  in  force  as  before  until  re- 
pealed or  changed,  except,  of  course,  those  relating 
to  the  Indians.  While  the  general  Indian  country 
ceases  to  be  such  upon  the  extinction  of  the  Indian 
title,  this  Territory,  as  organized  and  defined  by 
metes  and  bounds  and  named  the  'Indian  Terri- 
tory,' does  not  at  all  cease  to  be  such  upon  any 
contingency,  and  laws  applicable  to  that  Terri- 
tory continue  to  govern  it,  no  matter  who  owns  the 
soil,  excepting,  as  before,  laws  relating  peculiarly 
to  Indians." 

By  Sec.  1  of  the  Act  of  February  18,  1901,  Ch.  379 
(31  Stat.  L.  794)  Congress  provided  that  sections  504, 
509  and  960,  1035,  of  the  laws  of  Arkansas,  1884,  shall 
be  put  in  force  in  the  Indian  Territory,  so  far  as  they 
may  be  applicable.  The  Arkansas  sections  referred 
to  supply  a  body  of  statutes  applicable  to  domestic 
corporations.  Sec.  2  of  the  above  Act  of  February 
18,  1901,  provides  inter  alia  that  wherever  the  words 
"Secretary  of  State"  occur  in  the  Arkansas  section, 
there  shall  be  substituted  therefor  the  words  "Clerk 
of  the  United  States  Court  of  Appeals  for  the  Indian 
Territory." 

Section  3  provides  that  foreign  corporations  may  be 
authorized  "to  do  business"  in  the  Indian  Territory, 
but    subject   to    the    same    regulations    and   with    no 
greater  powers  than  domestic  corporations. 
Section  4  provides  that : 

"Before  any  foreign  corporation  shall  begin  to 


550 

carry  on  business  in  the  Indian  Territory,  it  shall 
designate  an  agent,  file  a  certificate,  etc." 
Section  5  provides  that  on  failure  of  a  foreign  cor- 
poration to  comply  with  the  requirements  of  the  fore- 
going sections, 

"All  its  contracts  with  citizens  and  residents  of 
the  Indian  Territory  shall  be  void  as  to  the  cor- 
poration, and  no  United  States  Court  in  the  Indian 
Territory  shall  enforce  the  same  in  favor  of  the 
corporation." 

As  I  have  stated,  the  commerce  clause  of  the  con- 
stitution and  the  decisions  thereunder  have  no  appli- 
cation. The  questions  now  presented  are,  however, 
closely  allied  to  those  arising  under  the  commerce 
clause.  The  laws  of  the  Indian  Territory  governing 
foreign  corporations  are  applicable  only  to  corpora- 
tions doing  business  therein.  The  words  ' '  doing  busi- 
ness" should  have  no  other  or  different  meaning  in 
this  connection  than  when  used  in  connection  with  in- 
terstate commerce  transactions.  The  decisions  under 
the  commerce  clause  are,  therefore,  applicable  here. 
Every  transaction  of  a  corporation  in  a  particular 
place  does  not  constitute  doing  business.  In  general, 
the  corporation  must  transact  what  is  in  fact  some- 
thing substantial  within  the  particular  place.  Isolated 
or  incidental  transactions  will  not  bring  the  corpora- 
tion within  the  rule,  nor  would  the  maintenance  of  a 
suit,  the  purchase  of  supplies,  or  the  doing  of  any  other 
act  merely  collateral  or  incidental  to  the  carrying  of 
the  business  of  the  corporation.  I  have  heretofore 
given  the  association  many  opinions  upon  different 
phases  of  the  question. 

I  am  not  informed  as  to  the  methods  pursued  by 
the  corporation  with  reference  to  its  business  in  the 
Indian  Territory.  If  the  corporation  merely  received 
an  order  for  goods  from  the  Territory  by  mail  or 
through  the  medium  of  a  traveling  salesman,  who  takes 
orders,  subject  to  the  approval  of  the  home  office,  and 
the  goods  are  shipped  from  this  State,  I  am  of  the 
opinion  that  the  corporation  need  .not  comply  with  the 
laws  of  the  Territory. 


551 


WHETHER  IT  IS  COMPULSORY  FOR  CARRIERS  TO  FURNISH 
CARS  AND  ALLOWABLE  TO  EXACT  PER  DIEM  CHARGES  FOR 
SUCH  CARS. 

(Barrett  Manufacturing  Company,  March  17,  1905.) 
"Will  you  please  submit  to  our  counsel,  Mr. 
Levy  Mayer,  for  his  opinion,  the  question  as  to 
whether  or  not  it  is  compulsory  for  the  carriers 
to  furnish  cars  to  transport  shipments  between 
points  within  their  terminals,  whether  handling 
over  one  or  more  lines;  if  handling  over  more 
than  one  line,  which  line  should  be  asked  to  fur- 
nish the  equipment,  the  line  on  which  the  shipment 
originates  or  the  line  delivering  the  shipment ;  and 
if  it  is  legal  for  them  to  assess  in  addition  to  the 
charge  for  the  services  performed  a  rental  charge 
for  the  equipment  ?  The  case  we  have  before  us  is 
that  our  factory  at  Kansas  City,  which  is  located 
on  the  Missouri  Pacific  tracks.  In  switching  ship- 
ments to  points  located  on  the  C.  &  A.  the  equip- 
ment is  furnished  by  the  Missouri  Pacific  and  the 
charge  of  $3.00  assessed  by  the  company  for  the 
service,  $3.00  for  rental  of  the  car  and  $3.00  for 
the  service  performed  by  the  C.  &  A." 
In  Eevised  Statutes  of  Missouri,  1899,  Sec.  1082,  it 
is  provided : 

"Every  such  railroad  corporation  is  hereby  re- 
quired to  receive  all  freight  or  live  stock  which 
may  be  offered  for  transportation  at  the  place  of 
starting,  at  the  junction  of  other  roads,  and  at 
usual  stopping  places,  and  shall  take,  transport 
and  deliver  the  same,  without  unnecessary  delay, 
according  to  contract." 

Section  1090  provides  for  a  penalty  of  not  less  than 
$100  nor  more  than  $500  against  any  railroad  com- 
pany failing  to  obey  the  provisions  of  the  act,  and  Sec. 
1120  gives  the  shipper  the  right  to  furnish  cars  himself 
if  the  railroad  fails  to  furnish  them  and  requires  the 
railroad  to  transport  these  cars. 

Under  these  provisions  it  is  compulsory  for  the  car- 


552 

rier  to  whom  freight  is  offered  for  transportation  to 
furnish  cars  to  transport  the  same.  At  common  law 
a  carrier  is  not  required  to  transport  goods  beyond  its 
own  line,  nor  is  a  connecting  carrier  compelled  to  give 
the  use  of  its  tracks  to  cars  of  other  lines.  In  my  opin- 
ion of  this  date,  in  response  to  an  inquiry  from  the 
Manierre-Yoe  Syrup  Company,  I  discussed  the  rela- 
tions and  liabilities  of  the  connecting  carriers  with 
reference  to  interstate  commerce.  However,  this  ship- 
ment I  assume  is  entirely  local  and  is,  therefore,  gov- 
erned by  the  laws  of  Missouri. 

The  Statutes  of  Missouri    (1899,  Rev.   Stat.,   Sec. 
1122)  provide: 

''Any  railroad  corporation,  or  association,  or- 
ganized for  the  purpose,  shall  have  the  right  to 
construct  and  operate  a  railroad  between  any 
points  within  this  State,  and  to  connect  at  the 
State  line  with  railroads  of  other  States;  and  shall 
have  the  right,  with  its  roads,  to  intersect,  con- 
nect with  or  cross  any  other  railroad,  and  shall 
receive  and  transport  each  other's  passengers, 
tonnage  and  cars,  loaded  or  empty,  without  delay 
or  discrimination." 

The  original  or  initial  carrier,  under  this  act,  would, 
in  my  opinion,  be  liable  to  furnish  the  cars  for  ship- 
ment even  if  it  be  necessary  to  handle  the  same  over 
other  lines.  If,  however,  the  delivering  carrier  has 
trackage  agreements  and  rights  permitting  it  so  to  do, 
it  may  properly  be  asked  to  supply  the  equipment  and 
undertake  the  transportation.  But  in  any  event,  the 
originating  carrier  is  primarily  liable  to  supply  cars. 
In  my  opinion  of  January  5,  1905,  in  response  to  an 
inquiry  from  W.  0.  King  &  Co.,  I  discussed  fully  the 
legality  of  per  diem  charges  for  the  rental  of  cars  in 
switching  traffic,  where  such  charges  are  in  addition 
to  the  charges  for  freight  and  switching.  I  have  not 
before  me  sufficient  facts  to  express  an  opinion  as  to 
the  reasonableness  of  a  $3  rental  charge  in  Kansas 
City.  The  laws  of  Missouri  require  tariffs  to  be  pub- 
lished by  the  railroads  and  provide  complaints  to  be 


553 

made  to  the  Kailroad  Commission,  if  such  rates  are 
unreasonable,  unjust  or  extortionate. 

NOTE: — See  opinion  of  April  20,  1907  (Hines  Lumber  Co.)  as  to 
the  right  of  a  carrier  to  assess  per  diem  charges  against  a  shipper  in 
addition  to  a  switching  charge. — Ed. 


WHETHER    A    RAILROAD    COMPANY    IS    OBLIGED    TO    FURNISH 
FIFTY-FOOT   CARS   IF  DEMANDED   BY  THE   SHIPPER. 

(E.  M.  Miller  &  Co.,  March  17,  1905.) 
"We  have  been  having  some  little  difficulty  in 
securing  fifty-foot  furniture  cars  for  loading  to 
Southern  California  points.  The  Southern  Pacific 
and  the  Santa  Fe,  being  the  only  roads  into  that 
territory,  have  made  what  is  termed  a  gentle- 
man's agreement,  so  that  neither  road  will  take  a 
shipment  in  a  fifty-foot  car,  unless  the  other  one 
is  agreeable  to  the  first  one's  accepting  the  busi- 
ness. 

Either  one  of  the  roads  is  in  position  to  handle 
fifty-foot  equipment  to  the  coast,  and  it  looks  to 
us  as  though  this  arrangement  of  theirs  was  a 
breach  in  Interstate  Commerce  laws.    We  should 
be  glad  to  have  your  opinion  on  this  subject." 
It  is  the  duty  of  the  carrier  to  equip  its  road  with 
the  means  of  transportation,  and  to  furnish  adequate 
and   suitable   car  equipment   for  all  the  business  it 
undertakes,  impartially  to  all  shippers  of  like  traffic. 

Truck  Farmers'  Assn.  v.  R.  R.,  6  I.  C.  Rep., 

295. 

Refiners'  Assn.  v.  R.  R.,  5  I.  C.  C.  Rep.,  415. 
Hutchinson,  Carriers  (2d  ed.),  Sec.  291a,  293. 
6  Cyc.  Law,  372. 

The   Interstate    Commerce   Act   provides    (Sec.   3, 
cl.  1) : 

"It  shall  be  unlawful  for  any  common  carrier 
subject  to  the  provisions  of  this  act,  to  make  or 
give  any  undue  or  unreasonable  preference  or  ad- 
vantage to  any  particular  person,  company,  firm, 


554 

corporation,  or  locality,  or  any  particular  descrip- 
tion of  traffic,  in  any  respect  whatsoever,  or  to 
subject  any  particular  person,  company,  firm,  cor- 
poration, or  locality,  or  any  particular  description 
of  traffic,  to  any  undue  or  unreasonable  prejudice 
or  disadvantage  in  any  respect  whatsoever." 
Under  the  provisions  of  this  section,  the  carrier  can 
not  lawful ly,  without  adequate  reasons,  refuse  to  fur- 
nish fifty-foot  furniture  cars  to  one  shipper  and  sup- 
ply them  to  another,  if  such  act  subjects  one  shipper 
to  undute  or  unreasonable  prejudice  or  disadvantage. 
A  common  carrier  can  not  unjustly  discriminate.     It 
must   treat   alike   all  its   patrons   who   are   similarly 
situated.    It  is  the  duty  of  the  carrier  to  furnish  cars 
suitable  for  the  purpose  required.     Upon  the  West- 
ern Classification,  Rule  6  B,  applicable  to  furniture 
in   carload  lots,  the  maximum   size  of  car  provided 
for  is   one   of   fifty-feet   six   inches   long.     If  furni- 
ture cars  of  less  than  fifty-feet  length  are  suitable 
for  the  purpose,   then  the  largest   size  is  merely  a 
facility    and    advantage    in    loading.      The    railroad 
company  is  under  no  obligation  to   furnish  a  fifty- 
foot  car,  if  a  suitable  car  is  tendered,  provided  that 
no    undue    or    unreasonable    advantage    is    given    to 
one    shipper    over    another.      The    duty    to    furnish 
the  cars  without  discrimination  may  be  enforced  by 
mandamus. 

Covington  Stock  Yards  Co.  v.  Keith,  139  U. 

S.,  128. 

If  there  is  discrimination  along  the  line  covered  by 
the  question  under  consideration,  the  matter  is  a 
proper  subject  for  investigation  by  the  Interstate  Com- 
merce Commission,  upon  appropriate  complaint  being 
made  to  it  by  Miller  &  Co. 

NOTE: — See  later  supplementary  opinion  of  June  29,  1905,  for  E. 
M.  Miller  &  Co.  upon  this  same  question,  and  also  the  opinion  of  Nov. 
7,  1906  (John  E.  Burns  Lumber  Co.)  as  to  whether  a  consignor  can 
control  the  routing  of  his  shipments  when  the  carrier  refuses  to  accept 
shipments  unless  it  has  the  right  to  route  same  as  it  desires. — Ed. 


555 


THE     TRADEMARK    LAW    ENACTED    FEBRUARY     20,     1905,     BY 
CONGRESS,  AND  THE  NECESSITY  FOR  REGISTRATION  UNDER 

THE  SAME. 

(Kubber  Paint  Company,  March  17,  1905.) 
"We  have  been  recently  receiving  a  flood  of 
letters  from  attorneys  in  reference  to  the  new 
trademark  law,  in  which  they  seem  to  agree  that 
we  should  make  a  re-registration  of  all  of  our 
trademarks.  This  would  be  quite  an  expense  to 
nearly  every  manufacturer  and  it  seems  to  us 
under  the  general  trademark  law  to  be  useless. 
We  would  like  to  have  you  submit  this  matter  to 
our  attorney  for  an  opinion,  and  oblige,"  etc. 

On  June  20,  1904,  I  gave  an  opinion  to  the  associa- 
tion in  which  I  stated : 

"The  right  to  a  trademark  is  a  common  law 
right  and  is  not  dependent  for  its  validity  upon 
any  statute.  Statutes  have  been  enacted  by  Con- 
gress and  different  States  in  aid  of  the  common 
law  rights  and  providing  for  the  registration  of 
trademarks,  but  compliance  with  such  statutes  is 
not  a  prerequisite  to  the  acquisition  of  a  valid 
trademark.  A  right  to  a  trademark  is  not  created 
by  registration.  Eegistration  under  the  Act  of 
Congress  is  of  little  practical  value,  except  for 
the  purpose  of  creating  a  permanent  record  of  the 
date  of  the  adoption  and  use  of  the  trademark,  or 
in  a  particular  class  of  cases  where  it  is  desirable 
to  assert  one's  rights  in  the  United  States  courts. 
That  class  of  cases  has  reference  to  foreign  com- 
merce and  commerce  with  the  Indian  tribes.  Reg- 
istration is  only  prima  facie  evidence  of  owner- 
ship of  the  trademark  registered,  and  is  not  con- 
clusive or  binding  upon  the  courts  as  to  the  right 
of  the  party  to  exclusive  use.  The  mere  fact  that 
the  trademark  has  been  registered  does  not  create 
the  conclusive  right  of  user." 

Since  the  rendition  of  that  opinion,  Congress  has  en- 
acted a  new  law  in  relation  to  the  registration  of  trade- 


556 

marks  (passed  February  20,  1905).  Section  17  of  the 
act  confers  original  jurisdiction  on  the  Federal  Courts 
of  all  suits  respecting  trademarks  registered  under 
the  act.  The  act  applies  to  all  trademarks  used 
in  commerce  with  foreign  nations,  or  with  the  Indian 
tribes,  and  to  all  trademarks  used  in  commerce  be- 
tween the  States.  The  original  act  did  not  apply  to 
the  latter  class  of  trademarks,  but  only  to  those  used 
in  commerce  with  foreign  nations  and  with  the  Indian 
tribes.  The  present  act,  therefore,  permits  the  owner 
of  a  registered  trademark,  used  in  interstate  com- 
merce, to  seek  relief  in  the  Federal  tribunal. 
Section  16  of  the  law  provides : 

''That  the  registration  of  a  trademark  under 
the  provisions  of  this  act  shall  be  prima  facie  evi- 
dence of  ownership.  Any  person  who  shall,  with- 
out the  consent  of  the  owner  thereof,  reproduce, 
counterfeit,  copy,  or  colorably  imitate  any  such 
trademark  and  affix  the  same  to  merchandise  of 
substantially  the  same  descriptive  properties  as 
those  set  forth  in  the  registration,  or  to  labels, 
signs,  prints,  packages,  wrappers,  or  receptacles 
intended  to  be  used  upon  or  in  connection  with 
the  sale  of  merchandise  of  substantially  the  same 
descriptive  properties  as  those  set  forth  in  such 
registration,  and  shall  use,  or  shall  have  used, 
such  reproduction,  counterfeit,  copy,  or  colorable 
imitation  in  commerce  among  the  several  States, 
or  with  a  foreign  nation,  or  with  the  Indian  tribes, 
shall  be  liable  to  an  action  for  damages  therefor  at 
the  suit  of  the  owner  thereof;  and  whenever  in 
any  such  action  a  verdict  is  rendered  for  the 
plaintiff,  the  court  may  enter  judgment  therein 
for  any  sum  above  the  amount  found  by  the  ver- 
dict as  the  actual  damages,  according  to  the  cir- 
cumstances of  the  case,  not  exceeding  three  times 
the  amount  of  such  verdict,  together  with  the 
costs." 
Section  19  provides: 

"That  the  several  courts  vested  with  jurisdic- 
tion of  cases  arising  under  the  present  Act  shall 


557 

have  power  to  grant  injunctions,  according  to  the 
course  and  principles  of  equity,  to  prevent  the 
violation  of  any  right  of  the  owner  of  a  trademark 
registered  under  this  Act,  on  such  terms  as  the 
court  may  deem  reasonable,  and  upon  a  decree 
being  rendered  in  any  such  case  for  a  wrongful 
use  of  a  trademark  the  complainant  shall  be  en- 
titled to  recover  in  addition  to  the  profits  to  be  ac- 
counted for  by  the  defendant,  the  damages  the 
complainant  has  sustained  thereby,  and  the  court 
shall  assess  the  same  or  cause  the  same  to  be  as- 
sessed under  its  direction.  The  court  shall  have 
the  same  power  to  increase  such  damages  in  its 
discretion  as  is  given  by  section  sixteen  in  this 
Act  for  increasing  damages  found  by  verdict  in 
actions  of  law ;  and  in  assessing  profits  the  plain- 
tiff shall  be  required  to  prove  defendant's  sales 
only;  defendant  must  prove  all  elements  of  cost 
which  are  claimed." 

If,  therefore  the  owner  of  a  trademark  used  in  in- 
terstate commerce  deems  it  of  advantage  to  resort  to 
the  Federal  tribunals  or  desires  to  recover  more  than 
the  actual  damages,  as  above  provided,  such  trade- 
mark should  be  registered. 

If  the  proper  diversity  of  citizenship  exists,  and  if 
at  least  the  sum  of  $2,000  is  involved,  the  Federal 
courts  would  have  jurisdiction  without  reference  to 
the  act  above  quoted. 


IN  REFERENCE   TO   THE   TELEPHONE  LITIGATION  WHEN   THE 
NAME  OP  THE  FIRM  HAS  BEEN  CHANGED. 

(Strube  Machine  Works,  March  17,  1905.) 
The  telephone  company  has  asked  the  Strube  Com- 
pany to  sign  a  contract  for  telephone  service  at  the 
rate  of  $175  per  annum,  and  has  refused  to  accept 
payment  under  such  contract  at  the  rate  of  $125  per 
annum  unless  a  bond  is  furnished.  Herman  Strube 
became  a  party  to  the  telephone  litigation  on  October 
2,  1901,  and  the  injunction  issued  by  Judge  Tuley  was 


558 

made  operative  as  to  him.  Although  I  am  not  so  in- 
formed, I  assume  that  the  Strube  Machine  Works  is 
the  successor  to  Herman  Strube,  and  that  the  present 
inquiry  relates  to  the  same  telephone  as  that  covered 
by  the  injunction  in  favor  of  Herman  Strube. 

Although  strictly  speaking  the  Strube  Company  is 
not  protected  by  the  injunction  now  in  force  in  favor 
of  Herman  Strube,  I  understand  that  the  telephone 
company  is  not  enforcing  the  excess  charge  of  $50 
against  companies  or  corporations  succeeding  to  the 
rights  of  those  who  are  parties  to  the  telephone  litiga- 
tion. The  Strube  Company  can  therefore  sign  the 
contract  under  protest,  and  write  on  the  contract  that 
it  signed  under  protest,  and  thereafter  tender  payment 
at  the  rate  of  $125  per  annum  for  the  telephone  serv- 
ice. If  the  telephone  company  refuses  to  accept  such 
a  contract  and  the  amount  specified  above,  if  you  will 
so  advise  me  I  will  have  the  proper  steps  taken  to  pro- 
tect the  Strube  Company.  I  suggest  that  the  Strube 
Company  advise  the  telephone  company  that  it  is  ad- 
vised by  counsel  that  it  is  protected  by  the  injunction 
now  in  force  in  favor  of  Herman  Strube. 

Of  course,  if  the  Strube  Company  is  not  the  succes- 
sor to  Herman  Strube,  these  remarks  will  not  apply. 


IN  REFERENCE  TO   THE  LIABILITY  FOR  SWITCHING  CHARGES 
AND   FOR  PER  DIEM  CHARGES  IN  ADDITION   THERETO. 

(The  Marsh  &  Bingham  Company,  March  17,  1905.) 
"As  subscribers  of  your  association,  we  would 
like  your  legal  opinion  on  the  following  switching 
question,  if  we  are  entitled  to  same  as  members. 

We  shipped  from  our  yard,  Thirty-seventh  and 
Iron  streets,  Chicago,  located  on  the  Chicago 
Junction  Eailroad,  two  cars  of  timbers  to  a  point 
on  the  Belt  Eailway.  We  paid  the  Belt  their 
switching  charges  as  per  their  bills.  Our  dealings 
were  with  the  Belt  Railway  and  we  did  not  know 
the  Chicago  Junction  in  the  matter,  further  than 
the  material  originated  on  their  line,  and  we  are 


559 

located  on  same.  The  Chicago  Junction  now  pre- 
sent us  with  a  bill  for  $1.40  per  car  per  diem  re- 
claim. We  did  not  retain  these  cars  over  the  pre- 
scribed time  in  loading. 

The  Chicago  Junction  do  in  their  published 
tariff,  which  we  have  marked,  provide  for  an  ad- 
dition at  $1.40  charge,  but  in  this  case  should  not 
this  charge  be  taken  care  of  by  the  Belt  Railway? 
Can  a  third  party  come  in  and  collect  charges  after 
you  have  settled  with  the  delivering  road  and 
is  this  per  diem  reclaim  legal  under  the  Inter- 
state and  Elkins  laws,  as  said  per  diem  is  not  for 
any  detention  or  demurrage? 

An  answer  on  this  question  will  be  of  great  serv- 
ice to  ourselves,  as  well  as  other  members  of  your 
company  which  may  be  located  on  the  Chicago 
Junction  Railroad  or  have  similar  cases." 
The  matter  is  covered,  as  far  as  I  can  ascertain 
from  the  facts,  now  presented,  by  my  opinion  of  No- 
vember 14,  1904,  and  January  5,  1905,  in  answer  to  the 
query  of  W.  0.  King  &  Co.,  to  which  I  refer. 

As  I  understand  the  facts,  the  company  made  its 
arrangements  with  the  Belt  Company.  That  company 
furnished  the  cars  and  transported  them  to  their  desti- 
nation. The  Junction  Company  was  not  known  in  the 
transaction  at  all,  and  the  M.  &  B.  Company  had  no 
dealings  whatever  with  that  company,  nor  any  notice 
that  the  Junction  Company  was  at  all  concerned  there- 
with. The  M.  &  B.  Company  settled  with  the  Belt 
Railway  for  the  entire  services  without  any  reserva- 
tion of  any  claim  on  the  part  of  the  Junction  Com- 
pany. 

If  these  assumptions  are  correct,  I  am  of  the  opin- 
ion from  the  facts  before  me,  that  the  Junction  Com- 
pany has  no  claim  against  the  M.  &  B.  Company,  but 
must  look  for  its  charges  to  the  Belt  Railway. 

NOTE: — See  opinion  of  April  20,  1907,  (Hines  Lumber  Co.)  as 
to  the  right  of  a  carrier  to  collect  per  diem  charges  in  addition  to  a 
switching  charge. — Ed. 


560 


WHETHER  A  RAILROAD  COMPANY  IS  COMPELLED  TO  RECEIVE 
CARS  FROM  A  CONNECTING  LINE  WHEN  CONSIGNED  TO 
PARTIES  LOCATED  ALONG  THE  TRACKS  OF  THE  FORMER, 
AND  AS  TO  THE  EFFECT  OF  AN  EMBARGO  AGAINST  THE  RE- 
CEIPT OF  FREIGHT  FROM  CONNECTING  LINES. 

(Manierre-Yoe  Syrup  Company,  March  17,  1905.) 

"We  should  be  pleased  to  receive  an  opinion 
from  the  attorney  as  to  whether  or  not  a  railroad 
has  the  right  to  place  an  embargo  upon  cars  of- 
fered by  a  connecting  line  consigned  to  parties 
located  on  the  tracks  of  such  railroad.    In  other 
words,  does  not  the  law  compel  a  railroad  to  re- 
ceive cars  from  another  road  when  consigned  to 
parties  located  on  the  tracks  of  such  road?" 
In  my  opinion  of  May  19,  1904,  in  response  to  an 
inquiry  from  the  Mathis  Bros.  Company,  I  discussed 
the  nature  and  effect  of  an  embargo,  with  reference  to 
a  claim  for  damages  against  the  carrier. 

An  embargo  is  a  declaration  by  a  carrier  that  a 
condition  of  congested  traffic  exists  that  will  justify 
.it  in  refusing  to  receive  freight  consigned  from  certain 
points  to  certain  other  points.  It  is  lawful  for  a  car- 
rier to  give  reasonable  preference  to  certain  goods 
over  other  goods,  and  exempt  them  from  the  operation 
of  the  embargo,  as,  for  instance,  in  the  case  of  perish- 
able freight. 

I  have  not  before  me  sufficient  facts  to  understand 
the  nature  of  the  embargo  laid  by  the  carriers,  nor  do 
I  know  whether  the  embargo  is  laid  against  the  cars 
of  a  particular  carrier  or  against  the  traffic  of  all 
roads  in  general. 

It  is  the  duty  of  the  carrier  to  keep  open  its  tracks 
so  that  freight  transportation  and  passenger  travel 
will  not  be  obstructed.  If  conditions  of  traffic  so  re- 
quire, it  is  proper,  however,  for  the  carrier  to  lay  an 
embargo  against  cars  from  connecting  lines.  As  was 
said  in  Daish  v.  R.  R.  Co.,  9  I.  C.  C.  Eep.,  520  (in- 
volving an  embargo  laid  by  the  Baltimore  &  Ohio  R. 
E.  in  1902) : 


561 

"It  is  also  proper  that  embargo  notices  should 
be  given  such  connecting  lines  so  as  to  avoid  the 
further  congestion  of  freight  in  junction  freight 
yards ;  and  in  the  forwarding  of  freight  from  con- 
necting lines  it  was  proper  that  cars  should  be 
forwarded  as  far  as  practicable  in  the  order  of 
their  receipt,  so  that  there  should  be  no  unrea- 
sonable discrimination  or  preference  which  might 
be  avoided." 

If,  however,  there  is  discrimination  against  a  cer- 
tain connecting  carrier,  and  cars  offered  by  it  are  not 
accepted  for  continuous  transportation,  there  may  be 
a  violation  of  the  Interstate  Commerce  Act.    It  must 
appear  also  that  no  unjust  discrimination  or  undue 
preference  has  been  exercised  against  the  particular 
person  to  whom  the  consignments  have  been  directed. 
Section  3  of  the  Interstate  Commerce  Act  provides : 
"Every  common  carrier  subject  to  the  provi- 
sions of  this  act  shall,  according  to  their  respec- 
tive powers,   afford  all  reasonable,   proper   and 
equal  facilities  for  the  interchange  of  traffic  be- 
tween their  respective  lines,  and  for  the  receiving, 
forwarding    and    delivering    of    passengers    and 
property  to  and  from  their  several  lines  and  those 
connecting  therewith,  and  shall  not  discriminate 
in  their  rates  and  charges  between  such  connect- 
ing lines;  but  this  shall  not  be  construed  as  re- 
quiring any  such  common  carrier  to  give  the  use 
of  its  tracks  or  terminal  facilities  to  another  en- 
gaged in  like  business." 

Section  7  of  the  Interstate  Commerce  Act  provides : 
"That  it  shall  be  unlawful  for  any  common  car- 
rier subject  to  the  provisions  of  this  act,  to  enter 
into  any  combination,  contract  or  agreement,  ex- 
pressed or  implied,  to  prevent,  by  change  of  time 
schedule,  carriage  in  different  cars,  or  by  other 
means  of  devices,  the  carriage  of  freights  from  be- 
ing continuous  from  the  place  of  shipment  to  the 
place  of  destination;  and  no  break  of  bulk,  stop- 
page, or  interruption  made  by  such  common  car- 
rier shall  prevent  the  carriage  of  freights  from 


562 

being  and  being  treated  as  one  continuous  car- 
riage from  the  place  of  shipment  to  the  place  of 
destination,  unless  such  break,  stoppage  or  inter- 
ruption was  made  in  good  faith  for  some  neces- 
sary purposes,  and  without  any  intent  to  avoid 
or  unnecessarily  interrupt  such  continuous  car- 
riage or  to  evade  any  of  the  provisions  of  this 
act." 

At  common  law  a  carrier  is  free  to  enter  into  ar- 
rangements for  the  use  of  its  tracks  or  terminal  facili- 
ties with  one  or  more  connecting  Ihies  to  the  exclusion 
of  others,  and  in  making  such  arrangements  it  does  not 
subject  itself  to  the  charge  of  giving  undue  preferences 
or  advantages. 

Oregon  Short  Line  v.  North  Pac.  R.  Co.,  51 

Fed.,  465. 
A.  T.  &  8.  F.  R.  Co.  v.  V.  D.  N.  &  0.  R.  Co., 

110  U.  S.,  667  (1883). 

The  Interstate  Commerce  Commission  has  ruled  that 
while  a  carrier  is  not  obliged  to  make  a  contract  for 
joint  tariffs  with  a  connecting  line,  yet  under  the  sec- 
tions above  quoted,  if  the  carrier  chose  to  contract 
with  one  connecting  carrier  it  will  not  be  justified  in 
refusing  to  another  carrier  equal  facilities  and  condi- 
tions. But  the  courts,  in  the  majority  of  the  cases, 
have  declined  to  enforce  the  orders  of  the  commission 
in  this  regard. 

There  is  considerable  conflict  of  authority  in  the 
Federal  courts  as  to  whether  a  carrier  under  these 
provisions  of  the  Interstate  Commerce  Act  can  grant 
facilities  to  some  connecting  carriers  and  deny  them  to 
others.  The  United  States  Supreme  Court  has  never 
directly  passed  upon  the  provisions  of  section  3  of  the 
Interstate  Commerce  Act  to  the  effect  that  a  carrier 
shall  not  be  required  to  give  the  use  of  its  tracks  or 
terminal  facilities  to  another  connecting  carrier  en- 
gaged in  like  business.  However,  in  the  following 
cases  relief  has  been  granted  to  a  connecting  carrier 
against  a  refusal  of  facilities  granted  to  other  car- 
riers : 


563 

Cutting  v.  Ey.  Co.,  30  Fed.,  663  (1887). 

N.  Y.  &  N.  R.  Co.  v.  N.  Y.  &  N.  E.  R.  Co.,  50 

Fed.,  867  (1892). 
Packet  Co.  v.  Mobile  R.   Co.,  60  Fed.,   545 

(1893). 
August  R.  Co.  v.  W  rights  vitte  R.  R.,  74  Fed., 

522  (1894). 

In  the  Augusta  R.  R.  case,  supra,  it  was  held  that 
the  resisting  carrier  could  be  compelled  by  mandamus 
to  forward  the  freight  of  competing  carriers  on  like 
terms  and  furnish  like  facilities  as  were  furnished 
rival  competitors.  And  in  the  Packet  Company  case, 
supra,  an  action  of  damages  for  discrimination  against 
the  resisting  carrier  was  maintained  by  the  connecting 
carrier. 

However,  the  great  weight  of  authority  is  to  the  ef- 
fect that  a  carrier  may  grant  certain  facilities  to  one 
connecting  carrier  and  refuse  the  same  to  another, 
without  subjecting  itself  to  a  charge  of  discrimination. 
This  conclusion  is  based  on  the  provision  of  Sec.  3  of 
the  Interstate  Commerce  Act,  that  "this  shall  not  be 
construed  as  requiring  any  such  common  carrier  to 
give  the  use  of  its  tracks  or  terminal  facilities  to  an- 
other carrier  engaged  in  like  business,"  which  is  a 
qualification  and  limitation  on  the  preceding  require- 
ments as  to  affording  equal  facilities  without  dis- 
crimination. To  this  effect,  see: 

Kentucky  &  I.  Bridge  Co.  v.  L.  &  N.  R.  Co., 

31  Fed.,  567,  627  (1889). 
Little  Rock  R.  Co.  v.  St.  Louis,  etc.,  R.  Co., 

41  Fed.,  559  (1890). 
Little  Rock  R.  Co.  v.  E.  Tenn.  R.  Co.,  47  Fed., 

771  (1891). 
Little  Rock  R.  Co.  v.  St.  Louis,  'etc.,  R.  Co., 

59  Fed.,  400. 
Little  Rock  R.  Co.  v.  St.  Louis,  etc.,  R.  Co., 

63  Fed.,  775,  11  C.  C.  A.,  417. 
Cowan  v.  Bond,  39  Fed.,  54  (1889). 
Oregon  Short  Line  v.  North  Pac.  R.  Co.,  51 
Fed.,  465,  affirmed  in  61  Fed.,  158,  9  C.  C.  A., 
409  (1894). 


564 

St.  Louis  Drayage  Co.  v.  L.  &  N.  R.  Co.,  65 

Fed.,  39  (1894). 
Prescott  &  A.  R.  Co.  v.  A.  T.  &  S.  F.  R.  Co., 

73  Fed.,  438  (1896). 
Gulf  R.  R.  v.  Miami  S.  S.  Co.,  86  F.,  407,  30 

C.  C.  A.,  142(1898). 

In  Stockyards  Company  v.  L.  &  L.  R.  R.,  118  Fed., 
113,  55  C.  C.  A.,  63,  it  is  said  that  certain  facilities 
cannot  be  denied  to  some  and  afforded  to  others,  but 
that  this  is  far  from  saying  that  it  was  the  purpose  of 
the  law  to  dictate  to  common  carriers  the  means  by 
which  it  shall  discharge  its  obligations  to  shippers. 

The  reason  of  the  rule  is  well  expressed  in  Ken- 
tucky &  I.  Bridge  Company  v.  L.  &  N.  R.  Co.,  31  Fed., 
570,  by  Judge  Jackson,  where  it  is  held  that : 

1 '  The  provision  in  Sec.  3  of  the  Act  to  the  effect 
that  a  common  carrier  shall  not  be  required  to 
give  the  use  of  its  tracks  and  terminal  facilities 
to  another  carrier  engaged  in  like  business,  is  a 
limitation  upon,  or  qualification  of,  the  duty  of 
affording  all  reasonable,  proper  and  equal  facili- 
ties for  the  interchange,  or  for  the  receiving,  for- 
warding and  delivering  of  traffic  to,  from  and  be- 
tween connecting  lines;  and  therefore  it  is  left 
open  to  any  common  carrier  to  contract,  or  enter 
into  arrangements  for  the  use  of  its  tracks  and 
terminal  facilities  with  one  or  more  connecting 
lines,  without  subjecting  itself  to  the  charge  of 
giving  an  undue  or  unreasonable  preference  or 
advantage  to  such  lines,  or  of  discriminating 
against  other  carriers  who  are  not  parties  to,  or 
included  in  such  arrangements.  No  common  car- 
rier can  therefore  justly  complain  of  another  that 
it  is  not  allowed  the  use  of  that  other's  tracks  and 
terminal  facilities  upon  the  same  or  like  terms  and 
conditions,  which,  under  private  contract  or  agree- 
ment, are  conceded  to  other  lines. ' ' 
On  the  other  hand,  if  the  public  is  seriously  incon- 
venienced by  a  denial  of  equal  facilities,  I  am  of  the 
opinion,  on  the  authority  of  the  doctrine  stated  by  the 
United  States  Supreme  Court  in  the  Express  Cases, 


565 

117  U.  S.,  128,  that  a  different  question  would  be  pre- 
sented and  relief  might  be  granted.  But  if  the  em- 
bargo is  to  relieve  congestion  of  traffic,  or  is  even  a 
denial  of  the  facility  of  a  thorough  shipment  in  bulk, 
and  without  change  of  cars,  to  one  connecting  carrier, 
I  am  of  the  opinion  that  it  is  legal  and  the  shipper 
has  no  recourse.  If,  however,  the  embargo  is  illegally 
maintained,  and  undue  preference  is  given  to  a  par- 
ticular class  of  traffic,  not  justified  by  the  nature  of 
such  traffic,  a  different  question  would  be  presented. 

NOTE: — See  the  opinion  of  April  20,  1907  (Wilson's  Interest)  as 
to  forcing  the  interchange  of  business  by  connecting  carriers,  and 
the  cases  therein  cited. — Ed. 


SPECIAL  PRINTED  CONTRACTS  WITH  CARRIERS  RELEASING 
CARRIER  FROM  LIABILITY,  AND  THE  ADVISABILITY  OF 
SIGNING  SAME. 

(Williams,  White  &  Co.,  March  17,  1905.) 
Williams,  White  &  Co.  ask  an  opinion  upon  a  pro- 
posed contract  between  that  company  and  the  C.,  B.  & 
Q.  R.  Co.    The  contract  is  as  follows : 

* '  CHICAGO,  BURLINGTON  &  QUINCY  BAIL  WAY  Co. 
Special  Contract. 

Moline,  111.,  Jan.  1,  1905. 

Whereas,  Williams,  White  &  Co.,  desirous  of 
both  shipping  and  receiving  property  and  freight, 
both  perishable  and  otherwise,  from  time  to  time, 
over  the  lines  of  the  Chicago,  Burlington  &  Quincy 
Railway  Company,  and  wishes  to  avoid  the  incon- 
venience of  making  a  special  contract  for  each 
separate  shipment ;  and  whereas,  the  said  Chicago, 
Burlington  &  Quincy  Railway  Company  is  willing 
to  receive  for  shipment  such  property  upon  the 
conditions  herein  named : 

Now  the  parties  hereto  agree,  in  consideration 
of  said  railway  company  receiving  and  transport- 
ing such  property  without  payment  of  freight  in 
advance,  that  each  and  every  shipment  of  such 
property  to  or  by  said  Williams,  White  &  Co., 


566 

over  the  lines  of  the  Chicago,  Burlington  &  Quincy 
Railway  Company  shall  be  deemed  to  be  shipped 
under  the  terms  and  conditions  herein  expressed, 
in  addition  to  the  terms  and  conditions  contained 
in  the  bill  of  lading  or  receipt  for  the  said  prop- 
erty; that  is  to  say,  that  said  railway  Company 
shall  not  be  liable  for  any  damage  to,  or  loss  of 
weight  or  quantity  of  said  property,  however  the 
same  may  occur,  except  as  such  as  may  result 
from  negligence  of  the  railway  company,  and, 
further,  that  if  the  freight  and  charges  upon  any 
of  said  shipments  are  not  paid  upon  arrival  of 
the  same  at  the  point  of  destination,  or  within 
twenty-four  hours  thereafter,  or  in  the  event  that 
any  of  the  property  so  shipped  shall  be  taken 
upon  legal  process  from  the  possession  of  the  rail- 
way company  without  payment  of  said  freight  and 
charges  the  said  Williams,  White  &  Co.  will  pay  the 
same  upon  presentation  of  a  bill  therefor. 

This  contract  shall  also  extend  and  apply  to  all 
freight  which  is  specified  at  released  rates  in  the 
classifications  governing  shipments  between  the 
points  concerned,  shipped  by  or  to  party  of  the 
second  part  up  to  December  31,  1905,  and  such 
released  rates  are  a  further  consideration  for  this 
contract. 

CHICAGO,  BURLINGTON  &  QUINCY  RAIL- 
WAY COMPANY, 

By  H.  S.  FRISTOE, 

Agent." 

The  matter  is  covered  by  my  opinion  of  February  2, 
1905,  in  answer  to  the  query  of  M.  A.  Fountain  &  Co. 
The  carrier  is  attempting  to  limit  its  common  law 
liability  by  obtaining  the  signature  of  the  shipper  to 
the  above  contract.  The  shipper  has  everything  to 
lose  and  nothing  to  gain  by  signing  such  a  contract,  as 
the  consideration  is  for  the  benefit  of  the  carrier  alone. 
I,  therefore,  advise  that  the  shipper  refuse  to  sign  the 
same. 

Whether  the  contract  is  binding  upon  the  shipper, 
if  signed,  is  covered  by  my  opinion  of  February  13, 


567 

1904,  and  the  various  opinions  subsequent  thereto.  If 
the  shipper  is  not  given  "real  freedom  of  choice," 
and  if  the  requisites  referred  to  in  my  opinion  are  not 
present,  the  contract  is  not  binding.  The  contract 
does  recite  that  the  agreement  is  made  in  considera- 
tion of  the  railway  company  ' '  receiving  such  property 
without  payment  of  freight  in  advance."  Although 
this  makes  the  contract  slightly  stronger  than  the  con- 
tract referred  to  in  my  prior  opinion,  I  am  of  the  opin- 
ion that  it  will  not  be  sufficient  to  exempt  the  carrier 
from  liability  in  this  State.  But  to  be  on  the  safe  side, 
I  advise  that  the  contract  be  not  signed. 


WHETHER  A  CARRIER  CAN  LIMIT  ITS  COMMON  LAW  LIABILITY 
BY  OBTAINING  SIGNATURE  OF  THE  SHIPPER  TO  A  SPECIAL 
CONTRACT  RELEASING  WAREHOUSE  LIABILITY  OF  A  CAR- 
RIER, UNDER  THE  LAW  OF  ILLINOIS. 

(S.  Oppenheimer  &  Co.,  March  17,  1905.) 

"We  enclose  herewith  notice  received  from  the 
Chicago  Great  Western  Railway.  We  see  no 
reason  why  we  should  sign  an  agreement  of  this 
kind.  Do  you?" 

The  notice  and  form  of  agreement  referred  to  are  as 
follows : 

"Herewith  form  of  release  to  be  signed  for 
goods  stored  in  our  freight  house  for  your  ac- 
count. 

Will  you  kindly  sign  and  return  to  me,  and 
oblige. 

In  consideration  of  the  Chicago  Great  West- 
ern Railway  Company  storing  at  any  time  for  the 
undersigned  any  personal  property  on  its  prem- 
ises or  in  its  depots,  warehouses,  freight  houses 
or  cars,  the  undersigned  does  hereby  release  and 
discharge  said  railway  company  from,  and  agrees 
to  indemnify  it  against  any  and  all  claims  for  dam- 
ages arising  from  or  growing  out  of  any  loss,  dam- 
age or  injury  to  said  property  by  fire,  while  said 
property  is  on  said  premises  or  in  said  depots. 


568 

warehouses,  freight  houses  or  cars,  whether  caused 
by  the  negligent  act  of  said  railway  company  or 
its  employes  or  otherwise,  and  from  all  claims  for 
damages  arising  from  or  growing  out  of  any  loss 
or  damage  to  said  property  by  lightning,  rain- 
storm, or  other  cause  except  the  negligent  or  wil- 
full  acts  of  the  railway  company  while  said  prop- 
erty is  on  said  premises  or  in  said  depots,  ware- 
houses, freight  houses  or  cars. ' ' 
In  my  opinion  of  December  30,  1902,  in  answer  to 
the  query  of  the  Roos  Manufacturing  Company,  I  dis- 
cussed the  liability  of  a  carrier  as  warehouseman,  with 
reference  to  its  right  to  charge  storage  on  freight. 

A  warehouseman  is  bound  to  exercise  reasonable 
care,  but  he  is  not  an  insurer.    He  is  liable  only  for 
losses  which  may  be  guarded  against  by  the  exercise 
on  his  part  of  ordinary  care  and  diligence. 
R.  R.  v.  Montgomery,  39  111.,  336. 
However,  the  duties  of  a  common  carrier  do  not 
terminate,  and  those  of  a  warehouseman  begin,  until 
the  goods  are  safely  stored  in  a  suitable  warehouse. 
C.  &  A.  R.  R.  v.  Scott,  42  111.,  132. 
Gregg  v.  /.  C.  R.  R.,  147  111.,  550. 
The  law  does  not  require  the  warehouseman  to  con- 
struct his  building  and  freight  houses  secure  from  all 
possible  contingencies ;  if  they  are  reasonably  and  ordi- 
narily safe  against  ordinary  and  common  occurrences, 
it  is  sufficient.     As  in  all  bailments,  the  nature  and 
value  of  the  property  affect  the  question  of  ordinary 
care. 

Lawson  on  Bailments,  Sec.  47. 

By  this  agreement  the  Chicago  Great  Western  Kail- 
way  Company  seeks  to  relieve  itself  from  all  liability 
for  losses  on  goods  stored,  caused  by  fire,  whether 
due  to  its  failure  to  use  ordinary  care  or  not.  In 
other  words,  the  shipper  signing  such  an  agreement 
relinquishes  any  claim  for  losses  caused  by  fire.  He 
is  thus  forced  to  cover  the  additional  risk  by  insur- 
ance. The  only  consideration  offered  by  the  railway 
company  for  such  a  release  is  the  storing  of  goods 
which  are  in  its  depots,  warehouses,  etc.,  not  specific- 


569 

ally  stating  that  no  charge  will  be  made  for  such  stor- 
age. The  agreement  attempts  also  to  release  other 
claims  for  liability  which  might  be  occasioned  by  its 
undertaking  as  warehouseman.  The  contract  offered 
is  a  vicious  one,  and  I  advise  that  no  member  of  the 
association  sign  such  an  agreement.  It  is  for  the  bene- 
fit of  the  railway  company  alone,  and  the  shipper 
receives  no  corresponding  advantage  for  releasing  the 
railway  company  from  liability. 

It  is  also  doubtful  whether  the  contract  is  binding, 
inasmuch  as  there  is  no  consideration  moving  to  the 
shipper. 

THE  RIGHT  OF  THE  OWNER  TO  CHANGE  SHIPPING  INSTRUC- 
TIONS ON  GOODS  IN  TRANSIT. 

(St.  Charles  Condensing  Company,  March  17,  1905.) 

"As  members  of  your  association,  we  desire 
from  your  experience  or  such  information  as  you 
can  gather  (if  without  expense  to  us)  an  opinion 
on  the  following  export  shipping  question : 

Brown,  Smith  &  Co.  recently  made  shipment  of 
car  of  goods  for  Hongkong,  China,  procuring 
through  documents  from  one  of  the  Chicago  rail- 
way agents  in  the  usual  manner.  Shipping  direc- 
tions on  these  documents  reading  as  follows : 

To  the  order  of  Brown,  Smith  &  Co.,  Hong- 
kong, 

Notify  John  Dow,  Hongkong. 

Goods  to  be  carried  from  port  of  Seattle  to 
Hongkong  via  steamer  Washington,  all  freights 
prepaid  by  Brown,  Smith  &  Co. 

The  draft  vs.  documents  covering  shipment 
reaching  Hongkong  in  advance  of  arrival  of 
steamer  carrying  goods  in  Shanghai,  John  Dow 
promptly  takes  up  the  draft  and  notifies  steamer 
people  to  unload  the  goods  in  Shanghai,  which 
was  done  entirely  without  the  knowledge  or  con- 
sent of  Brown,  Smith  &  Co.,  thereby  creating  great 
annoyance  and  damage,  as  under  no  circumstances 
or  at  any  price  would  Brown,  Smith  &  Co.,  have 


570 

sold  John  Dow  the  goods  for  shipment  direct  to 
Shanghai. 

Now  the  question  is,  did  not  the  transportation 
company  by  landing  the  goods  in  Shanghai  in- 
stead of  carrying  them  through  to  Hongkong  as 
arranged  for,  violate  their  contract  with  Brown, 
Smith  &  Co.,  and  lay  themselves  liable?" 
While  the  goods  are  in  transit,  the  owner  may  at 
any  time  change  the  instructions  to  the  carrier  as  to 
their  destination.     The  consignee  is  presumed  to  be 
the  owner  of  the  goods  in  transit,  and  the  carrier  is 
entitled  to  regard  him  as  such,  unless  the  carrier  is 
advised  that  the  consignor  has  not  parted  with  his 
title  and  that  it  is  to  vest  in  the  consignee  only  upon 
the  performance  of  certain  conditions. 

Hutchinson,  Carriers  (2d  Ed.),  Sec.  394. 
5  Am.  &  Eng.  Ency.  Law,  214. 

In  this  case  there  was  an  "order  and  notify"  bill 
of  lading,  and  the  title  would  not  pass  to  the  con- 
signee until  the  drafts  attached  to  the  bill  of  lading 
were  taken  up  by  the  consignee.  The  authorities  upon 
this  proposition  are  referred  to  in  my  opinion  of  June 
18,  1903,  to  Selz,  Schwab  &  Co.  When,  therefore,  the 
draft  was  taken  up  by  John  Dow,  the  title  to  the  goods 
passed  to  him;  and  as  owner  of  the  goods  he  had  the 
right  to  change  the  destination  of  the  goods.  The 
carrier  did  not  violate  its  contract  by  thus  changing 
the  destination,  as  it  was  bound  to  obey  the  direction 
of  the  owner.  However,  as  between  the  carrier  and 
John  Dow,  it  could  exact  the  amount  of  the  freight 
charges  for  the  entire  distance  if  it  chose  so  to  do,  or 
any  expense  incurred  by  it  in  changing  the  destina- 
tion. 

THE     EFFECT     OF     STAMPING     BY     CAKRIEKS     OF     "OWNER'S 
RISK"    ON    SHIPPING   RECEIPTS. 

(F.  H.  Earl  Manufacturing  Company,  March  17,  1905.) 

That  company  states  that  several  of  the  carriers  are 

stamping  the  shipping  receipts  of  the  shippers  with 

the  notation  "Owner's  Bisk."    I  have  in  various  opin- 


571 

ions  called  attention  to  the  fact  that  a  limitation  of  the 
common  law  liability  of  the  carrier  is  not  binding  on 
the  shipper  in  this  State,  unless  he  expressly  assents 
thereto.  The  stamping  of  the  shipping  receipt,  with- 
out the  consent  of  the  shipper,  as  above  mentioned,  is 
not  sufficient  to  constitute  an  assent  to  the  restriction. 
Of  course,  if  the  shipper  signs  a  contract  or  shipping 
order  containing  restrictions,  this  constitutes  an  assent 
to  its  terms. 

I  advise  that  all  shippers  use  a  shipping  receipt,  or 
bill  of  lading,  which  contains  no  restrictions  whatever 
and  which  does  not  refer  in  any  way  to  the  company's 
rules  or  their  regular  bill  of  lading.  If  this  is  done 
and  no  special  contracts  are  signed  or  entered  into, 
the  goods  will  be  carried  at  common  law  unrestricted 
liability. 

WHETHER  A  SHIPPER  CAN  RECOVER  MORE  THAN  AN  AGREED 
VALUATION  IN  CASE  OF  DAMAGES  TO  GOODS  IN  TRANSIT. 

(L.  A.  Becker  Company,  March  21,  1905.) 
"We  wish  you  would  obtain  for  us  the  opinion 
of  Mr.  Levy  Mayer,  attorney  for  the  association, 
on  the  following  question: 

The  railroad  freight  charges  on  a  polished 
marble  slab  are  very  high  as  shipped  as  such.  A 
lower  rate  may  be  obtained  by  entering  into  an 
agreement  with  the  railroad  that  in  case  of  dam- 
age in  transit  claim  should  be  settled  at  the  rate 
of  forty  cents  per  cubic  foot.  A  shipper  in  a  re- 
cent case  was  awarded  damages  to  the  extent  of 
forty-two  cents  for  a  broken  slab  worth  $16.00. 

The  question  in  the  case  is  this :    Can  the  ship- 
per recover  more  than  the  forty-two  cents!" 
The  matter  is  covered  by  my  opinion  of  April  27, 
1903,  to  W.  H.  Bice,  and  of  February  13,  1904,  to  F.  T. 
Bentley. 

The  various  classifications  provide  for  two  different 
rates  for  the  carriage  of  marble,  one  under  a  restricted 
valuation  at  a  lower  rate,  and  the  other  at  common 
law  liability.  If  the  shipper  is  offered  his  choice  be- 


572 

tween  these  two  rates  or  has  actual  knowledge  of  the 
same,  and  then  accepts  the  lower  rate  and  assents  to 
a  contract  limiting  the  liability  of  the  carrier,  he  is 
bound  thereby.  In  such  case,  therefore,  the  shipper, 
in  case  of  loss,  could  only  recover  the  agreed  valua- 
tion. It  is  legal,  in  such  a  case,  to  fix  the  "valuation" 
and  such  will  be  binding  even  though  the  breakage  was 
due  to  the  negligence  of  the  carrier.  See: 

Ullman  v.  R.  R.  Co.,  112  Wis.,  186,  88  N.  W., 
41,  citing  cases. 

Hart  v.  R.  R.  Co.,  112  U.  S.,  331. 

IN    REFERENCE    TO     PRICE     AGREEMENTS    ON     COMMODITIES 
UNDER  THE  ILLINOIS  STATUTES. 

(Sandwich  Manufacturing  Co.,  March  17,  1905.) 

"With  this  we  attach  copy  of  a  circular  just 
received  from  the  Leather  Belting  Manufacturers' 
Association  of  New  York,  same  dated  January 
19th,  1905. 

How  can  an  announcement  of  this  kind  be  recon- 
ciled with  the  anti-trust  and  anti-price  agreement 
laws  of  Illinois  ?  The  most  of  these  Leather  Belt- 
ing Manufacturers  have  branch  houses  located  in 
Chicago,  and  these  branches  should  and  doubtless 
do  receive  from  Secretary  of  State  annually  the 
blank  for  affidavit  by  which  they  certify  that  they 
have  nothing  to  do  with  any  trust  or  combina- 
tion formed  for  the  purpose  of  fixing  prices,  re- 
stricting product,  etc.  Some  Illinois  Manufac- 
turers, including  ourselves,  have  refused  for  a 
long  time  to  participate  in  any  of  these  price 
agreement  conferences  because  we  could  not  do  so 
legally  and  we  certainly  would  not  perjure  our- 
selves to  evade  the  consequences  of  such  agree- 
ments and  affiliations. 

Can  the  Illinois  representatives  of  such  asso- 
ciations as  the  Leather  Belting  Manufacturers' 
ignore  or  in  any  way  avoid  making  reply  under 
oath  to  the  questions  propounded  annually  by 
Secretary  of  State?  If  not,  it  would  look  to  us 


573 

as  though  their  certificates  of  non-participation  in 
price  agreements  were  false." 
The  circular  in  question  states : 

1 1 A  special  meeting  of  this  Association  was  held 
in  this  city  yesterday. 

It  was  unanimously  decided  to  advance  the  price 
of  leather  belting  15  per  cent,  over  prices  pre- 
vailing November  1st,  1904.  This  advance  is  to 
take  effect  immediately. 

I  am  directed  by  the  Association  to  ask  each 
member  of  the  trade  whether  he  will  abide  by  this 
action  of  the  Association,  and  will  honestly  en- 
deavor to  obtain  the  above  mentioned  advance  in 
price. ' ' 

The  Illinois  statute  (Section  1,  Act  of  June  1,  1891; 
Laws  of  1891,  p.  206)  provides: 

''If  any  corporation  organized  under  the  laws 
of  this  or  any  other  State  or  country,  for  trans- 
acting or  conducting  any  kind  of  business  in  this 
State,  or  any  partnership  or  individual  or  other 
association  of  persons  whosoever,  shall  create, 
enter  into,  become  a  member  of  or  a  party  to  any 
pool,  trust,  agreement,  combination,  confederation 
or  understanding  with  any  other  corporation, 
partnership,  individual,  or  any  other  person,  or 
association  of  persons,  to  regulate  or  fix  the  price 
of  any  article  of  merchandise  or  commodity,  or 
shall  enter  into,  become  a  member  of  or  a  party 
to  any  pool,  agreement,  contract,  combination  or 
confederation  to  fix  or  limit  the  amount  or  quan- 
tity of  any  article,  commodity  or  merchandise  to 
be  manufactured,  mined,  produced  or  sold  in  this 
State,  such  corporation,  partnership  or  individual 
or  other  association  of  persons  shall  be  deemed 
and  adjudged  guilty  of  a  conspiracy  to  defraud, 
and  be  subject  to  indictment  and  punishment  as 
provided  in  this  act." 

The  amendatory  act  of  June  20,  1893  (Laws  of  1893, 
p.  89)  provides  that  the  Secretary  of  State  shall  an- 
nually address  to  every  corporation  a  letter  of  inquiry 
as  to  whether  the  said  corporation 


574 

"has  all  or  any  part  of  its  business  or  interest  in 
or  with  any  trust,  combination  or  association  of 
persons  or  stockholders,  *  and  to  require 

an  answer  under  oath,  a  form  of  affidavit 

shall  be  enclosed    *  as  follows." 

Then  follows  a  form  of  affidavit  in  the  language  of 
the  act  above  quoted,  and  stating  that  the  company  for 
which  it  is  made  has  not  violated  the  law,  etc. 

If,  therefore,  a  manufacturer  of  this  state  enters 
into  any  arrangement  or  agreement  with  any  other 
person  for  any  of  the  purposes  set  forth  in  the  statute 
above  quoted,  he  is  subject  to  indictment  as  provided 
in  the  act,  and  if  any  such  manufacturer  agrees  to 
abide  by  the  action  of  the  Association  and  to  raise  the 
price  of  the  commodity,  such  agreement  being  made 
or  performed  within  this  state,  would  be  guilty  of  a 
violation  of  the  act. 

If  any  person  falsely  makes  an  affidavit  that  his 
corporation  has  not  violated  the  law,  he  will  be  guilty 
of  perjury.  The  corporation  would  also  be  subject  to 
indictment  for  violation  of  the  law,  as  the  immunity 
provided  for  in  the  act  is  only  applicable  where  there 
is  a  truthful  disclosure. 


IN  KEFEBENCE  TO  LABELING  IMPORTED  FOOD  PBODUCTS 
UNDEB  REGULATIONS  OF  THE  DEPARTMENT  OF  AGRICUL- 
TURE. 

(Glaser,  Kohn  &  Co.,  March  17,  1905.) 

"We  are  in  possession  of  a  circular  No.  18, 
Bureau  of  Chemistry,  issued  by  U.  S.  Department 
of  Agriculture  regarding  foreign  labeling  and 
branding  of  foods,  drugs,  etc.,  and  would  like  to 
obtain  what  information  we  can  about  same : 

How  will  it  affect  the  use  of  fictitious  foreign 
names  and  addresses  on  domestic  goods? 

How  will  it  affect  the  labeling  of  goods  imported 
in  bulk,  bottled  in  this  country  and  labeled  with  a 
fictitious  foreign  name  and  address? 

How  will  it  affect  the  labeling  of  goods  imported 


575 

in  bulk,  blended  with  domestic  goods  and  labeled 
with  foreign  name  and  address  ? 

Its  affect  on  goods  imported  in  bulk,  bottled  in 
this  country  and  bearing  the  name  of  importer 
and  bottler. 

Any  other  information  regarding  the  workings 
of  this  law  which  you  may  possess." 
The  appropriation  act  for  the  year  ending  June  30, 
1905,  made  an  appropriation  for  the  following  pur- 
pose: 

"To  investigate  the  adulteration,  false  label- 
ing, or  false  branding  of  foods,  drugs,  beverages, 
condiments,  and  ingredients  of  such  articles,  when 
deemed  by  the  Secretary  of  Agriculture  ad- 
visable; and  the  Secretary  of  Agriculture,  when- 
ever he  has  reason  to  believe  that  such  articles 
are  being  imported  from  foreign  countries  which 
are  dangerous  to  the  health  of  the  people  of  the 
United  States,  or  which  shall  be  falsely  labeled  or 
branded  either  as  to  their  contents  or  as  to  the 
place  of  their  manufacture  or  production,  shall 
make  a  request  upon  the  Secretary  of  the  Treas- 
ury for  samples  from  original  packages  of  such 
articles  for  inspection  and  analysis,  and  the  Sec- 
retary of  the  Treasury  is  hereby  authorized  to 
open  such  original  packages  and  deliver  speci- 
mens to  the  Secretary  of  Agriculture  for  the  pur- 
pose mentioned,  giving  notice  to  the  owner  or  con- 
signee of  such  articles  who  may  be  present  and 
have  the  right  to  introduce  testimony;  and  the 
Secretary  of  the  Treasury  shall  refuse  delivery  to 
the  consignee  of  any  such  goods  which  the  Secre- 
tary of  Agriculture  reports  to  him  to  have  been 
inspected  and  analyzed  and  found  to  be  dangerous 
to  health,  or  falsely  labeled  or  branded,  either  as 
to  their  contents  or  as  to  the  place  of  their  manu- 
facture or  production,  or  which  are  forbidden  en- 
try to  be  sold,  or  are  restricted  in  sale  in  the  coun- 
tries in  which  they  are  made  or  from  which  they 
are  exported." 
The  circular  recites: 


576 

"In  order  to  facilitate  the  execution  of  this  law 
and  to  avoid  any  unnecessary  delay  in  the  inspec- 
tion of  products  on  arrival,  the  attention  of  im- 
porters is  called  to  the  following  suggestions." 
Then  follows  a  statement  as  to  the  purposes  of  the 
inspection  and  a  statement  of  what  foods  are  deemed 
to  be  adulterated,  misbranded.  etc.   It  is  then  recited: 
"Food   products    will    also   be    excluded   from 
entry  into  the  United  States  if  they  are  of  a  char- 
acter or  kind  forbidden  entry  in  the  country  where 
they  are  manufactured  or  from  which  they  are. 
exported. 

Food  products  will  also  be  excluded  from  the 
United  States  if  they  are  forbidden  to  be  sold  or 
are  restricted  in  sale  in  the  countries  in  which 
they  are  manufactured  or  from  which  they  are 
exported. ' ' 

It  is  thus  apparent  that  the  inspection  relates  only 
to  articles  that  are  imported,  and  the  only  effect  pro- 
duced by  a  report  that  goods  are  adulterated  or  falsely 
labeled  would  be  to  deny  entry  to  such  goods  when 
imported.  I  am  of  the  opinion,  therefore,  that  if  the 
goods  when  imported  are  not  adulterated  or  falsely 
labeled,  they  cannot  be  denied  entry  because  of  the 
fact  that  they  may  be  afterwards  falsely  labeled  or 
adulterated.  The  circular  in  question  does  not,  in  my 
view,  affect  any  of  the  queries  in  the  communication 
under  consideration. 


WHETHER  MONEY  THAT  IS  COLLECTED  ON  A  NOTE  MADE 
PAYABLE  AT  A  CERTAIN  BANK  IS  A  TRUST  FUND  FOR  THE 
OWNER  OF  THE  PAPER  WHEN  THE  BANK  FAILS  AFTER  HAV- 
ING MADE  THE  COLLECTION  ;  THE  RULE  IN  TEXAS. 

(Studebaker  Bros.   Manufacturing  Company,   March 

21,  1905.) 

"We   would  like   to  have  you   get   Mr.   Levy 
Mayer's  opinion  on  the  following  case: 

We  held  the  note  of  a  Texas  customer,  which 
note  we  sent  out  for  collection  through  our  local 


577 

bank,  who  in  turn  sent  it  to  the  American  National, 
of  Abiline,  Tex.,  the  bank  at  which  the  note  was 
payable.  The  latter  bank  collected  this  note  from 
our  customer  and  sent  our  South  Bend  bank  their 
check  on  the  Hanover  National  Bank,  of  New 
York,  which  check  in  turn  was  forwarded  by  our 
bank  to  the  Hanover  National  Bank,  of  New 
York,  for  collection.  The  check  in  question  was 
protested  and  returned  with  the  notation,  'We 
understand  the  American  National  Bank  of  Abi- 
line, Tex.,  is  in  the  hands  of  the  comptroller  of 
the  currency.' 

The  question  we  would  like  to  ask  Mr.  Mayer 
is,  whether  we  have  a  preferred  claim  against  the 
American  National  Bank,  of  Abiline,  Tex.,  or  will 
we  have  to  come  in  as  a  general  creditor  of  the 
bank  and  take  our  pro  rata  with  the  other  cred- 
itors of  the  bank? 

Our  contention  is  that  the  funds  received  from 
the  collection  of  this  note  never  were  the  funds 
of  the  American  National  Bank,  but  were  trust 
funds,  and  as  such  should  not  be  considered  a  part 
of  the  funds  for  distribution  to  the  general  cred- 
itors of  the  American  National  Bank,  and  did  not 
the  American  National  Bank  set  aside  a  portion 
of  their  funds  on  deposit  with  the  Hanover  Na- 
tional Bank,  of  New  York,  to  take  care  of  the  de- 
posit with  the  Hanover  National  Bank,  of  New 
York,  to  take  care  of  these  funds,  and  are  we  not 
entitled  to  such  funds  as  a  preferred  creditor  1 ' ' 
The  question  must  be  determined  from  the  nature  of 
the  relationship  between  the  forwarding  bank  and  the 
collecting  bank.     It  is  almost  the  universal  doctrine 
that  when  a  draft  or  note  is  forwarded  to  a  bank  for 
collection  and  the  proceeds  are  paid  to  the  collecting 
bank,  such  bank  is  liable  as  a  debtor,  and  not  as  a  trus- 
tee, unless  there  are  special  facts  which  take  the  case 
out  of  the  ordinary  rule. 

1  Morse  on  Banks  and  Banking   (3rd  ed.), 

Sec.  248. 
3  Ency.  of  Law  (2d  Ed.),  p.  819. 


578 

Com'l  Nat'l  Bank  v.  Armstrong,  148  U.  S., 

50. 
Waterloo  Milling  Co.  v.  Kuenster,  158  111., 

259. 

Marine  Bank  v.  Rushmore,  28  111.,  463. 
Frinkham  v.  Heyworth,  31  111.,  519. 
Akin  v.  Jones,  93  Tenn.,  353. 
Billingsby  v.  Pollock,  69  Miss.,  759. 
If,  therefore,  the  collecting  bank  becomes  insolvent, 
the  creditor  has  no  lien  on  such  proceeds  and  is  not 
entitled  to  preference  in  the  payment  of  its  claim. 
3  Ency.  (2d  ed.),  p.  280,  and  cases  supra. 
The  law  is  otherwise  in  some  States.     In  the  pres- 
ent case,  the  collecting  bank  is  located  in  Texas,  and 
if  the  question  were  to  arise  in  a  court  of  that  State, 
it  would  be  determined  by  the  decision  of  the  Texas 
courts. 

In  Continental  Nat.  Bank  v.  Weems,  69  Tex.,  489, 
6  S.  W.,  802,  where  the  course  of  dealing  between  two 
banks  had  been  for  one  to  discount  notes  for  the  other, 
to  whom  they  were  forwarded  at  maturity,  for  collec- 
tion and  return,  with  an  understanding  that  the  pro- 
ceeds should  be  preserved  as  the  property  of  the  dis- 
counting bank  and  returned  to  it  as  such,  it  was 
held  that  upon  the  insolvency  of  the  collecting  bank 
having  sufficient  funds  to  cover  the  proceeds  of  the 
notes  so  collected,  it  is  to  be  deemed  a  trustee  for  the 
discounting  bank  of  the  proceeds  of  the  notes  so  col- 
lected and  the  latter  is  entitled  to  payment  of  the  same 
in  full,  in  priority  to  other  creditors. 

While  the  conclusion  in  the  above  case  would  seem 
to  be  contrary  to  the  general  rule,  it  is  based  upon 
the  facts  peculiar  to  that  case.  The  notes  were  sent 
for  "collection  and  return  of  proceeds,"  which  the 
court  held  to  be  sufficient  to  constitute  the  collecting 
bank  a  trustee.  The  court,  however,  recognizes  the 
general  rule,  stating: 

"If  the  securities  had  been  sent  for  collection 
merely,  the  proceeds  to  be  credited  to  the  New 
York  Bank,  it  is  clear  that  after  their  collection 
the  relation  of  creditor  and  debtor  would  have 


579 

subsisted,  and  the  latter  would  have  no  claim  upon 
the  funds." 

In  Hunt  v.  Towns  end,  26  S.  W.,  310  (Tex.  Civ.  App.), 
plaintiff  sent  a  draft  to  a  bank  for  collection.  The 
bank  collected  it  and  then  passed  into  the  hands  of 
a  receiver  without  remitting.  The  bank  had  made 
similar  collections  for  plaintiff,  the  proceeds  of  which 
were  always  remitted  to  him  promptly  and  never 
credited  to  him  as  a  deposit.  It  was  held  that  the 
plaintiff  was  entitled  to  be  paid  the  entire  proceeds  of 
the  draft  out  of  the  bank's  asset  in  the  receiver's 
hands  and  that  the  bank  was  a  trustee  and  not  a 
debtor.  The  court  said: 

"The  course  of  dealing  between  these  parties, 
and  the  acts  of  the  bank  in  reference  to  such 
transactions,  necessarily  involved  an  understand- 
ing that  the  collection  should  be  made  and  re- 
mitted without  unreasonable  delay.  There  is  noth- 
ing from  which  could  be  implied  an  authority 
for  the  bank  to  hold  the  money,  and  treat  it  as  a 
deposit.  The  amount  of  this  collection  was  on 
hand,  of  the  general  funds  of  the  bank,  when  the 
receiver  took  possession,  and  plaintiff  is  entitled 
to  receive  the  same,  instead  of  a  pro  rata  with 
creditors. ' ' 

In  Peters  Shoe  Company  v.  Murray,  71  S.  W.,  977 
(Civ.  App.  Texas,  1903),  plaintiff  drew  a  draft  on  its 
debtor  and  sent  it  to  the  defendant's  assignor,  a 
banker,  for  collection.  The  drawee  paid  it  with  a 
check  on  the  bank  of  such  banker  where  the  drawer 
had  sufficient  funds  to  meet  it  and  the  amount  was 
charged  to  the  account  of  such  drawer,  and  a  draft 
issued  on  another  bank  and  mailed  to  the  plaintiff. 
Before  such  draft  reached  plaintiff,  the  banker  as- 
signed to  the  defendant,  and  the  bank  on  which  the 
draft  was  drawn  refused  to  pay  it.  When  the  bank 
failed,  money  more  than  sufficient  to  pay  such  draft 
passed  to  the  assignee.  There  was  no  evidence  of  the 
course  of  dealing  between  plaintiff  and  defendant's 
assignor,  or  of  any  instructions  given  by  plaintiff. 
It  was  held  that  the  relation  between  plaintiff  and  de- 


580 

f  endant  's  assignor  was  merely  that  of  debtor  and  cred- 
itor, and  plaintiff  had  no  claim  to  the  money  received 
by  defendant  as  assignee  of  a  trust  fund.  The  court 
said: 

"The  facts  of  this  case  are  very  similar  to 
those  in  the  case  of  Hunt  v.  Townsend,  26  S.  W., 
310,  decided  by  this  court,  the  material  differences 
being  that  the  check  in  that  case  was  paid  in  cash, 
and  in  this  was  paid  by  a  check  drawn  by  the 
payor  on  the  collecting  bank,  and  in  that  a  course 
of  dealing  and  instructions  were  shown,  and  none 
were  shown  in  this.  It  is  the  well  settled  doctrine 
in  this  State,  as  well  as  in  a  large  number  of 
States  in  the  Union,  that  in  a  case  like  the  pres- 
ent, where  a  special  agency  is  created,  and  the 
bank  has  no  authority  to  hold  and  credit  the  pro- 
ceeds of  the  bank,  but  is  bound  by  the  agreement 
to  remit  them  immediately  to  its  correspondent, 
the  relation  of  trustee  and  beneficiary  is  created, 
and  the  money  collected,  or  its  equivalent,  can  be 
recovered  from  the  assignee  of  the  insolvent  bank. 
Bank  v.  Weems,  69  Tex.,  489,  6  S.  W.,  802,  5  Am. 

St.  Rep.,  85. 

******* 

We  are  of  the  opinion  that  the  funds  were  col- 
lected by  Briscoe  on  the  draft  as  much  so  as 
though  the  money  had  been  paid  into  his  hands, 
but  it  does  not  follow  that  they  were  invested  with 
the  trust  character.  'When  the  funds  are  col- 
lected, and  in  the  collecting  bank,  whether  or  not 
those  funds  become  a  general  deposit  in  the  bank, 
it  depends  upon  the  course  of  dealing  between  the 
parties,  if  there  has  been  one,  or,  if  there  has  been 
no  course  of  dealing,  and  no  express  contract,  ex- 
cept to  collect,  has  been  made,  the  funds  after 
collection  belong  to  the  bank,  and  the  relation  of 
debtor  and  creditor  exists  between  the  bank  and 
its  depositor.'  Zane,  Banks  and  Banking,  Sec. 
133.  The  text  is  well  supported  by  authority, 
Bank  v.  Weems,  69  Tex.,  489,  6  S.  W.,  802,  5  Am. 
St.  Rep.,  85;  Bank  v.  Armstrong,  148  U.  S.,  50, 


581 

13  Sup.  Ct.,  533,  37  L.  ED.,  363;  Bank  v.  Hubbel, 
117  N.  Y.,  384,  22  N.  E.,  1031,  7  L.  E.  A.,  852,  15 
Am.  St.  Bep.,  515.  In  this  case  it  does  not  ap- 
pear that  any  proof  was  made  of  the  course  of 
dealing  between  appellant  and  Briscoe,  nor  was  it 
shown  what  instructions  were  given  by  appellant 
to  Briscoe.  The  transaction  is  one  merely  of 
sending  a  draft  to  a  bank  for  collection  without 
and  former  course  of  dealing  or  special  instruc- 
tions to  take  it  out  of  the  general  rule,  which 
would  raise  the  relation  of  debtor  and  creditor  be- 
tween the  bank  and  drawer  of  the  draft.  It  is  a 
well  established  rule  that  when  a  bank  is  hope- 
lessly insolvent,  and  that  fact  is  known  by  owners 
or  officers,  the  acceptance  of  a  draft  for  collection 
is  such  fraud  as  will  entitle  the  owner  of  the  pro- 
ceeds to  reclaim  them." 

The  question  presented  in  the  present  case  must, 
therefore,  be  determined  from  the  course  of  dealing 
between  the  parties  and  the  banks,  the  instructions  to 
the  collecting  bank  and  from  all  the  facts  and  circum- 
stances in  the  particular  case.  I  have  not  sufficient  of 
the  facts  to  formulate  a  definite  conclusion.  I  have, 
however,  gone  sufficiently  into  the  authorities  to  guide 
the  Studebaker  Manufacturing  Company. 

I  wish  to  point  out  in  conclusion  that  the  Federal 
courts,  sitting  in  Texas,  are  on  the  question  under 
consideration,  not  bound  by  the  Texas  court  decisions. 
The  question  is  one  of  general  commercial  law,  upon 
which  the  Federal  courts  formulate  their  own  rule  of 
decision  which  is  stricter  than  that  laid  down  by  the 
Texas  courts.  That  the  Texas  courts  will  not  neces- 
sarily follow  the  State  courts  upon  such  a  question, 
see: 

Swift  v.  Tyson,  16  Pet.,  1. 
Mfg.  Co.  v.  Ins.  Co.,  179  U.  S.,  15. 
Upon  the  present  inquiry  the  Federal  courts  hold 
that  the  trust  fund  theory  does  not  apply,  and  that  the 
relation  of  debtor  and  creditor  exists.    See : 

Bank  v.  Armstrong,  148  U.  S.,  50. 
In  the  present  case  suit  would  lie  in  the  State  courts 


582 

of  Texas,  even  though  the  comptroller  is  in  charge  of 
the  bank. 

Bank  v.  Armstrong,  148  U.  S.,  50. 

Calhoun  v.  Lanaux,  127  U.  S.,  634,  639. 

Bank  v.  Pahquique  Bank,  14  Wall.,  383,  395. 

THE  LIABILITY  OF  A  BANK  FOR  PROCEEDS  OF  CHECKS  FOR- 
WARDED FOR  COLLECTION  WHEN  THE  CHECKS  ARE  SENT 
FOR  COLLECTION  TO  THE  BANK  UPON  WHICH  THEY  ARE 
DRAWN. 

(Beggs  Manufacturing  Company,  March  22, 1905.) 

"We  believe  that  information  as  to  the  following 
proposition  would  be  of  general  interest  to  the 
members  of  the  association,  and  we  should  be  glad 
to  have  the  opinion  of  the  association's  attorney, 
Mr.  Levy  Mayer,  as  to  the  liability. 

An  out  of  town  attorney  in  remitting  for  a  col- 
lection sent  us  his  personal  check  drawn  on  his 
local  bank;  we  deposited  the  check  with  our  bank 
here  in  the  regular  course  of  business.  It  after- 
ward transpired  that  they  sent  the  check  direct 
to  the  bank  on  which  it  was  drawn  and  received 
in  payment  thereof  that  bank's  draft  on  an  east- 
ern bank.  This  draft  in  turn  was  sent  through 
the  regular  channels  to  the  bank  on  which  it  was 
drawn  and  they  returned  same  to  our  bank  with 
the  notation,  "refused  because  of  insufficient 
funds. ' ' 

The  question  is,  who  is  to  suffer  the  loss?  Our 
bank  asks  us  to  reimburse  them,  claiming  that 
they  are  acting  as  our  agent  when  collecting 
money  and  that  they  never  actually  received  it. 
If  we  accept  their  version  what  is  our  recourse? 
If  our  bank  would  return  to  us  the  original  check 
we  could  go  to  the  attorney  who  made  the  collec- 
tion and  ask  him  to  make  it  good,  but  as  the  bank 
does  not  return  us  the  check,  but  simply  the  bank 
draft,  our  attorney  says  that  he  paid  us  the 
money  with  his  check,  which  afterward  was  re- 
turned to  his  bank  and  has  been  charged  up 


583 

against  his  account.  We  should  like  to  know 
whether  or  not  our  bank's  position  is  the  correct 
one.  It  would  seem  to  us  that  if  we  deposited  a 
•$100.00  bill  and  the  bill  afterward  became  muti- 
lated or  destroyed  so  that  its  full  face  value  could 
not  be  collected,  that  they  might  ask  us  to  make 
that  bill  good." 

In  my  opinion  of  March  21,  1905,  in  response  to  an 
inquiry  from  Studebaker  Bros.  Mfg.  Co.,  I  discussed 
the  liability  of  the  assignee  of  an  insolvent  collecting 
bank,  for  the  proceeds  of  papers  forwarded  for  col- 
lection. 

In  Illinois  it  is  held  that  a  bank  which  receives  for 
collection  a  check  on  another  bank,  according  to  the 
general  banking  customs,  and  uses  due  care  and  dili- 
gence in  forwarding  the  check  and  selecting  the  col- 
lecting bank,  is  not  liable  to  the  payee  for  negligence 
for  the  default  of  the  collecting  bank,  as  the  collecting 
bank  is  the  agent  of  the  payee  and  not  of  the  forward- 
ing bank. 

Wilson  v.  Nat 'I  Bank,  187  111.,  222. 
In  other  words,  the  collecting  bank  becomes  the  agent 
of  the  owner  of  the  check  and  not  merely  of  the  for- 
warding bank. 

Milling  Co.  v.  Kuenster,  158  111.,  259. 
And  with  few  exceptions  all  checks  which  are  credited 
to  depositors  are  entered  with  the  express  or  implied 
right  to  charge  them  back  if  they  are  not  paid. 

5  Cyc.  Law,  499,  citing  cases. 

It  is  held  by  many  of  the  courts  that  the  bank  upon 
which  a  check  is  drawn  is  not  a  suitable  agent  to  collect 
the  bill,  and  the  forwarding  bank  is  guilty  of  negligence 
in  selecting  such  bank  and  must  answer  for  all  loss 
accrusing  as  the  result  of  such  a  selection. 
SEncl.  Law  (2d  Ed.),  809. 
1  Morse,  Banks  and  Banking  (3d  Ed.),  Sec. 

236a. 

Bank  v.  Goodman,  109  Pa.  St.,  422. 
Farwell  v.  Curtis,  1  Biss.,  160. 
Bartel  v.  Bank,  95  Ga.,  277. 
Anderson  v.  Rogers,  53  Kas.,  542. 


584 

Door  Co.  v.  Bank,  76  Minn.,  36. 

In  Illinois  it  has  been  held  that  a  Chicago  bank, 
which  received  a  certified  check  for  collection,  and  for- 
warded it  for  collection  to  the  certifying  bank,  which 
mailed  in  return  a  worthless  draft,  was  liable  to  the 
depositor  for  the  full  amount  of  the  check.  The  court 
there  said  that  the  debtor  can  not  be  the  disinterested 
agent  of  the  creditor  to  collect  the  debt,  and  is  not  a 
suitable  agent  for  collection. 

Drovers  Nat 'I  Bank  v.  Provision  Co.,  117  111., 

100  (1886). 

In  a  later  case,  Wilson  v.  Carlinville  Nat'l  Bank,  187 
111.,  222  (1900),  it  was  held  that  where  one  deposits  in 
a  bank  a  check  for  collection,  drawn  by  a  third  person 
on  another  bank,  which  is  the  only  one  at  the  place 
where  it  is  located,  and  it  is  the  custom  of  banks,  in 
collecting  checks,  to  transmit  them  directly  to  the 
drawee,  where  no  other  bank  exists  at  the  particular 
point,  such  depositor  can  not  be  heard  to  say  that  the 
selection  of  the  correspondent  bank,  which  was  also  the 
drawee,  was  negligent  in  rendering  the  forwarding 
bank  responsible  for  the  loss  of  the  check. 
The  court  there  said : 

"It  is  a  well-known,  long  established  and  gen- 
eral custom  of  collecting  banks,  to  transmit  directly 
to  their  correspondent  out  of  town  banks  for  collec- 
tion— checks  drawn  upon  such  out  of  town  banks 
and  in  their  hands  for  collection — in  cases  where 
there  is  no  other  bank  in  such  towns. ' ' 
And  so  in  Whitney  v.  Esson,  99  Mass.,  308,  311,  it 
was  held  that  it  was  not  a  reasonable  usage  to  send 
the  draft  to  the  drawee  and  run  the  risk  of  receiving 
worthless  paper  in  return,  and  of  sacrificing  the  claims 
of  the  owner  on  prior  parties. 

Custom  and  usage,  however,  enter  largely  into  the 
construction  of  the  liability  of  a  bank  for  collections. 
A  depositor  in  selecting  a  bank  as  his  collecting  agent 
and  thus  availing  himself  of  its  facilities,  is  bound  by 
any  reasonable  usage  prevailing  among  the  banks 
whether  he  knew  of  it  or  not. 
5  Cyc.  Law,  504. 


585 

There  might  be  proof  of  such  a  custom  and  usage 
among  banks  to  send  collections  to  its  own  correspond- 
ents even  though  such  correspondents  were  also  the 
drawees,  as  would  preclude  the  depositor  from  claim- 
ing that  the  forwarding  bank  was  negligent  in  that 
regard.  In  Drovers'  Nat'l  Bank  v.  Provision  Co.,  117 
111.,  100,  106,  the  court  said  that  the  quantum  of  evi- 
dence that  certain  banks  in  Chicago  were  in  the  habit 
of  transmitting  checks  drawn  on  other  banks,  to  those 
for  collection,  hardly  came  up  to  the  requirements  of 
the  court  in  regard  to  proof  of  a  common  law  custom. 

In  Farwell  v.  Curtis,  1  Biss.,  160,  it  was  held  that 
the  practice  of  sending  checks  by  mail  to  the  drawee 
was  not  usual,  thereby  indicating  that  no  such  custom 
or  usage  was  there  established  or  relied  upon. 

But  in  Kershaw  v.  Ladd,  34  Ore.,  374,  44  L.  E.  A., 
236  (1899),  it  was  "held  that  it  was  not  negligence  of 
the  forwarding  bank  to  send  a  check  to  the  drawee's 
bank  for  collection  where  it  was  proved  that  such  was 
the  custom  of  banks,  nor  was  such  custom  unreason- 
able. The  court  there  relied  upon  the  fact  that  it  was 
evident  in  most  of  the  cases  that  such  a  custom  had  not 
been  raised  or  established. 

Furthermore,  in  Givan  v.  Bank,  47  L.  E.  A.,  270 
(Tenn.  Ch.  1898),  it  was  held  that  where  the  forward- 
ing bank  selects  a  suitable  intermediate  bank,  which 
forwards  the  check  for  collection  to  the  drawee  bank, 
the  forwarding  bank  is  not  liable  for  negligence,  but 
the  negligence  is  that  of  the  intermediate  bank,  and 
the  forwarding  bank  is  not  then  liable  to  the  depositor. 

In  most  of  the  cases  where  the  forwarding  bank  has 
been  held  liable  for  negligence,  the  ground  of  the  de- 
cision has  been  that  the  debtor  bank  is  not  a  proper 
agent  to  collect  where  such  collecting  bank  is  itself  the 
debtor.  Where  a  check  or  draft  is  drawn  on  a  bank, 
such  bank  is  not  a  debtor  until  the  check  or  draft  is 
accepted  except  in  states  like  Illinois  where  a  check 
constitutes  an  assignment  of  the  fund.  It  has  been 
held  that  where  a  note  is  payable  at  a  bank  it  is  not 
negligence  to  send  such  note  to  that  bank. 
Indig  v.  Bank,  80  N.  Y.,  100. 


586 

However,  the  distinction  in  question  does  not  seem 
to  have  been  referred  to  in  any  of  the  cases. 

I  have  not  sufficient  facts  before  me  to  express  an 
opinion  as  to  whether  such  a  custom  could  be  proved 
in  the  present  case.  In  the  absence  of  such  a  custom  I 
am  inclined  to  the  opinion  that  in  this  state  the  bank  is 
guilty  of  negligence,  in  sending  the  check  for  collec- 
tion to  the  drawee  and  it  is  therefore  responsible  to 
the  depositor  for  the  loss  occasioned  thereby.  In  the 
absence  of  such  liability,  the  insolvent  bank  could  be 
liable  only  as  a  general  creditor  for  the  amount  of  the 
check ;  of  course,  if  there  is  no  other  bank  in  the  town 
the  case  would  fall  within  the  doctrine  of  Wilson  v. 
Bank,  187  111.,  222,  supra.  There  can,  however,  be  no 
claim  against  the  local  attorney.  His  check  was  paid 
by  the  bank  when  it  cancelled  the  check  and  drew  its 
draft  as  a  remittance  for  the  proceeds. 


NOTE: — See  First  National  Bank  v.  Whittier,  221  111.,  319. — Ed. 


THE  LIABILITY  OF  A  CONSIGNOR  FOR  FREIGHT  CHARGES 
WHEN  THE  CONSIGNEE  REFUSES  TO  ACCEPT  THE  GOODS 
OR  HAS  BECOME  BANKRUPT. 

(Garden  City  Sand  Company,  March  22,  1905.) 

"Shipper  ordered  material  shipped  from  a  cer- 
tain point  to  a  certain  other  point;  the  consignee 
refused  to  pay  the  freight  and  other  charges  due 
on  the  material  on  its  arrival  at  destination ;  sub- 
sequently the  consignee  was  thrown  into  bank- 
ruptcy. 

Has  the  railroad  company  the  right  to  store  the 
goods  in  warehouse  without  notice  to  the  con- 
signor, and  then  after  such  storing  notify  the  con- 
signor, and  hold  consignor  responsible  for  the 
freight,  demurrage  and  storage  charges? 

It  seems  to  us  in  this  matter  that  if  the  railroad 
company  is  legally  right  in  its  action,  the  company 
can,  if  so  inclined,  subject  an  innocent  shipper  to 


587 

a  severe  loss  by  reason  of  the  charges  for  freight, 
demurrage  and  storage  being  in  excess  of  the  value 
of  the  material. 

In  above  matter  the  consignor  was  notified  after 
demurrage  had  accrued.  Is  it  not  the  duty  of  a 
railroad  company  to  look  to  the  consignee  for  the 
charges  against  the  property  shipped?  We  do 
not  know  how  often  cases  of  this  kind  occur,  but 
in  our  experience  it  is  the  first  case  of  the  kind, 
and  we  would  like  to  have  the  benefit  of  the  advice 
of  the  association's  counsel;  and  we  feel  sure  that 
other  members  of  the  association  will  be  glad  to 
read  his  opinion." 

In  general,  the  consignor  is  liable  for  freight  charges 
when  the  consignee  refuses  to  accept  the  goods  shipped, 
irrespective  of  whether  title  is  in  the  consignor  or  the 
consignee. 

6  Cyc.,  500,  and  cases  cited. 
Holt  v.  Westcott,  43  Me.,  445. 

If  the  consignee  refuses  to  take  the  goods  on  arrival, 
it  is  the  duty  of  the  carrier  to  store  them  and  the  lia- 
bility thereafter   is  that   of  a  warehouseman.     The 
carrier  is  under  no  obligation  to  return  them. 
R.  R.  Co.  v.  Heilprin,  95  111.  App.,  402. 
6  Cyc.  Law,  474,  and  cases  cited. 
In  Illinois  no  obligation  rests  upon  a  railroad  com- 
pany to  give  special  notice  to  the  consignee  of  the 
arrival  of  goods,  unless  such  notice  is  required  by  a 
valid  custom,  of  which  the  parties  have  notice,  and 
which  is  presumed  to  be  a  part  of  the  contract. 

There  is  a  conflict  of  authority  as  to  whether  the 
carrier  is  bound  to  give  notice  to  the  consignor  of  the 
refusal  of  the  consignee  to  accept  the  goods.  The 
question  has  not  been  squarely  passed  upon  in  this 
State. 

In  Gregg  v.  I.  C.  R.  R.,  147  111.,  550,  it  was  decided 
that  the  carrier  need  not  give  the  consignor  notice  that 
the  consignee  refuses  to  accept  the  goods,  where  such 
notice  was  given  by  the  consignee,  and  to  the  same 
effect  is  Rubber  Shoe  Company  v.  R.  R.  Co.,  41  N.  Y. 
S.,  82. 


588 

In  Hutchinson  on  Carriers  (2d  Ed.),  Sec.  388,  it  is 
said: 

"The  duty  to  give  notice  to  the  consignor  or 
owner  of  the  goods,  in  case  of  their  refusal  by  the 
consignee,  or  when  he  is  absent  or  can  not  be 
found,  can  arise  only  when  the  carrier  is  required 
to  make  a  personal  delivery  or  to  give  notice  to 
the  consignee  of  their  arrival.  It  has  no  applica- 
tion, therefore,  to  railroad  companies,  when  they 
are  only  required  to  deposit  the  goods  in  their 
warehouses  to  await  the  call  of  the  consignee,  with- 
out notice  to  him,  which,  as  we  have  seen,  is  all 
that  is  generally  required  of  such  companies. 
Their  whole  duty  as  carriers  is  performed  as  soon 
as  this  is  done,  and  the  failure  as  warehousemen 
to  give  such  notice  would  not  be  such  negligence 
as  to  make  them  liable  in  that  character  for  any 
loss  which  might  be  thereby  occasioned.  It  is  also 
said  that  when  the  duty  devolves  upon  the  carrier 
to  give  such  notice  to  the  consignor,  and  the  at- 
tempt is  made  to  hold  him  liable  for  the  failure  to 
perform  it,  it  must  appear,  before  he  will  be  made 
liable,  that  the  loss  for  which  the  claim  is  made 
upon  him  was  the  consequence  of  the  omission  to 
give  the  notice.  If  the  loss  be  attributable  to  a 
cause  which  had  no  connection  with  notice  to  the 
owner,  and  which  such  notice  would  not  have  pre- 
vented, it  is  evident  that  the  carrier  should  not  be 
held  liable  for  his  failure  to  give  it." 
And  to  the  effect  that  no  notice  is  necessary  to  the 
consignor,  are  the  following  authorities: 

Kremer  v.  Express  Co.,  6  Cold.  (Tenn.),  356. 
Weed  v.  Barney,  45  N.  Y.,  344. 
Shoe  Co.  v.  R.  R.  Co.,  41  N.  Y.  Supp.,  83. 
6  Cyc.,  474,  and  cases  cited. 

On  the  contrary,  however,  it  has  been  held  that  it  is 
the  duty  of  the  carrier  to  notify  the  consignor  when 
the  consignee  fails  to  receive  the  goods. 

Sugar  Refining  Co.  v.  McGhee,  96  Ga.,  27. 
5  Ency.  Law  (2d  Ed.),  222. 
In  6  Cyclopedia  of  Law,  474,  it  is  said : 


589 

''If  the  consignee  fails  or  refuses  to  take  or 
accept  the  goods  when  ready  for  delivery,  the  car- 
rier remains   liable   for  them  as   warehouseman 
only,  but  he  is  not  under  obligation  to  return  them 
to  the  consignor.     The  duty  of  the  carrier  is  to 
store  or  keep  as  warehouseman,  and  it  seems  that 
the  carrier  is  not  bound  to  give  the  consignor  no- 
tice of  the  refusal  of  the  consignee  to  accept." 
But,  as  opposed  to  this,  in  5  Encl.  of  Law  (2d  Ed.), 
222,  it  is  said : 

"Notice   should  be   sent   to    the   consignor   or 
owner,  and  the  goods  should  be  held  in  storage 
for  a  reasonable  time,  subject  to  further  orders; 
if  the  parties  still  refuse  to  act,  the  lien  may  be 
enforced  as  provided  by  law." 
Although  most  of  the  cases  cited  in  support  of  the 
latter  quotation  do  not  bear  out  the  statement,  it  ap- 
parently presents  the  better  view  and  I  am  of  the  opin- 
ion that  this  rule  would  probably  be  held  to  be  the  cor- 
rect one,  if  the  question  were  raised  in  the  courts  at 
the  present  day.    Custom  and  usage  have  entered  so 
largely  into  the  construction  of  contracts  of  this  char- 
acter, that  if  it  appeared  that  it  was  the  usage  of  car- 
riers to  notify  consignors  of  the  refusal  of  consignees 
to  accept,  the  carrier  would  be  bound  to  do  so. 

When  the  consignee  refuses  to  accept  or  pay  for  the 
goods,  this  is  notice  to  the  carrier  that  the  goods  are 
the  property  of  the  consignor,  and  the  carrier  must 
look  to  the  consignor  for  the  charges.  The  carrier 
thus  becomes  the  agent  of  the  owner  (consignor)  and 
is  bound  to  exercise  a  reasonable  diligence  in  protect- 
ing the  rights  of  the  owner. 

I  am  inclined  to  the  opinion  that  the  courts  of  this 
State,  if  the  question  is  squarely  presented,  ought  to 
and  will  hold  that  it  is  the  duty  of  the  carrier  to  notify 
the  consignor,  with  due  diligence,  and  hold  the  goods 
in  storage  for  a  reasonable  time  to  await  further 
orders.  If  any  loss  directly  results  from  the  failure 
of  the  carrier  to  give  timely  notice,  the  carrier  is  liable 
therefor. 

The  carrier  has  a  lien  on  the  goods  for  freight  and 


590 

storage  charges  and  the  consignor  is  liable  for  those 
charges.  Some  doubt  exists  as  to  whether  the  carrier 
has  a  lien  for  demurrage  charges,  but  in  most  of  the 
States,  including  Illinois,  such  a  lien  exists. 

Schumacher  v.  R.  R.  Co.,  207  111.,  199  (1904). 

R.  R.  Co.  v.  Dorsey  Fuel  Co.,  1"2  111.  App.,  382. 

Yazoo,  etc.,  R.  Co.  v.  Searles,  37  So.  Rep.,  939 

(Miss.,  1905). 

In  most  of  the  States,  therefore,  the  consignor  would 
be  liable  for  freight,  storage  and  demurrage  charges. 
However,  if  the  carrier  failed  to  use  due  diligence 
under  the  circumstances  in  notifying  the  consignor 
and  damage  directly  results  therefrom  to  the  con- 
signor, the  consignor  is  entitled  to  deduct  such  charges 
from  the  amount  due  the  carrier. 


NOTE: — See  the  later  opinion  .of  Nov.  26,  1907  (Hunt,  Helm,  Ferris 
&  Co.),  as  to  the  law  of  all  the  states  upon  the  duty  of  a  carrier  to 
give  notice  to  the  consignor  of  the  consignee 's  refusal  or  failure  to 
receive  the  good  shipped. — Ed. 


WHETHER    A    CONSIGNEE    CAN    BE    COMPELLED    TO    PAY    CAR 
SERVICE   CHARGES   ACCRUING   AT    POINT   OF    SHIPMENT. 

(Charles  H.  Hears  &  Co.,  March  22,  1905.) 
"We  have  had  some  controversy  lately  with  Mr. 
H.  H.  Peebles,  local  agent  for  the  C.  M.  &  St.  P. 
Ey.  at  Division  street.  He  has  put  a  few  cars  into 
our  yard,  on  the  expense  bill  for  which,  beside  the 
ordinary  freight  charge,  there  was  attached  an 
item  varying  from  $1.00  to  $3.00,  same  being  for 
car  service  accruing  at  point  of  shipment.  Inas- 
much as  this  car  service  was  something  we  could 
not  locate,  and,  from  our  point  of  view,  being 
properly  a  collection  to  be  made  by  the  agent  at 
said  point  of  shipment,  we  refused  to  pay  this 
claim  for  car  service,  claiming,  first,  that  the  agent 
had  no  right  to  attach  a  charge  for  car  service 
on  to  a  regular  expense  bill,  and  second,  that  this 
car  service  should  have  been  collected  at  point  of 
shipment  by  the  local  agent  at  said  point.  No  rail- 
way company,  we  contend,  has  a  right  to  make  a 


591 

collection  agency  out  of  us  for  something  that  we 
know  nothing  about. 

Mr.  Peebles  refers  us  to  Article  E,  in  Rule  19 
of  the  Car  Service  Rules,  under  date  of  Septem- 
ber 1,  1904.  We  should  like  to  have  an  opinion 
from  your  office  as  to  whether  we  are  right  or 
wrong  in  our  contention." 

I  am  not  familiar  with  the  terms  of  the  bill  of  lad- 
ing under  which  the  shipment  was  made,  nor  am  I 
informed  as  to  the  place  where  the  shipment  orig- 
inated. In  the  various  classifications  it  is  provided 
that  the  consignee  shall  be  liable  for  demurrage  ac- 
cruing both  at  point  of  shipment  and  at  destination. 
The  uniform  bill  of  lading  contains  a  similar  condi- 
tion. The  consignor  has  the  power  to  bind  the  con- 
signee by  signing  a  bill  of  lading  containing  such  a 
condition  and  in  such  a  case  the  consignee  would  be 
liable.  I  assume,  however,  that  no  such  condition  was 
contained  in  the  present  bill  of  lading. 

Demurrage  charges  in  this  State  are  not  considered 
as  transportation  or  freight  charges.  Article  E  in 
Rule  19  of  the  Car  Service  Rule  provides : 

"Car  service  charges  due  for  detention  of  cars 
ordered  to  connecting  lines  within  the  switching 
limits  of  this  association  shall  be  collected  by  the 
agent  of  the  forwarding  line.  When  cars  are  or- 
dered or  destined  to  points  beyond  switching  lim- 
its, the  agent,  may,  at  his  option,  collect  from  ship- 
per or  consignee,  or  let  the  charges  follow  as  ad- 
vances." 

These  rules  do  not  bind  the  consignee  or  the  shipper 
unless  they  are  just  and  reasonable.  In  the  present 
case  I  assume,  as  appears  to  be  the  fact,  that  the  cars 
upon  which  the  demurrage  accrued  have  been  deliv- 
ered to  the  consignee.  It  does  not  appear  that  the 
carrier  is  attempting  to  withhold  the  cars  or  to  en- 
force a  demurrage  lien  thereon.  In  most  of  the  States, 
including  Illinois,  the  carrier  is  entitled  to  a  lien 
against  the  goods  for  demurrage,  but  it  waives  this 
lien  by  delivering  the  goods  to  the  shipper. 

In  the  absence  of  any  provision  in  the  bill  of  lading 


592 

as  above  set  forth,  there  is  no  privity  of  contract  be- 
tween the  carrier  and  the  consignee  in  relation  to  the 
demurrage  charge  in  question  and  I  am  of  the  opin- 
ion that  the  consignee  can  not  be  held  liable  therefor. 
See: 

Schumacher  v.  C.  &  N.  W.  Ry.  Co.,  207  111., 
199. 

R.  R.'Co.  v.  Fuel  Co.,  112  111.  App.,  382. 

Miller  v.  R.  R.  Co.,  88  Ga.,  563. 

R.  R.  Co.  v.  Steel  Co.,  201  Pa.  St.,  624. 

R.  R.  Co.  v.  Adams,  90  Va.,  393. 

Darlington  v.  R.  R.  Co.,  72  S.  W.,  122  (Tex.). 

Construction  Co.  v.  R.  R.  'Co.,  121  Ala.,  621. 

R.  R.  Co.  v.  Comm.,  46  S.  E.  (Va.),  911. 

R.  R.  Co.  v.  George,  35  So.,  193  (Miss.). 

Yazoo,  Etc.,  R.  Co.  v.  Searles,  37  So.,  939 
(Miss.,  Feb.,  1905). 

NOTE: — See  opinion  of  March  27,  1906  (Western  United  Gas  & 
Electric  Co.),  as  to  the  right  of  a  carrier  to  a  lien  for  car  service  or 
demurrage  charges  and  as  to  the  law  in  general  in  relation  to  de- 
murrage charges. — Ed. 

WHETHER  A  RAILROAD  CAN  REFUSE  TO  HANDLE  SHIPMENTS 
FOR  POINTS  WITHIN  THE  CITY  LIMITS  TO  WHICH  THEY 
HAVE  PUBLISHED  TARIFFS,  AND  AS  TO  THE  EFFECT  OF 
THE  PROBABILITY  OF  A  STRIKE  AS  AN  EXCUSE  FOR  SUCH 
REFUSAL. 

(Barrett  Manufacturing  Company,  May  22,  1905.) 

" Referring  to  the  writer's  conversation  with 
you  over  the  'phone  this  morning  regarding  re- 
fusal of  the  C.,  M.  &  St.  P.  Railroad  to  handle 
shipments  for  points  within  the  city  limits  to 
which  they  have  published  tariffs. 

The  only  excuse  which  they  have  to  offer  for 
not  doing  so  is  that  their  Mr.  C.  D.  Bush,  General 
Superintendent,  has  entered  into  an  agreement 
with  the  switchmen,  trainmen,  freight  handlers 
and  heads  of  all  Unions  employed  by  that  com- 
pany, not  to  handle  any  freight  within  the  switch- 
ing limits  during  the  Teamsters'  strike.  The 


593 

Unions '  part  of  the  agreement  being  that  they  will 
handle  any  freight  which  is  delivered  to  the  freight 
houses  or  received  from  connecting  lines  from 
points  outside  of  the  city  limits  whether  loaded  or 
delivered  by  Union  or  Non-union  labor. 

Their  switching  tariff  No.  14  reading  between 
Chicago  station,  also  between  Chicago  station  and 
points  of  interchange  with  connecting  lines  pro- 
vides for  switching  rates  between  Chicago,  Union 
Stock  Yards,  Western  avenue,  Cragin  Junction, 
Division  street,  Deering  and  Union  Stock  Yards 
of  from  $5.00  to  $8.00  per  car.  Their  G.  F.  D. 
No.  4700  provides  for  local  rates  based  on  Illinois 
Distance  from  Chicago  to  Cragin,  Elsmere,  Her- 
mosa  and  various  other  points  within  the  city  lim- 
its. They  have,  however,  refused  to  receive  freight 
for  any  of  these  points.  Mr.  Bush,  as  well  as  the 
other  officials  of  the  St.  Paul,  no  doubt,  feel  that 
they  are  legally  bound  to  perform  this  service 
even  under  the  present  conditions,  but  evidently 
prefer  to  stand  any  damages  which  they  may  be 
put  to  on  account  of  their  refusal  to  perform  the 
service  rather  than  have  their  system  tied  up  for 
a  few  days  on  account  of  a  strike. 

If  there  is  any  action  we  can  take  to  compel  the 
St.  Paul  to  handle  our  business  we  would  like  to 
be  advised  at  an  early  date  so  that  the  proper 
steps  can  be  taken  in  this  direction. ' ' 
In  a  subsequent  communication  the  company  states : 
"The  only  information  which  we  now  desire  on 
the  subject  is  what  action  can  be  taken  to  compel 
the  St.  Paul  Kailroad  to  handle  shipments  as  pre- 
scribed by  law. ' ' 

A  common  carrier  is  bound  at  common  law  to  re- 
ceive and  transport  goods  for  all  alike  without  un- 
just discrimination.  This  is  its  public  duty  and  it 
can  not  exempt  itself  therefrom  by  any  contract.  Such 
a  contract  would  be  against  public  policy  and  there- 
fore void. 

C.  &  N.  W.  Ey.  Co.  v.  People,  56  111.,  365. 
Railway  Co.  v.  Mining  Co.,  68  111.,  489. 


594 

Not  only  this  duty  exists  at  the  common  law,  but 
it  has  been  recognized  and  provided  for  by  express 
statutory  enactment. 

Kurd's  Kev.   Stat.  of  111.,   1903,   Chap.   114, 

Sees.  22,  23. 

If  the  carrier,  therefore,  refuses  to  accept  and  carry 
freight  without  sufficient  excuse  therefor,  it  can  be 
coerced  to  do  so  by  the  writ  of  mandamus.  Of  course, 
the  carrier  can  refuse  to  carry  in  particular  cases,  as, 
for  instance,  that  the  freight  is  improperly  packed  or 
because  the  charges  are  not  paid  in  advance,  but  where 
the  freight  is  refused  on  a  particular  ground  the  car- 
rier is  estopped  to  say  that  it  refused  on  other  grounds. 
Again,  the  statute  above  referred  to  expressly  pro- 
vides that  freight  need  only  be  paid  in  advance  where 
That  mandamus  is  the  proper  remedy,  see  the  fol- 
lowing : 

People  v.  R.  R.  Co.,  176  111.,  512. 
C.  &  N.  W.  Ry.  Co.  v.  People,  56  111.,  365. 
5  Am.  Eng.  Enc.  Law  (2d  ed.),  162. 
/.  C.  R.  R.  Co.  v.  People,  143  111.,  434. 
C.  &  A.  R.  R.  Co.  v.  Suffer*,  129  111.,  274. 
The  rule  is  otherwise  in  some  of  the  States  for  the 
reason  that  in  such   States  mandamus   will  not  lie 
where  the  party  has  other  adequate  remedy. 

Hutchinson  on  Carriers  (2d  ed.),  Sec.  115  b. 
Under  the  Illinois   Statute   regulating  mandamus, 
however,  the  existence  of  another  remedy  does  not  af- 
fect the  right  to  a  mandamus.    The  statute  also  pro- 
vides that  treble  damages  may  be  recovered. 
See 

R.  R.  Co.  v.  People,  19  111.  App.,  141. 
A  mandatory   injunction  can   also   be   obtained  to 
compel  the  railroad  company  to  carry  goods  without 
discrimination. 

Marshall  Field  &  Co.  v.  Becklenberg,  1  111.  C. 

C.,  59  (1905). 
C.,  B.  &  Q.  Ry.  v.  Burlington  R.  R.,  34  Fed., 

481. 

Toledo  &  C.  R.  Co.  v.  Penn.  R.  Co.,  54  Fed., 
730. 


595 


lift  v.  Southern  R.  Co.,  123  Fed.,  789. 
In  re  Lennon,  166  U.  S.,  548. 
Vincent  v.  C.  &  A.  Ry.,  49  111.,  33. 
High  on  Injunctions  (3d  Ed.),  Sec.  621a. 


NOTE: — See  opinion  of  April  20,  1907  (Wilson's  Interest),  in  refer- 
ence to  forcing  the  interchange  of  switching  by  connecting  carriers. — 
Ed. 


THE  METHOD  OF  PROCEDURE  TO   OBTAIN  A  SECOND  LEVY  ON 
PROPERTY  COVERED  BY  A  JUDGMENT. 

(E.  H.  Sargent  &  Co.,  March  22, 1905.) 
"We  would  like  to  ascertain  what  method  of 
procedure  is  taken  to  obtain  a  second  levy,  pro- 
vided one  levy  is  made  covering  a  judgment,  and 
the  amount  of  the  levy  is  not  sufficient  to  satisfy 
the  entire  judgment." 

Section  4,  Chap.  77,  Eevised  Statutes  of  Illinois, 
provides : 

"The  person  in  whose  favor  any  judgment,  as 
aforesaid,  may  be  obtained,  may  have  execution 
thereon  in  the  usual  form,  directed  to  the  proper 
officer  of  any  county,  in  this  State,  against  the 
lands  and  tenements,  goods  and  chattels  of  the 
person  against  whom  the  same  is  obtained,  or 
against  his  body,  when  the  same  is  authorized  by 
law. ' ' 

'(2  S.  &  C.,  Rev.  Stat.,  p.  2331.) 
Section  8  provides: 

"Executions  *  *  *  shall    be    made    returnable 
ninety  days  after  the  date  thereof. ' ' 
Section  10  provides: 

"All  and  singular  the  lands,  tenements,  real  es- 
tate, goods  and  chattels  (except  such  as  is  by  law 
declared  to  be  exempt)  of  every  person  against 
whom  any  judgment  has  been  or  shall  be  hereafter 
obtained  in  any  court  of  record,  for  any  debts, 
damages,  costs,  or  other  sum  of  money,  shall  be 
liable  to  be  sold  upon  execution,  to  be  issued  upon 
such  judgment." 

(2  S.  &  C.,  Rev.  Stat.,  2340.) 


596 

Section  48  of  the  same  act  provides  the  method  for 
the  sale  of  personalty  levied  upon,  under  an  execu- 
tion. 

The   original  execution  is,  therefore,  effective  for 
ninety  days  after  its  issuance,  and  during  this  time  an 
alias  or  second  can  not  be  levied.    During  this  period 
the  sheriff  may  levy  upon  any  property  of  the  defend- 
ant not  exempt,  sufficient  to  satisfy  the  judgment.  The 
sheriff,  however,  may  take  the  responsibility  of  re- 
turning the   execution   before  the   expiration   of  the 
ninety  days.    If  the  judgment  is  unsatisfied,  in  whole 
or  in  part,  after  the  return  of  the  first  execution,  the 
plaintiff  may  cause  an  alias  or  second  execution  to  be 
issued  and  levied  on  the  property  of  the  defendant. 
This  can  not  be  done,  however,  until  the  return  of  the 
original  execution  and  until  the  prior  levy  has  been 
disposed  of  by  the  sale  of  the  property,  or  otherwise. 
Marshall  v.  Moore,  36  111.,  321. 
Harris  v.  Evans,  81  111.,  419. 
Bowen  v.  Parkhurst,  24.  111.,  258. 
8  Ency.  of  PI.  &  Pr.,  p.  440. 

But  it  is  within  the  power  of  the  court  to  issue  an 
alias  execution  even  though  the  original  execution  has 
not  been  returned  and  where  exceptional  circumstances 
exist  this  power  will  be  exercised. 

Freeman  on  Executions  (2d  ed.),  Sec.  52. 

In  case  the  sheriff  fails  to  proceed  with  the  sale,  a 
writ  of  venditioni  exponas  may  be  issued  compelling 
him  to  do  so.  The  levy  upon  property  is  not  prima 
facie  evidence  of  a  satisfaction,  and  if  the  prior  levy 
is  undisposed  of,  the  writ  of  venditioni  exponas  can 
be  issued  in  a  fi.  fa.  clause  or  an  alias  execution  added. 
The  officer  must  then  sell  the  property  levied  on  under 
the  first  execution  and  if  it  proves  insufficient,  then 
the  officer  can  seize  and  sell  other  property  sufficient 
to  satisfy  the  judgment. 

Babcock  v.  McCamant,  53  111.,  214. 
Freeman  on  Executions  (2d  ed.),  Sees.  57-59. 


597 


INJUNCTIONS   AGAINST   EMPLOYES   TO   RESTEAIN   PICKETING. 

(La  Bastie  Glass  Company,  of  Ottawa,  111.,  April  17, 

1905.) 

"We  have  at  present  a  strike  on,  and  at  times 
our  old  employes  bother  us  considerably  in  the  way 
of  interfering  with  our  present  workmen.    In  men- 
tioning the  fact  to  our  attorney  this  morning  of 
being  members  of  this  Association,  he  said  it  might 
be  well  if  we  would  write  you  and  ask  you  for  in- 
formation from  the  Association's  attorney,  as  to 
injunctions,  as  we  are  about  to  ask  the  court  to 
grant  us  an  injunction  against  our  old  employes." 
In  my  opinion  of  November  10,  1904,  in  response 
to  an  inquiry  from  the  Illinois  Malleable  Iron  Com- 
pany I  discussed  the  granting  of  injunctions  to  re- 
strain picketing  by  labor  unions.     An  injunction  will 
generally  lie  to  restrain  labor  unions  and  members 
from  attempting  by  intimidation,  threats  of  personal 
violence  and  other  unlawful  means  to  force  employes 
to  quit  work  and  join  a  strike. 

In  Christensen  v.  Kellogg  Switchboard  &  Supply 
Co.,  110  111.  App.,  61  (1903),  it  was  held  that  an  in- 
junction was  properly  issued  to  restrain  strikers  from 
gathering  around  their  former  employer's  place  of 
business,  stationing  themselves  in  the  streets  and  al- 
leys and  approaches  to  such  place  of  business,  intimi- 
dating the  employes  of  such  employer  who  insist  on 
remaining  at  work,  maintaining  what  is  known  as  a 
system  of  picketing,  and  menacing  and  threatening 
his  employes  where  such  employer  has  suffered  pe- 
cuniary loss  through  his  inability  to  complete  his  con- 
tracts. 

In  my  opinion  above  referred  to,  I  said : 

"Picketing  in  itself  is  not  unlawful,  but  when 
accompanied  by  threats,  abusive  epithets,  or  in- 
timdations,  it  becomes  unlawful." 
So,  in  this  case,  if  there  is  merely  persuasion  exer- 
cised by  the  striking  employes,  an  injunction  will  not 
lie.    But,  if  violence,  intimidation  or  such  interference 


598 

with  the  employes  is  used  as  to  intimidate  a  reason- 
able man  and  prevent  him  from  laboring,  such  acts 
are  unlawful,  and  can  be  enjoined. 

The  authorities  are  in  general  accord  on  this  ques- 
tion and  injunction  will  be  granted  under  the  limita- 
tions above  stated.  In  response  to  the  information  de- 
sired, I  cite  the  following  cases  where  the  rule  is  laid 
down  as  above: 

To  the  same  effect  see: 

Beaton  v.  T arrant,  102  111.  App.,  124  (1902). 
Shoe  Co.  v.  Saxey,  131  Mo.,  212,  32  S.  W., 

1106. 

Vegelalin  v.  Gunther,  167  Mass.,  92 ;  44  N.  E., 
1077,  35  L.  E.  A.,  722,  which  discusses  the 
subject  thoroughly. 

Plant  v.  Woods,  176  Mass.,  492,  57  N.  E.,  1011. 
Cumberland  Glass  Mfg.  Co.  v.  Union,  59  N.  J. 

Eq.,  49,  46  Atl.,  208. 
Flaccus  v.  Smith,  199  Pa.  St.,  128. 
Mfrs.  Outlet  Co.  v.  Longley,  20  E.  L,  86. 
Lyons  v.  Wilkins,  (1896)  1  Ch.,  811,  830. 
Printing  Co.  v.  Howell,  38  Pac.,  547,  28  L.  E. 

A.,  464. 

Murdoch  v.  Walker,  152  Pa.,  595,  25  Atl.,  492. 
Sherry  v.  Perkins,  147  Mass.,  212. 
Erdman  v.  Mitchell,  207  Pa.,  79. 
Mining  Co.  v.  Miner's  Union,  51  Fed.,  250. 
And  see  note  on  Injunctions  against  Strikes,  in  28 
L.  E.  A.,  464,  and  cases  there  cited. 

18  Am.  Eng.  Enc.  Law  (2d  Ed.),  80,  91,  92. 
And  see  cases  in  Century  Digest,  vol.  27,  cc!812-15, 
sees.  174,  175. 

2  Eddy  on  Combinations,  sec.  1027  et  seq. 
Eay  on  Contractual  Limitations,  sec.  77. 
Cogley  on  Strikes  and  Lockouts. 

NOTE: — See  also,  the  later  Illionis  cases:  O'Brien  v.  People,  216 
111.,  354,  affirming  Christensen  v.  People,  114  111.  App.,  40;  Sloan  v.  Peo- 
ple, 115  111.  App.,  84;  McBride  v.  People,  127  111.  App.,  344;  Franklin 
Union  v.  People,  220  111.,  355;  Flannery  v.  People,  225  111.,  62;  Hake 
v.  People,  230  111.,  174;  and  Employers'  Teaming  Co.  v.  Teamster's 
Joint  Council,  141  Fed.,  679. — Ed. 


599 


THE     CONSTITUTIONALITY    OF     THE     FOREIGN     CORPORATION 
TAX    LAW    OF    TEXAS. 

(Parjin  &  Orendorff  Company,  April  17,  1905.) 

"We  enclose  herewith  a  copy  of  the  Texas  law 
on  franchise  taxes  and  would  be  pleased  to  have 
you  give  us  your  opinion  upon  its  constitutionality 
or  the  necessity  of  paying  the  tax  as  a  foreign 
corporation  domiciled  in  the  State  of  Texas.  Must 
the  tax  be  paid  on  the  entire  corporation  stock  in 
the  Illinois  corporation,  or  only  upon  the  capital 
furnished  to  the  branch  houses  doing  business  in 
the  State  of  Texas?" 
I  have  examined  the  law  in  question  and  am  of  the 

opinion  that  it  is  a  constitutional  enactment.    The  law 

provides  inter  alia. 

"Each  and  every  foreign  corporation  hereto- 
fore authorized  or  that  may  hereafter  be  author- 
ized to  do  business  in  this  State,  shall,  on  or  be- 
fore the  first  day  of  May  of  each  year,  pay  to 
the  secretary  of  state  the  following  franchise  tax 
for  the  year  following,  to-wit :  One  dollar  on  each 
one  thousand  dollars  or  fractional  part  thereof 
of  the  authorized  capital  stock  of  the  corporation 
up  to  and  including  one  hundred  thousand  dol- 
lars; and  one  dollar  on  each  five  thousand  dol- 
lars or  fractional  part  thereof  of  such  stock  in 
excess  of  one  hundred  thousand  dollars,  and  up 
to  and  including  one  million  dollars ;  and  one  dol- 
lar on  each  twenty  thousand  dollars  or  fractional 
part  thereof  of  such  stock  in  excess  of  one  mil- 
lion dollars,  and  up  to  and  including  ten  million 
dollars ;  and  one  dollar  on  each  fifty  thousand  dol- 
lars of  such  stock  in  excess  of  ten  million  dollars ; 
but  such  tax  shall  not  be  less  than  twenty-five 
dollars  in  any  case.  Whenever  a  corporation  is 
chartered  or  authorized  to  do  business  in  this 
State,  it  shall  pay  the  proportional  part  of  such 
annual  franchise  tax  corresponding  to  the  length 
of  time  before  the  next  following  first  day  of  May, 


600 

and  if  such  tax  is  not  then  paid,  no  such  charter 
shall  be  filed  or  permit  issued.  The  franchise  tax 
herein  provided  for  shall  be  computed  upon  the 
basis  of  the  total  amount  of  the  capital  stock 
issued  and  outstanding,  plus  the  surplus  and  undi- 
vided profits  of  the  corporation,  instead  of  upon 
the  authorized  capital  stock,  whenever  such  total 
amount  is  different  from  the  authorized  capital 
stock. ' ' 

The  tax  must  be  paid  upon  the  whole  of  the  author- 
ized capital  stock  and  not  upon  the  amount  within  the 
State  of  Texas. 

The  tax  must  be  computed  upon  the  basis  of  cap- 
ital stock  issued  and  outstanding,  plus  the  surplus  and 
undivided  profits,  instead  of  upon  the  authorized  cap- 
ital stock,  whenever  such  total  amount  is  different  from 
the  authorized  capital  stock. 


WHETHER  A  RAILROAD   COMPANY   CAN   CHARGE   MORE  FOR  A 
SHORT  THAN  A  LONG  HAUL. 

(W.  0.  King  &  Co.,  April  17,  1905.) 
"We  would  thank  you  to  advise  us  the  address 
of  the  Interstate  Commerce  Commission. 

We  would  also  like  to  know  whether  railroad 
companies  are  allowed  to  charge  more  for  a  short 
than  a  long  haul.  For  instance,  the  rate  from 
Duluth  and  Ashland  to  Chicago  is  lOc  per  hun- 
dredweight. The  rate  from  Couderay,  Wis.,  fifty 
or  sixty  miles  nearer  Chicago  than  Duluth  is  12£c 
and  the  same  from  many  other  points  south  of 
Duluth  range  from  lie  to  12|c  to  Chicago. 

These  rates  certainly  come  within  the  interstate 
commerce  business  and  we  would  like  to  know 
whether  there  is  any  appeal  from  the  present 
rates.  The  railway  companies  are  arbitrary  and 
the  rates  excessive. ' ' 

The  address  of  the  Interstate  Commerce  Commis- 
sion is  Washington,  D.  C.  Communications  addressed 
to  Hon.  E.  A.  Moseley,  secretary  Interstate  Commerce 


601 

Commission,  Washington,  D.  C.,  will  receive  prompt 
attention. 

The  Interstate  Commerce  Act  in  the  long  and  short 
haul  clause  (Sec.  4)  provides  as  follows : 

1 '  That  it  shall  be  unlawful  for  any  common  car- 
rier subject  to  the  provisions  of  this  act  to  charge 
or  receive  any  greater  compensation  in  the  aggre- 
gate for  the  transportation  of  passengers  or  of 
like  kind  of  property,  under  substantially  similar 
circumstances  and  conditions,  for  a  shorter  than 
for  a  longer  distance  over  the  same  line,  in  the 
same  direction,  the  shorter  being  included  within 
the  longer  distance ;  but  this  shall  not  be  construed 
as  authorizing  any  common  carrier  within  the 
terms  of  this  act  to  charge  and  receive  as  great 
compensation  for  a  shorter  as  for  a  longer  dis- 
tance :  Provided,  hoivever,  That  upon  application 
to  the  Commission  appointed  under  the  provisions 
of  this  act,  such  common  carrier  may  in  spe- 
cial cases,  after  investigation  by  the  Commis- 
sion, be  authorized  to  charge  less  for  longer 
than  for  shorter  distances  for  the  transportation 
of  passengers  or  property;  and  the  Commission 
may  from  time  to  time  prescribe  the  extent  to 
which  such  designated  common  carrier  may  be 
relieved  from  the  operation  of  this  section  of  this 
act." 

A  carrier  in  making  a  tariff  rate  may  judge  in  the 
first  instance  as  to  whether,  in  prescribing  a  greater 
charge  for  a  short  than  for  a  long  haul,  the  circum- 
stances and  conditions  are  or  are  not  "substantially 
similar."  It  is  not  obliged  to  seek  an  investigation 
by  the  Interstate  Commerce  Commission  as  to  whether 
circumstances  and  conditions  justify  the  rate.  But 
in  fixing  the  rate  the  carrier  does  so  at  its  peril  sub- 
ject to  liability  under  the  act  if  it  should  be  afterwards 
adjudicated  that  the  charge  so  fixed  is  unlawful. 

Interstate  Commerce  Com.m.  v.  Atcliison,  50 

Fed.,  295. 

In  construing  this  section,  the  United  States  Supreme 
Court  has  laid  down  the  rule  that  competition,  no 


602 

matter  where  it  originates,  and  whether  actual  or 
potential,  creates  a  dissimilarity  of  circumstances  and 
conditions  that  will  justify  the  carrier  in  charging 
more  for  a  short  haul  than  for  a  long  haul  over  its 
line  for  like  merchandise  carried  in  the  same  general 
direction.  If  a  dissimilarity  of  conditions  exists,  the 
question  arises  whether  this  is  so  great  as  to  justify  the 
discrimination  complained  of. 

E.  Tenn.  R.  Co.  v.  Interstate  Com.  Comm.,  181 

U.  S.,  1. 
T.  &  P.  Ry.  Co.  v.  Interst.  Com.  Comm.,  162 

U.  S.,  197. 

Interest.  Com.  Comm.  v.  Alabama  R  R.,  168 
U.  S.,  144. 

And  in  Interstate  Commerce  Commission  v.  L.  &  N. 
R.  Co.,  190  U.  S.,  273,  it  was  held  that  where  a  lower 
rate  is  given  to  a  point  on  the  carrier's  line  as  a  result 
of  competition,  the  making  of  such  rate  does  not  violate 
the  long-and-short  haul  clause. 

In  the  present  instance,  the  carrier  undoubtedly  is 
justified  in  charging  a  lower  rate  from  Duluth  and 
Ashland.  Both  of  these  cities  have  lake  competition 
to  Chicago  as  well  as  rail  competition.  They  are  com- 
petitive points.  An  interior  point,  where  no  competi- 
tion exists  such  as  at  Duluth,  can  not  complain  if  its 
rates  are  higher  than  the  rates  from  Duluth  to  Chicago, 
even  though  such  interior  point  is  nearer  to  Chicago 
than  is  Duluth. 

Furthermore,  lake  competition  is  a  great  leveler  of 
rates  and  must  necessarily  force  the  railroads  to  make 
lower  rates  between  Duluth,  Ashland  and  Chicago  than 
between  points  where  such  water  competition  does  not 
exist. 

I  am  of  the  opinion  that  lower  rates  from  Duluth  and 
Ashland  to  Chicago  than  from  Couderay  are  justifiable 
and  legal.  The  discrimination  must  be  reasonable,  but 
in  the  absence  of  all  the  facts  and  circumstances,  I  can 
express  no  opinion  as  to  whether  the  difference  of  2£c 
per  cwt.  between  the  two  places  is  more  than  is 
warranted. 

Of  course,  an  appeal  lies  to  the  Interstate  Commerce 


603 

Commission,  and  if  the  difference  in  rates  is  unwar- 
ranted, relief  may  be  had. 

IN   REFERENCE   TO   FORM   OF  BILL   OF   LADING   FOR   COMMON 
LAW  LIABILITY. 

(Tonk  Manufacturing  Company,  June  24,  1905.) 

"We  have  read  Mr.  Mayer's  letter  to  you,  out- 
lining his  opinion  as  to  the  stamping  by  carriers 
'Owner's  Bisk'  on  shipping  receipts.  We  send 
you  herewith  original  and  duplicate  of  the  ship- 
ping receipts  we  are  using,  and  will  ask  you  to 
inform  us  as  to  the  advisability  of  eliminating  the 
underscored  portions  of  same. 

We  would  appreciate  hearing  from  you  in  reply 
to  this  letter. ' ' 

The  shipping  receipt  and  order  referred  to  contain 
the  following  clause : 

"Received  from  Tonk  Manufacturing  Company, 
in  good  order,  the  following  goods  described  below, 
to  be  forwarded  without  unnecessary  delay  to  con- 
signee named,  subject  to  the  rules  and  conditions 
printed  on  the  regular  shipping  bills  now  used  loy 
the  company  signing  this  receipt." 
While  I  am  of  the  opinion  that  the  clause  in  italics 
would  probably  not  in  this  State  subject  the  shipper 
to  the  conditions  of  the  bills  of  lading  limiting  the  car- 
rier's liability,  I  suggest  that  in  order  to  avoid  mis- 
understanding with  the  carrier  in  event  of  loss  or  dam- 
age, the  clause  in  question  be  omitted  from  both  the 
shipping  order  and  receipt. 

In  my  opinion  of  March  17,  1905,  in  response  to  an 
inquiry  from  the  F.  H.  Earl  Manufacturing  Com- 
pany, I  discussed  the  question  as  to  the  stamping  by 
the  carriers  of  "Owner's  Risk"  on  the  shipping 
receipts,  and  in  my  various  opinions  in  reference  to  the 
uniform  bill  of  lading,  I  have  stated  that  in  Illinois 
and  a  few  other  States,  express  assent  by  the  shipper 
to  the  conditions  limiting  the  Carrier's  liability  is 
necessary,  in  order  to  enable  the  carrier  to  take  advan- 
tage of  the  conditions. 


604 

In  many  States  mere  notice  is  sufficient. 

In  Dunbar  v.  Charleston  and  W.  &  C.  Ry.  Co.,  62 
S.  C.,  414;  40  S.  E.,  884,  it  was  held  that  a  receipt 
stating  that  the  shipment  is  subject  to  the  bill  of  lading 
of  the  carrier  constitutes  notice  to  the  shipper  of  the 
terms  of  the  contract  of  carriage. 


THE    LIABILITY    OF    A    CONSIGNEE    FOR    DEMURRAGE    OR    CAR 
SERVICE   CHARGES. 

(Reid,  Murdoch  &  Co.,  June  24,  1905.) 
"I  inclose  you  the  correspondence  we  have  had 
with  the  Michigan  Car  Service  Association  in  ref- 
erence    to   their   claim   for   demurrage   at   New 
Buffalo. 

Will  you  kindly  look  into  this  matter  and  see 
what  can  be  done,  and  oblige. ' ' 

Bills  rendered  by  the  Michigan  Car  Service  Asso- 
ciation for  the  Michigan  Central  Railroad  to  Reid, 
Murdoch  &  Co.  for  car  service  to  the  amount  of  $237.00 
on  certain  cars  of  apples  delayed  at  New  Buffalo  Sta- 
tion are  enclosed,  together  with  correspondence  with 
the  manager  of  the  Car  Service  Association  relative 
to  payment  of  the  same. 

In  my  opinion  of  November  14,  1904,  and  January  5, 
1905,  for  W.  0.  King  &  Co.,  and  of  March  22,  1905,  for 
Charles  H.  Mears  &  Co.,  I  discussed  the  subject  of 
demurrage,  to  which  I  refer. 

Sufficient  facts  are  not  presented  to  enable  me  to 
express  a  positive  opinion  as  to  the  liability  of  Reid, 
Murdoch  &  Co.  for  these  demurrage  charges.  This 
liability  may  depend  upon  the  terms  of  the  bill  of  lading 
or  contract  of  shipment,  whether  demurrage  occurred 
at  point  of  shipment  or  at  destination,  or  upon  condi- 
tions surrounding  shipment  or  delivery. 

Assuming  that  car  service  occurred  at  New  Buffalo, 
through  failure  of  the  consignee  to  unload  the  cars 
within  forty-eisrht  hours  after  delivery  to  him,  as  pro- 
vided by  the  Car  Service  Rules,  I  am  of  the  opinion 
that  the  consignee  would  be  liable  for  the  charges. 


605 

Circumstances,  however,  might  be  such  that  the  con- 
signee would  not  be  liable,  as  improper  or  faulty  deliv- 
ery by  the  carrier,  etc.  On  the  other  hand,  if  the  car 
service  accrues  at  point  of  shipment,  a  different  ques- 
tion arises  as  to  the  liability  of  the  consignee  for  these 
charges.  If  the  bill  of  lading  provides  (as  did  the 
Uniform  Bill  of  Lading)  that  the  carrier  may  make  a 
reasonable  charge  for  detention  of  the  car  for  loading 
or  unloading,  the  consignee  may  be  bound  by  the  terms 
of  the  bill  of  lading  and  liable  for  car  service  at  point 
of  shipment,  as  the  consignor  may  be  the  agent  of  the 
consignee  and  bound  by  the  bill  of  lading  issued  to  the 
consignor. 

Scarf e  v.  Tobin,  I  L.  J.  K.  B.,  183,  184. 

And  where  a  common  carrier,  upon  delivery  of  goods 

at   destination,    waives    its    lien    for    unpaid    freight 

charges,  and  permits  the  consignee,  who  has  knowledge 

of  the  fact  that  charges  to  a  certain  amount  remain 

unpaid,  and  that  the  carrier  is  giving  up  a  lien  thereon 

for  his  benefit,  to  accept  the  goods  and  to  remove  them, 

such  acceptance  and  removal  are  evidence  from  which 

to  imply  an  agreement  on  the  part  of  the  consignee 

to  pay  to  the  carrier  the  known  amount  of  the  charges. 

Cent.  R.  R.  Co.  v.  MacCartney,  68  N.  J.  L., 

165;  s.  c.  52  At!.,  575,  577. 

THE  LIABILITY  OF  AN  INITIAL  CARRIES  FOR  THE  ACTS  OF  A 
CONNECTING  CARRIER  IN  DELIVERING  GOODS  WITHOUT  THE 
PRODUCTION  OF  THE  BILL  OF  LADING  WHERE  GOODS  ARE 
SHIPPED  TO  ORDER  OF  CONSIGNOR  WITH  SIGHT  DRAFT 
ATTACHED  TO  BILL  OF  LADING. 

(Francis  Beidler  Company,  June  24,  1905.) 

"As  members  of  your  association  we  wish  to  be, 
advised  relative  to  the  liability  of  carriers  when 
accepting  a  shipment  which,  on  account  of  doubt- 
ful rating  of  customer,  is  shipped  to  the  order  of 
consignor  with  bill  of  lading  and  sight  draft 
attached. 

The  case  we  refer  to  is  a  shipment  made  from 
our  southern  mill,  this  car  originating  on  the  rails 


606 

of  the  Atlantic  Coast  Line,  and  they  issued  bill  of 
lading,  in  which  we  were  shown  both  as  consignor 
and  consignee.  This  shipment,  however,  is  des- 
tined to  a  point  beyond  their  rails,  and  it  seems 
that  when  this  car  reached  its  destination  the  agent 
of  the  delivering  line  surrendered  car  to  our  cus- 
tomer, regardless  of  the  fact  that  the  car  was 
billed  to  ourselves  and  could  only  be  delivered 
upon  surrender  of  bill  of  lading  or  making  pay- 
ment of  a  sight  draft. 

We  have  been  unable  to  secure  any  satisfaction 
whatever  as  the  initial  line  disclaims  any  respon- 
sibility. To  what  extent  is  the  initial  line  liable 
for  its  immediate  connections?  Can  we  not  hold 
them  to  pay  for  this  car,  or  is  it  incumbent  upon 
us  to  look  to  the  delivering  line  for  adjustment  of 
our  claim?  The  party  who  received  this  lumber 
is  not  a  responsible  person,  and  he  has  declined  to 
make  payment  for  this  car." 

Where  the  consignor  ships  goods  by  railroad  and 
attaches  a  sight  draft  to  the  bill  of  lading,  this  evi- 
dences an  intention  on  the  part  of  the  consignor  to 
reserve  the  title  in  himself  until  the  payment  of  the 
draft.  The  carrier,  in  such  a  case,  is  not  authorized 
to  deliver  the  freight  to  the  consignee  without  the  sur- 
render of  the  bill  of  lading,  and  if  it  does  so  it  is  liable 
for  the  value  of  the  goods  to  the  consignor.  In  the 
case  presented,  therefore,  the  connecting  carrier  which 
makes  the  delivery  is  directly  liable  to  the  consignor. 
Whether  the  initial  carrier  is  liable  presents  a  more 
difficult  question.  In  my  opinion  of  this  date,  in 
response  to  an  inquiry  from  the  United  States  Pharma- 
cal  Company,  I  discussed  the  liability  of  initial  car- 
riers for  the  defaults  of  connecting  carriers,  to  which 
opinion  I  refer.  As  will  be  seen  from  that  opinion,  the 
liability  of  the  initial  carrier  for  the  defaults  of  the 
connecting  carrier  depends  upon  the  conditions  of  the 
bill  of  lading  constituting  the  contract  of  transporta- 
tion, or  the  particular  circumstances  of  the  case,  or 
the  law  of  the  State  where  the  contract  of  transporta- 
tion was  entered  into. 


607 

I  can  not  express  a  positive  opinion  without  further 
information  as  to  the  terms  of  the  bill  of  lading  and 
the  points  of  origin  and  destination  of  the  shipment  in 
question.  In  any  event,  recourse  may  be  had  against 
the  connecting  carrier  in  default. 


IN  REFERENCE  TO  THE  FOREIGN  CORPORATION  LAW  OF  WIS- 
CONSIN AND  THE  NECESSITY  OF  COMPLIANCE  THERE- 
WITH. 

(B.  P.  Smith  &  Sons  Company,  June  24,  1905.) 

"We  inclose  herewith  a  communication  which 
we  received  this  morning.  We  suppose  you  have 
received  others  like  this  and  they  have  been  passed 
upon.  Will  you  please  write  us  in  regard  to  the 
subject,  and  oblige." 

The  enclosure  referred  to  is  a  communication  from 
a  law  firm  of  Madison,  Wis.,  stating : 

"Inclosed  you  will  please  find  copy  of  statement 
being  sent  by  the  secretary  of  State  to  all  foreign 
corporations. 

"We  understand  that  the  provision  of  the  law 
will  be  strictly  enforced  hereafter.  All  foreign 
corporations  not  having  filed  certified  copies  of 
their  articles  should  do  so  at  once,  as  neglect  to  do 
so  is  disastrous  to  the  corporation  in  case  of  liti- 
gation within  the  State. ' ' 

This  question  is  fully  covered  in  my  opinion  of 
March  17,  1905,  in  response  to  a  query  from  The  John 
Davis  Company. 

Since  writing  the  foregoing  opinion,  the  Supreme 
Court  of  Wisconsin  in  March,  1905,  has  handed  down 
a  decision  in  reference  to  the  foreign  corporation  laws 
of  Wisconsin,  in  the  case  of  Greek-American  Sponge 
Co.  v.  RichardsonDrug  Co.,  102  N.  W.,  888,  which  fully 
confirms  the  conclusions  of  my  former  opinion.  The 
court  there  said : 

"The  facts  before  us  show  a  course  of  dealing 
wherein  a  foreign  corporation,  as  a  dealer,  has 
undertaken  to  enforce  payment  for  goods  which 


608 

were  transported  to  this  State,  delivered  and  ac- 
cepted by  a  purchaser,  under  an  agreement  made 
in  this  State  providing  that  when  the  goods  were 
delivered  to  the  purchaser  they  might  be  rejected 
if  not  satisfactory.  It  is  unquestioned  in  this  case 
that  respondent  was  engaged  in  interstate  com- 
merce while  transporting  the  goods  from  Chicago, 
111.,  to  Milwaukee,  Wis.,  but  it  is  urged  that  sub- 
sequent to  their  arrival  in  Milwaukee  and  before 
their  delivery  to  defendant  they  ceased  to  be  an 
article  of  interstate  commerce  coming  under  the 
clause  of  the  federal  constitution,  and,  therefore, 
the  provisions  of  section  1770b,  Eev.  Stat.  1898, 
applied  to  the  transaction  had  concerning  them  in 
Milwaukee,  which  resulted  in  a  consummation  of 
the  sale,  and  that  this  renders  the  contract  of  sale 
non-enforceable  by  the  plaintiff." 

And  held: 

''It  must  be  held  that  the  contract  of  sale  sought 
to  be  enforced  by  the  respondent  pertained  to  the 
sale  of  a  lawful  article  of  commerce  in  its  original 
package,  while  it  was  an  article  of  interstate  com- 
merce. Under  these  circumstances  the  contract 
is  exempted  from  the  provisions  of  section  1770b, 
and  plaintiff  is  not  precluded  from  enforcing  it, 
though,  as  a  foreign  corporation,  it  has  failed  to 
comply  with  the  requirements  of  this  law.  The 
right  of  the  State  to  prescribe  the  conditions  upon 
which  foreign  corporations  may  carry  on  business 
within  the  State  is  undisputed  and  stands  ap- 
proved by  the  courts.  When,  however,  such  regu- 
lation imposes  conditions  which  restrict  them  in 
their  rights,  as  foreign  corporations,  to  make  con- 
tracts pertaining  to  commerce  between  the  States, 
then  such  legislation  is  an  invasion  of  their  con- 
stitutional right  under  the  provision  which  con- 
fers upon  Congress  the  power  to  regulate  such 
commerce,  and  such  legislation  is  invalid  to  that 
extent. ' ' 

If  the  method  of  doing  business  in  Wisconsin  is  as 
outlined  in  my  former  opinion,  a  foreign  corporation 


609 

need  not  comply  with  the  foreign  corporation  laws  of 
Wisconsin.  However,  as  the  facts  are  not  before  me 
as  to  the  method  of  doing  business  employed  by  the 
E.  P.  Smith  &  Sons  Company,  I  can  express  no  opin- 
ion in  their  particular  case. 

NOTE: — See,  also,  the  later  Wisconsin  cases  of  Allen  v.  Milwaukee, 
106  N.  W.,  1099  (Wis.,  1906)  ;  and  Catlin  #  Powell  v.  Schuppert,  110 
N.  W.,  818  (Wis.,  1907).— Ed. 


WHETHER  THE  INITIAL  CAREIEE  IS  LIABLE  FOR  THE  DE- 
FAULTS OF  CONNECTING  CARRIERS  IN  THE  TRANSPORTA- 
TION OF  FREIGHT  AND  BAGGAGE. 

(United  States  Pharmacal  Company,  June  24,  1905.) 
"As  shippers  we  have  met  with  loss  on  several 
occasions,  both  in  the  way  of  baggage  and  freight, 
on  which  we  have  not  been  able  to  collect  from 
the  railways,  owing  to  the  fact  that  the  freight 
and  baggage  passed  through  two  or  more  lines, 
and  each  railway  repudiated  responsibility,  leav- 
ing the  burden  on  our  shoulders.  We  would  like 
to  know  if  there  is  any  way  by  which  we  could 
reach  one  of  two  or  more  roads  in  traveling  over 
two  or  more  States  where  baggage  has  been  lost 
in  transit,  likewise  where  freight  has  been  dam- 
aged or  robbed  in  transit.  To  state  a  specific 
point:  A  person  traveling  from  Michigan  to  St. 
Louis  was  there  joined  by  a  second  party  and 
together  they  traveled  to  Arizona  over  four  lines 
of  railways.  Somewhere  between  St.  Louis  and 
Arizona  their  baggage  was  opened  and  robbed, 
some  $15  to  $20  worth  of  new  clothing  being  re- 
moved. Application  to  several  railways  in  each 
case  answered  that  the  theft  did  not  occur  on  their 
line,  and  leaving  us  unable  to  prove,  beyond  the 
fact  that  the  theft  had  been  committed,  on  which 
of  the  roads  it  occurred.  Is  there  any  law  which 
would  enable  us  to  bring  suit  against  one,  and  if 
so,  which  road!  The  States  through  which  the 
baggage  traversed  were  Missouri,  Arkansas, 

\ 


610 

Texas  and  the  Territory  of  Arizona,  similarly  in 
the  case  of  freight.  What  action  could  we  take!" 
In  my  opinion  of  October  30,  1903,  in  response  to  an 
inquiry  from  the  Austin  Manufacturing  Company,  I 
discussed  the  liability  of  an  initial  carrier  for  the  neg- 
ligence of  connecting  carriers,  to  which  opinion  I  refer. 
It  frequently  becomes  difficult  to  determine  whether, 
under  the  circumstances  of  a  particular  case  the  initial 
carrier  is  liable  for  the  safety  of  goods  throughout  the 
whole  course  of  transit  over  connecting  lines,  or  only 
to  the  terminus  of  its  own  line.  At  common  law  a  car- 
rier is  not  bound  to  transport  freight  beyond  its  own 
line.  But  it  is  well  settled  that  a  carrier  may  specially 
contract  to  carry  freight  beyond  the  termini  of  its 
own  line  so  as  to  become  liable  for  its  safe  delivery 
at  the  ultimate  destination,  and  such  liability  con- 
tinues throughout  the  entire  transit. 

When  the  carrier  thus  undertakes  to  carry  freight 
through  to  its  destination,  all  connecting  lines  partici- 
pating in  such  transportation  become  its  agents  for 
whose  default  it  is  responsible  to  the  owner  of  the 
goods. 

Hutchinson  on  Carriers  (2d  Ed.),  Sec.  145. 
It  is  difficult  to  determine  what  is  sufficient  to  con- 
stitute a  contract  on  the  part  of  the  carrier  to  carry 
the  goods  to  the  destination  beyond  its  own  line. 

The  courts  in  this  country  are  at  variance  in  their 
holdings  as  to  such  liability.  In  many  States  it  is  the 
established  law  that  where  the  carrier  accepts  goods 
for  carriage,  directed  to  a  point  beyond  its  own  route, 
it  assumes  by  the  very  act  of  acceptance,  in  the  ab- 
sence of  any  express  contract  to  the  contrary,  the  ob- 
ligation to  transport  the  goods  to  the  final  destination. 
In  such  a  case  the  responsibility  rests  upon  the  initial 
carrier  until  the  end  of  the  transit,  and  this  is  the  rule 
in  Illinois. 

I.  C.  R.  R.  Co.  v.  Frankenberg,  54  111.,  88. 

R.  R.  Co.  v.  Copeland,  24  111.,  332. 

R.  R.  Co.  v.  Johnson,  34  111.,  389. 

R.  R.  Co.  v.  People,  56  111.,  365. 

Adams  Exp.  Co.  v.  Wilson,  81  111.,  339. 


611 

St.  L.  S.  W.  Ry.  Co.  v.  Elgin  Milk  Co.,  175  111., 
557. 

R.  R.  v.  Jagqerman,  115  111.,  407. 

Lock  Co.  v.  fl.  R.,  48  N.  H.,  339. 

Beard  v.  R.  R.,  79  la.,  527. 

R.  R.  v.  Campbell,  36  Ohio  St.,  647. 

Transp.  Co.  v.  £Zocft,  86  Term.,  393. 

Pereira  v.  £.  R.,  66  Cal.,  92. 

Muschamp  v.  £.  #.  Co.,  8  M.  &  W.,  421. 

6  Am.  &  Eng.  Enc.  Law  (2d  Ed.),  611. 

E.  J.  &  E.  Ry.  v.  Bates,  200  111.,  636. 
The  reason  of  the  rule  is  well  stated  in  /.  C.  R.  R. 
Co.  v.  Frankenberg,  54  111.,  88,  98 : 

' '  Now,  on  the  point  of  public  convenience,  which 
consideration  had  great  weight  with  us  in  deter- 
mining which  rule  should  be  adopted,  it  seems  to 
us  that  consignors  of  the  productions  of  our  coun- 
try, or  other  property,  by  railroad,  should  not  be 
required,  in  case  of  loss  or  damage,  to  look  for  re- 
muneration to  any  other  party  than  the  one  to 
which  they  delivered  the  goods.  It  would  be  a 
great  hardship,  indeed,  to  compel  the  consignor 
of  a  few  barrels  of  flour,  delivered  to  a  railroad 
in  this  State,  marked  to  New  York  City,  and  which 
are  lost  in  the  transit,  to  go  to  New  York  or  to  the 
intermediate  lines  of  road  and  spend  days  and 
weeks,  perhaps,  in  endeavors  to  find  out  on  what 
particular  road  the  loss  happened,  and  having  as- 
certained it,  in  the  event  of  a  refusal  to  adjust  the 
loss,  to  bring  a  suit  in  the  courts  of  New  York  for 
his  damages.  Far  more  just  would  it  be  to  hold 
the  company  who  received  the  goods  in  the  first 
instance  as  to  the  responsible  party,  and  the  inter- 
mediate roads,  its  agents,  to  carry  and  deliver, 
and  it  is  the  most  reasonable  and  just,  for  all  rail- 
roads have  facilities  not  possessed  by  a  consignor 
of  tracing  losses  of  property  conveyed  by  them, 
and  all  have,  or  can  have  running  connections  with 
each  other.  Above  all,  when  it  is  considered  the 
receiving  company  can,  at  the  outset,  relieve  itself 
from  its  common  law  liability  by  a  special  and 


612 

definite  agreement,  such  a  rule  can  not  prejudice 
them.  The  rule  being  known,  all  parties  can  read- 
ily accommodate  their  business  to  it  and  no  incon- 
venience can  result  to  any  one  from  its  opera- 
tion." 

But  the  greater  number  of  States  hold  the  initial 
carrier  liable  only  for  losses  on  its  own  line,  unless 
there  is  an  express  contract  to  the  contrary. 

Hutchinson  on  Carriers  (2d  Ed.),  Sec.  149. 

6  Am.  &  Eng.  Enc.  Law  (2d  Ed.),  615. 

Detroit  v.  R.  R.  Co.,  43  Mich.,  609. 

Hope  v.  R.  R.  Co.,  69  N.  W.,  487  (Mich.). 

Myrick  v.  Mich.  Cent.  R.  R.  Co.,  107  U.  S.,  248. 

Nutting  v.  R.  R.  Co.,  I  Gray,  502. 

C.  &  0.  R.  Co.  v.  Stock,  51  S.  E.,  161  ( Va.,  June 

15,  1905). 

The  issuing  of  a  through  bill  of  lading  would  con- 
stitute an  express  contract  and  the  initial  carrier  would 
be  liable. 

Statutes  in  several  States  make  a  carrier  respon- 
sible for  the  negligence  of  succeeding  carriers.  Such 
a  statute  exists  in  Missouri  (Rev.  St.  1899,  Sec.  5222). 
It  has  been  there  held,  however,  that  the  initial  carrier 
may  by  express  contract  limit  its  liability  to  loss  or 
damage  occurring  on  its  own  line,  if  it  agrees  to  carry 
only  to  the  end  of  its  own  line. 

Dimmitt  v.  R.  R.,  103  Mo.,  433. 
Hill  v.  R.  R.  Co.,  46  Mo.  App.,  520. 
But  if  a  through  bill  of  lading  is  issued,  in  Missouri, 
the  initial  carrier  is  liable  for  the  negligence  of  sue- 
ceedinjr  carriers. 

Grain  Co.  v.  R.  R.,  176  Mo.,  480,  75  S.  W.,  638 

(1905). 

Liability  beyond  the  terminus  of  the  carrier's  line 
may  be  excluded  by  contract,  and  limitations  of  this 
nature  are  found  in  nearly  all  the  present  bills  of 
lading.  They  will  ordinarily  be  enforced  under  the 
same  circumstances  that  any  other  contract  would  be 
enforced.  But  in  those  States  where  acceptance  of 
goods  directed  to  a  point  beyond  its  own  line  renders 
the  carrier  responsible  for  the  entire  transit,  the  ship- 


613 

per  must  assent  to  the  terms  limiting  the  liability  to 
its  own  line,  and  in  Illinois  and  several  other  States 
an  express  assent  is  necessary. 

It  was  held  in  I.  C.  R.  R.  v.  Carter,  165  111.,  570 
(1897),  that  while  a  carrier  may  refuse  to  assume  the 
responsibility  of  a  through  carrier,  and  by  contract 
with  the  shipper  may  restrict  its  liability  to  its  own 
line,  yet  it  can  not  do  so  by  a  mere  stipulation  in  a 
bill  of  lading  not  signed  by  the  shipper,  without  proof 
that  the  shipper  accepted  the  same  and  consented  to 
the  restriction. 

On  the  other  hand,  even  if  there  is  a  contract  for 
through  carriage,  the  intermediate  carrier  who  caused 
the  injury  may  be  held  liable. 

C.  &  N.  W.  R.  Co.  v.  The  Packet  Co.,  70  111., 

218. 

R.  R.  v.  Tisdale,  74  Tex.,  8. 
Barter  v.  Wheeler,  49  N.  H.,  9. 

And  it  has  been  held  that  where  a  partnership  as- 
sociation exists  between  several  railroads,  any  one  or 
all  may  be  held  liable,  unless  exempted  by  contract. 

Block  v.  Fitchburg  R.  R.  Co.,  139  Mass.,  308. 
(Erie  &  North  Shore  Despatch  Fast  Freight 
Line.) 

As  to  baggage,  the  liability  of  a  carrier  is  that  of  an 
insurer.  Its  liability  is  ordinarily  the  same  as  in  the 
carriage  of  freight,  and  is  governed  largely  by  the 
same  rules. 

The  carriage  of  baggage  being  a  mere  incident  to 
the  carriage  of  the  passengers  a  through  contract  as 
to  the  passenger  will  be  a  through  contract  as  to  bag- 
gage. 

Hutchinson  on  Carriers  (2d  Ed.),  Sec.  715. 
The  usual  baggage  check  delivered  to  a  passenger 
upon  receiving  his  baggage  is  a  receipt  merely  in- 
tended to  afford  evidence  of  ownership  and  identifica- 
tion ;  and  in  no  sense  embodies  the  contract  of  car- 
riage between  the  passenger  and  the  carrier. 

3  Am.  &  Eng.  Enc.  Law  (2d  Ed.),  580. 
Isaacson  v.  N.  Y.  Cent.  R.  R.  Co.,  94  N.  Y., 
278. 


614 

The  initial  carrier  of  baggage  may  contract  to  be 
liable  for  the  entire  route,  or  restrict  its  liability  to 
losses  on  its  own  line. 

In  a  number  of  States,  where  baggage  is  checked 
through  under  a  through  ticket  the  carrier  is  held  to 
insure  the  safe  delivery  at  destination  and  is  liable 
for  injuries  to  such  baggage  whenever  occurring. 

3  Am.  &  Eng.  Encl.  Law  (2d  Ed.),  573. 

/.  C.  R.  R.  Co.  v.  Copeland,  24  111.,  332. 

Hawley  v.  Screven,  62  da.,  347. 

Western  Sash  Co.  v.  R.  R.,  177  Mo.,  641;  76 

S.  W.,  998. 

But  in  other  and  perhaps  the  larger  number  of 
States,  the  initial  carrier  is  held  liable  only  for  losses 
on  its  own  line,  or  through  its  failure  to  make  proper 
delivery  to  connecting  lines. 

3  Am.  &  Eng.  Enc.  Law  (2d  Ed.),  576. 

Mich.  Cent.  R.  Co.  v.  Manfg.  Co.,  16  Wall., 

318. 

In  a  late  case  in  Missouri  it  was  held  that  a  carrier 
which  agrees  to  transport  a  passenger  and  her  bag- 
gage to  destination  is,  in  the  absence  of  a  special  agree- 
ment limiting  its  responsibility,  liable  throughout  the 
journey  for  the  loss  of  the  baggage  by  itself  or  by  any 
other  carrier  which  assists  in  performing  the  contract. 

Hubbard  v.  M.  &  0.  Ry.  Co.,  87  S.  W.,  52  (Mo., 

May  2,  1905). 

In  the  specific  case  mentioned,  sufficient  informa- 
tion is  not  furnished  to  enable  me  to  express  a  definite 
conclusion.  The  liability  would  be  governed  by  the 
laws  of  the  State  where  the  contract  of  transportation 
was  entered  into.  A  different  situation  would  exist  if 
the  passage  from  Michigan  to  Arizona  was  under  a 
through  contract  that  if  tickets  were  purchased  at  St. 
Louis,  or  at  other  points.  Furthermore,  the  condi- 
tions of  the  contract  of  transportation  would  affect 
the  liability.  If  the  tickets  were  purchased  at  S.  Louis 
and  provided  for  through  transportation,  and  the  con- 
tract did  not  limit  liability  to  the  initial  carrier's  own 
line,  I  am  of  the  opinion  that  under  the  laws  of  Mis- 
souri the  initial  carrier,  by  accepting  the  baggage, 


615 

would  be  liable  for  the  safe  transportation  to  the  desti- 
nation. 


NOTE: — See  opinion  of  July  20,  1906  (A.  L.  Goetzmann),  in  ref- 
erence to  the  liability  of  initial  and  connecting  carriers,  setting  out  the 
statutes  of  the  various  states  relative  thereto.  The  Interstate  Com- 
merce Act  as  amended  in  1906  (sec.  20)  now  makes  the  initial  car- 
rier liable  for  the  negligence  of  connecting  carriers. — Ed. 


THE  LIABILITY  OF  A  COMMON  CARRIER  FOR  DELAY  IN  DELIV- 
ERY OF  SHIPMENTS  AND  THE  MEASURE  OF  DAMAGES 
THEREFOR. 

(Joseph  T.  Ryerson  &  Son,  June  26,  1905.) 
1  'On  February  12, 1902,  one  of  our  mills  shipped 
from  Youngstown,  Ohio,  to  a  galvanizing  company 
at  Chicago  one  car  of  angles  for  one  of  our  cus- 
tomers located  at  Elgin,  111.  Our  customer  had  a 
contract  with  the  galvanizing  company  for  galvan- 
izing, and  the  carload  rate  of  freight  from  Chi- 
cago at  that  time  being  five  cents  and  the  L.  C.  L. 
eight  cents,  as  material  was  sold  by  us  f.  o.  b.  Chi- 
cago, the  cost  of  material  to  our  customer  would 
be  their  Chicago  price,  plus  the  galvanizing  and 
five  cents  per  100  pounds  freight,  which  would 
make  their  cost  at  Elgin  $2.40. 

The  railroad  company  brought  the  cars  to  Chi- 
cago, and  through  some  error  of  theirs  transferred 
the  material  to  another  car  and  returned  same  to 
Youngstown.  In  tracing  we  were  unable  for  a 
considerable  time  to  locate  material  or  get  any 
satisfaction  from  the  railroad  company.  Our  cus- 
tomer, on  account  of  the  delay,  was  compelled  at 
various  times  to  purchase  galvanized  angles  out 
of  Chicago  stock,  prices  ranging  from  $2.70  to 
$2.75  Chicago,  which,  plus  freight  charges,  caused 
them  a  loss  of  $228.28  over  what  they  would  have 
been  compelled  to  pay  had  the  car  been  delivered 
to  the  galvanizing  people  in  a  reasonable  time. 
Our  customer  charges  us  with  this  amount,  and 
we  filed  claim  against  the  railroad  company.  They 
held  claim  two  and  one-half  years,  during  which 


616 

time  we  traced,  but  could  secure  no  reply.  They 
now  return  the  claim  to  us,  advising  that  inas- 
much as  the  price  of  angle  iron  advanced  one-half 
cent  per  pound  between  the  time  the  property 
should  have  been  delivered  to  the  galvanizing  com- 
pany and  the  time  it  was  turned  over  to  them,  and 
as  we  billed  against  them  for  value  of  the  galvan- 
ized iron,  they  are  unable  to  figure  out  that  we 
suffer  any  by  reason  of  the  delay,  or  that  they  are 
indebted  to  us  for  any  amount. 

Inasmuch  as  we  had  contract  with  the  mill  for 
a  large  tonnage,  and  as  our  customer  had  a  con- 
tract with  us  for  312  tons,  the  advance  in  price 
during  the  time  the  car  was  out  could  in  no  way 
benefit  either  of  us. 

Will  you  kindly  advise  what  the  measure  of  dam- 
ages should  be  in  this  case,  and  if  we  can  hold  the 
railroad  company  for  the  full  value  of  this  claim  ? ' ' 
In  my  opinion  of  October  28,  1902,  in  response  to  an 
inquiry  from  F.  T.  Bentley,  chairman  of  the  traffic 
committee,  I  discussed  the  liability  of  a  carrier  for 
damages  for  delay  in  transportation. 

In  general,  where  there  is  a  delay  for  which  the  car- 
rier is  liable,  the  measure  of  damages  is  the  difference 
between  the  market  value  of  the  property  at  the  time 
and  place  at  which  delivery  should  have  been  made 
and  the  value  when  actually  made,  whether  the  differ- 
ence in  value  was  the  result  of  a  decline  in  the  market 
or  of  an  injury  suffered  by  the  goods  in  consequence 
of  the  delayed  delivery. 

R.  R.  Co.  v.  Dickinson,  74  111.,  249. 
R.  R.  Co.  v.  McClellan,  54  111.,  56. 
Devereus  v.  Buckley,  34  Ohio  St.,  16. 
Hutchinson  on  Carriers  (2d  Ed.),  Sec.  775. 
5  Am.  &  Eng.  Ency.  Law  (2d  Ed.),  384. 
The  carrier  will  not  be  liable  for  profits  lost  by  rea- 
son of  failure  to  perform  a  special  contract,  or  on 
account  of  other  special  circumstances  not  apparent 
from  the  transaction  itself,  unless  he  has  notice  of  the 
special  contract.    If  the  carrier  is  not  informed  of  the 
contract,  or  its  terms,  sufficiently  to  know  that  unusual 


617 

loss  would  result  from  a  delay,  the  measure  of  dam- 
ages must  be  determined  according  to  the  general  rule. 

6  Cyc.  Law,  450. 

5  Am.  &  Eng.  Enc.  (2d  Ed.),  395. 

Am.  Express   Co.  v.   Jennings,  38   So.,   374 

(Miss.,  May  15,  1905). 

Where  goods  have  been  transported  by  the  carrier 
with  knowledge  of  the  special  contract  between  con- 
signor and  consignee,  the  contract  price  furnishes  the 
measure  of  damages. 

I.  C.  R.  R.  v.  Cobb,  64  111.,  143. 

And  in  an  action  to  recover  damages  for  delay,  the 
owner  may  recover  for  any  reasonable  expense  to 
which  he  has  been  put  by  the  delay. 

Hutchinson  on'Carriers  (2d  Ed),  Sec.  328. 

5  Am.  &  Eng.  Enc.  (2d  Ed.),  386. 
Thus  it  has  been  held  that  as  part  of  the  damages, 
the  expense  incurred  in  a  necessary  search  for  the 
goods  delayed  may  be  recovered. 

R.  R.  v.  Pritchard,  77  Ga.,  412. 

Legal  interest  on  the  value  of  the  goods  has  usually 
been  considered  a  proper  element  of  damages  to  be 
computed  from  the  time  when  the  goods  should  have 
arrived,  or  demand  has  been  made. 

I.  C.  R.  R.  v.  Haynes,  64  Miss.,  604;  1  So.,  765. 

Dunn  v.  R.  R.  Co.,  68  Mo.,  268. 

Gulf  R.  Co.  v.  Lee,  65  S.  W.,  54. 

Houston  v.  Jackson,  62  Tex.,  209. 

R.  R.  Co.  v.  Truskett,  104  Fed.,  728. 

Wolfe  v.  Lacey,  30  Tex.,  349. 

5  Am.  &  Eng.  Enc.  (2d  Ed.),  379. 
But  the  contrary  has  been  held  in  Illinois. 

I.  C.  R.  R.  Co.  v.  Cobb,  72  111.,  148. 
The  general  rule  is  that  a  carrier  can  not  limit  its 
liability  for  delay  except  by  a  special  contract  with  the 
shipper,  and  that  in  no  event  can  it  limit  its  liability 
for  delay  resulting  from  its  own  negligence.  And  in 
Ohio  and  Illinois  there  must  be  an  express  assent  to 
the  limitation  on  the  part  of  the  shipper;  assent  can 
not  be  implied  from  mere  acceptance  of  the  receipt  or 
bill  of  lading  containing  the  limitation. 


618 

5  Am.  &  Eng.  Enc.  (2d  Ed.),  258. 

R.  R.  Co.  v.  Barnett,  36  Ohio  St.,  448. 

Gaines  v.  Union  Transp.  Co.,  28  Ohio  St.,  418. 

In  the  case  stated  the  measure  of  damages  for  the 
negligent  delay  in  delivering  the  goods  would  be  the 
difference  between  the  market  value  at  the  time  that 
delivery  should  have  been  made  and  when  actually 
made. 

Theoretically,  at  least,  I  don't  see  how  the  increase 
in  price  ''could  in  no  way  benefit  either  of  us."  The 
Elgin  party  having  bought  the  angles  in  the  Chicago 
market  at  the  advanced  price,  to  that  extent  Eyerson 
&  Son's  supply  was  increased,  and  their  supply  satis- 
fied, and  as  the  market  value  increased  it  would  appear 
as  though  Eyerson  &  Son  directly  or  indirectly  received 
the  benefit  of  such  increase. 

It  does  not  appear  that  the  carrier  had  notice  of  any 
special  contract,  and  in  such  event,  as  the  market  value 
increased,  the  carrier  would  ordinarily  not  be  liable. 
The  carrier  is  responsible  for  the  expenses  reasonably 
incurred  in  the  necessary  search  for  the  goods. 

IN  REFERENCE  TO  SUPPLY  HOUSE  PIRATING  PARTS  AND  USING 
WITHOUT  RIGHT  BRANDS  OR  MARKS  BELONGING  TO  THE 
MAKER  OF  ARTICLES,  AND  THE  REDRESS  THEREFOR,  AND 
AS  TO  WHETHER  REPAIRED  GOODS  OR  RECONSTRUCTED 
ARTICLES  CAN  BE  SOLD  UNDER  THEIR  ORIGINAL  TRADE- 
MARK. 

(Parlin  &  Orendorff  Company,  June  29,  1905.) 

' '  The  plow  manufacturers,  as  well  as  other  manu- 
facturers, have  in  the  past  experienced  much  diffi- 
culty on  account  of  the  supply  houses  pirating  parts. 
Will  you  have  the  kindness  to  ask  your  attorney, 
Mr.  Mayer,  what  the  law  is  bearing  on  this  subject? 
For  instance,  we  may  have  a  certain  style  share, 
branded  with  a  certain  number  and  with  our  name. 
Is  there  not  some  penalty  for  parties  pirating  these 
parts  and  using  our  brand?  Please  get  his  opinion 
and  have  the  kindness  to  advise  me." 
A  manufacturer  can  not  lawfully  stamp  upon  or 


619 

attach  to  his  goods  the  name  of  another  manufacturer. 

Goodyear  Rubber  Co.  v.  Day,  22  Fed.,  44. 
In  Drake  Medicine  Co.  v.  Glesner,  68  Ohio  St.,  337; 
67  N.  E.,  722  (1903),  it  was  held  that  where  a  person 
has  established  a  business  and  reputation  for  an  article 
of  traffic,  under  a  particular  name  and  label,  whether 
the  words  constitute  a  trademark  or  not,  another  per- 
son, whether  it  be  his  own  name  or  not,  can  not  lawfully 
assume  the  same,  with  slight  alterations,  so  as  to  induce 
the  belief  that  his  imitation  is  original. 

In  Southern  White  Lead  Co.  v.  Gary,  25  Fed.,  125, 
126,  it  was  said : 

"The  defendants  so  brand  the  heads  of  their 
kegs  as  to  naturally  mislead  and  induce  persons 
purchasing  for  consumption  to  suppose  they  are 
purchasing  the  complainant's  lead  when  they  are 
getting  an  inferior  article.  The  brand  used  by  the 
defendants  is  so  like  the  complainant's  as  to  induce 
the  public  to  mistake  the  one  for  the  other. 
The  defendants  sell  their  goods  to  retail  dealers, 
and  it  may  be  that  such  dealers  are  not  deceived, 
but  they  sell  to  consumers  who  are  or  may  be  de- 
ceived. The  complainant  is  entitled  to  relief  if  the 
brand  used  by  the  defendants  sufficiently  re- 
sembles the  complainant's  brand  to  be  mistaken 
for  it,  and  the  defendants  adopted  their  brand  for 
the  purpose  of  selling  their  kegs  as  the  kegs  of  the 
complainant,  or  for  the  purpose  of  enabling  retail 
dealers  to  do  so,  and  the  complainant  has  been  in- 
jured by  this  fraud,  or  is  likely  to  be  injured  by 
it." 

In  Vitascope  Co.  v.  U.  S.  Phonograph  Co.,  83  Fed., 
30,  32,  it  was  said  that  the  grounds  on  which  unfair 
competition  in  trade  will  be  enjoined  are  either  that 
the  means  used  are  dishonest,  or  that,  by  false  repre- 
sentation or  imitation  of  name  or  device,  there  is  a 
tendency  to  create  confusion  in  the  trade,  and  work  a 
fraud  upon  the  public  by  inducing  it  to  accept  a 
spurious  article. 

In  Laivrence  Mfg.  Co.  v.  Tennessee  Mfg.  Co.,  138 
U.  S.,  537-549,  the  court  said : 


620 

"In  cases  of  unfair  competition,  fraudulent  in- 
tent  upon   the   part   of   the   defendant   must   be 
proven. ' ' 
In  28  Am.  Enc.  Law  (2d  Ed.),  433,  it  is  said: 

"Any  one  who  deals  in  another's  goods  may  use 
or   sell   them  with  the  latter 's  trademark   upon 
them,  for  in  such  case  there  is  no  deception.    The 
mark  truthfully  indicates  origin  or  ownership." 
But  in  General  Electric  Co.  v.  Re-New  Lamp  Co., 
121  Fed.,  164  (1903),  it  appears  that  the  defendant  was 
engaged  in  the  business  of  buying  burned  out  electric 
lamps,  among  others,  lamps  made  by  the  complainant, 
and  having  its  trademark,  cleaning  and  repairing  them 
and  inserting  new  filaments,  after  which  they  were  re- 
sold.   It  was  held  that  such  process  was  a  reconstruc- 
tion and  not  merely  a  repairing,  and  defendant's  lamps 
were  thus  a  different  product  from  those  of  complain- 
ant, and  not  entitled  to  be  re-sold  under  its  trademark. 
In  Job  Printers'  Union  v.  Kinsley,  107  111.  App.,  658, 
it  is  said : 

"Where,   therefore,   a  party  has  been  in  the 
habit  of  stamping  his  goods  with  a  particular  mark 
or  brand,  so  that  the  purchasers  of  his  goods  hay- 
ing that  mark  or  brand  know  them  to  be  of  his 
manufacture,  no  other  manufacturer  has  a  right 
to  adopt  the  same  stamp,  because  by  doing  so  he 
would  be  substantially  representing  the  goods  to 
be  the  manufacture  of  the  person  who  first  adopted 
the  stamp,  and  so  would  or  might  be  depriving 
him  of  the  profit  he  might  make  by  the  sale  of  his 
goods  which  the  purchaser  intended  to  buy. ' ' 
The  most  usual  form  of  civil  action  to  secure  re- 
dress for  trademark  piracy  in  this  country  is  by  bill  in 
equity,  praying  for  an  injunction,  discovery,  account 
of  profit  and  damages.    The  remedy  at  law  is  by  an 
action  on  the  case,  for  deceit. 

Hopkins  on  Unfair  Trade,  Sec.  104. 
Under  the  authorities  above  stated,  if  the  supply 
houses  are  fraudulently  using  parts  branded   as  if 
made  by  the  Parlin  &  Orendorff  Company,  or  with  in- 
tent to  deceive,  or  are  using  parts  made  and  branded 


621 

by  Parlin  &  Orendorff  Company,  in  setting  up  ma- 
chines, intending  to  deceive  the  buyer  and  to  be  sold 
as  a  complete  machine  manufactured  by  Parlin  & 
Orendorff,  I  am  of  the  opinion  that  an  injunction  may 
be  obtained  restraining  such  fraudulent  use  and  also 
that  accounting  of  profits  may  be  had  and  damages  as- 
sessed. 

It  is  further  to  be  noted  that  the  Illinois  statutes  pro- 
vide for  the  protection  and  registration  of  trademarks, 
labels,  terms,  designs,  etc.  Any  imitation  of  such  de- 
signs, labels,  etc.,  is  unlawful,  and  any  person  counter- 
feiting or  imitating  such  labels,  etc.,  or  knowingly  sell- 
ing wares,  etc.,  with  such  counterfeited  labels,  is  sub- 
ject to  a  fine  of  not  less  than  $100  nor  more  than  $200, 
or  to  imprisonment  for  not  less  than  three  months  nor 
more  than  one  year,  or  to  both  fine  and  imprisonment. 
The  statute  also  provides  that  an  injunction  may  be 
issued  in  such  cases,  and  an  accounting  of  profits  and 
damages  awarded.  It  is  also  provided  that  any  per- 
son who  uses  or  displays  the  genuine  label,  etc.,  of 
such  person,  association,  etc.,  in  manner  not  author- 
ized, shall  be  guilty  of  a  misdemeanor  and  be  punished 
by  imprisonment  not  less  than  three  months  nor  more 
than  one  year,  or  by  a  fine  of  not  less  than  $100  nor 
more  than  $200,  or  both.  Jurisdiction  is  also  given  to 
justices  of  the  peace  to  enforce  the  fines  provided  for 
in  the  act. 

1903  Kurd's  Rev.  Stat.  Ills.,  p.  1874. 

This  act  has  been  held  constitutional  and  to  extend 
to  corporations  the  right  to  have  registered  and  pro- 
tected their  labels,  designs,  etc. 

An  action  may  be  commenced  under  the  provisions 
of  this  act  if  the  circumstances  warrant. 


THE    DUTY    OF    A    COMMON    CARRIES    TO    FURNISH    PROPER 
EQUIPMENT   AND   THE  ROUTING   OF    SHIPMENTS. 

(E.  M.  Miller  &  Co.,  June  29,  1905.) 

"We  have  yours  of  the  20th,  inclosing  commu- 
nication spoken  of  therein.    The  point  that  is  most 


vital  with  us  is  not  touched  upon  in  this  communi- 
cation you  have  from  Mr.  Mayer.  The  idea  is  ex- 
actly this : 

The  Union  Pacific,  in  connection  with  the  South- 
ern Pacific,  and  the  Santa  Fe  being  the  other  road, 
are  the  only  ones  reaching  southern  California 
points,  such  as  San  Francisco,  Oakland  and  many 
other  points  on  down  the  State,  including  Los  An- 
geles, San  Diego,  etc. 

In  the  past,  each  of  these  roads  has  taken  fifty* 
foot  furniture  cars  for  us  down  that  way.  We 
have  succeeded  in  developing  a  nice  business  down 
that  way,  but  our  customers  demand  that  ship- 
ments be  made  in  closed  cars. 

Our  competitors  who  have  warerooms  in  Chi- 
cago are  able  to  secure  thirty-seven  foot  cars  from 
the  Chicago  &  Northwestern  road,  this  equipment 
being  made  with  end  doors  and  thereby  accom- 
modating the  commodity,  but  we  can  not  get  that 
equipment. 

A  fifty-foot  furniture  car  is  the  only  equipment 
having  door  space  sufficiently  large  to  allow  these 
landaus  being  placed  inside  the  car.  It  is  not  a 
question  of  the  length  of  the  car  with  us,  but  a 
question  of  getting  the  vehicle  inside  the  car.  But 
the  question  that  we  wish  to  know  the  legality  of  is 
whether  either  of  the  two  railroad  companies, 
being  the  only  ones  entering  that  field,  should  be 
allowed  to  say  what  equipment  it  will  carry  out 
there  and  hold  the  other  one  from  carrying  that 
equipment  when  each  road  is  amply  able,  on  ac- 
count of  its  constructions,  grades,  tunnels,  etc.,  to 
carry  the  larger  equipment." 

In  my  opinion  of  March  17,  1905,  for  E.  M.  Miller  & 
Co.,  I  discussed  the  duty  of  a  carrier,  as  to  supplying 
50-foot  cars,  and  the  liability  of  a  carrier  for  discrimi- 
nation in  so  doing. 

In  State  v.  C.  B.  &  Q.  R.  Co.,  101  N.  W.,  23  (Neb. 
Oct.,  1904),  it  was  held  to  quote  the  syllabus,  that : 

"A  common  carrier  of  goods  is  required  to  pro- 
vide facilities  for  and  to  receive  and  ship  goods 


623 

tendered  at  its  stations  on  payment  or  tender  of 
the  usual  tariff  rates,  and  has  no  right  to  discrim- 
inate or  favor  one  shipper  over  another  in  rates 
or  facilities,  but  this  general  principle  is  subject 
to  the  modification  that,  if  the  carrier  has  fur- 
nished itself  with  cars  sufficient  to  carry  the 
freight  which  may  reasonably  .be  expected  to  be 
offered  for  carriage,  taking  into  consideration  the 
fact  that  at  certain  seasons  more  cars  are  needed, 
it  has  exercised  due  diligence  in  that  regard,  and 
where,  through  causes  which  are  not  within  its 
control,  it  can  not  supply  the  cars  temporarily 
made  necessary  by  unusual  demand  therefor,  it  is 
entitled  to  apportion  the  same  in  a  fair  and  equi- 
table manner  among  its  patrons  and  can  not  be 
compelled  to  provide  one  shipper  with  cars  to  the 
exclusion  of  others." 
The  Interstate  Commerce  Act,  Sec.  5,  provides : 

'  *  That  it  shall  be  unlawful  for  any  common  car- 
rier subject  to  the  provisions  of  this  act  to  enter 
into  any  contract,  agreement  or  combination  with 
any  other  common  carrier  or  carriers  for  the  pool- 
ing of  freights  of  different  and  competing  rail- 
roads, or  to  divide  between  them  the  aggregate  or 
net  proceeds  of  the  earnings  of  such  railroad,  or 
any  portion  thereof;  and  in  any  case  of  an  agree- 
ment for  the  pooling  of  freights,  as  aforesaid,  each 
day  of  its  continuance  shall  be  deemed  a  separate 
offense. ' ' 

The  statute  contemplates  two  methods  of  pooling, 
both  of  which  are  prohibited.  First,  a  physical  pool, 
which  is  a  distribution  of  property  by  the  carrier  of- 
fered for  transportation  among  different  and  compet- 
ing railroads  in  percentages  previously  agreed  upon; 
and  second,  a  money  pool,  which  is  a  division  of  earn- 
ings. 

In  re  Pooling  Freights,  115  Fed.,  588  (1902). 
The  Sherman  Act  provides: 

"Every  contract,  combination  in  the  form  of 
trust  or  otherwise,  or  conspiracy  in  restraint  of 
trade  or  commerce  among  the  several  States,  or 


624 

with  foreign   nations,   is   hereby   declared   to  be 
illegal." 

Congress  has  power  in  legislating  upon  interstate 
commerce  to  declare  that  no  contract,  agreement  or 
combination  shall  be  legal  which  shall  restrain  trade 
and  commerce  by  shutting  out  the  operation  of  the 
general  law  of  competition. 

U.  8.  v.  Joint  Traffic  Assn.,  171  U.  S.,  505. 
U.  S.  v.  Trans-Missouri  Freight  Assn.,  166  U. 

S.,  295. 
Northern  Securities  Co.  v.  U.  S.,  193  U.  S., 

197. 

And  in  the  "Orange  Routing  Cases,"  Interstate 
Commerce  Com.  v.  South.  Pac.  R.  Co.,  132  Fed.,  829, 
846  (Sept.,  1904),  it  is  said: 

4 'After  careful  consideration  of  the  subject  I  am 
of  the  opinion  that  any  contract,  agreement  or 
combination  between  different  competing  rail- 
roads, whereby  the  volume  or  quantity  of  freights 
each  or  any  shall  receive  for  transportation  is  to 
be  determined  by  or  through  any  conventional 
means  or  agency  which  was  intended  to  and  does 
suppress  competition,  either  in  rate  or  service  or 
competition  directly  addressed  to  shippers,  is  a 
traffic  pool  within  the  meaning  of  section  5  of  the 
commerce  act,  and  that  the  routing  contract  here 
in  controversy  does  so  apportion  freights  among 
the  defendants'  Eastern  connections  and  is  essen- 
tially such  a  pool. ' ' 

I  am  inclined  to  the  opinion  that  the  understanding 
or  agreement  of  the  carriers  referred  to  is  not  illegal, 
as  long  as  no  unjust  discrimination  is  practiced  and 
all  shippers  are  treated  alike,  and  as  long  as  there  is 
no  pooling  of  earnings  on  this  business. 

But  the  carrier,  if  it  accepts  the  freight  offered, 
must  provide  suitable  facilities  for  its  transportation, 
and  can  be  compelled  so  to  do.  Whether  particular 
facilities  are  sufficient,  is  a  question  of  fact  to  be  de- 
termined in  an  appropriate  proceeding. 

NOTE: — See  opinion  of  Nov.  7,  1906   (John  E.  Burns  Lumber  Co.) 
in  reference  to  the  right  of  a  carrier  to  route  shipments  as  it  desires. — Ed. 


625 


DEMURRAGE   ON   GOODS    DETAINED    ON    ACCOUNT    OF    AN    EM- 
BARGO. 

(Block-Pollak  Iron  Company,  June  29,  1905.) 

"We  would  like  to  have  your  opinion  in  the  fol- 
lowing matter.  We  have  made  a  sale  of  several 
carloads  of  material  to  the  International  Har- 
vester Company.  This  material  was  purchased 
by  this  company  from  the  Wabash  Railroad  at 
St.  Louis,  and  the  proper  shipping  directions  were 
furnished  said  railroad  company  to  consign  the 
material  to  the  International  Harvester  Company 
via  the  Chicago  &  Northwestern  Railroad  from 
Chicago. 

The  agent  of  the  Wabash  Railroad  Company, 
after  receiving  our  reconsigning  notice  on  these 
cars,  writes  us  the  following  letter  under  date  of 
April  6th : 

'I  return  herewith  your  order  on  cars  Nos. 
43184  P.  M.  and  No.  2278  I.  C.,  which  you  are  re- 
consigning  to  the  Deering  division  of  the  Inter- 
national Harvester  Company.  I  am  unable  to 
accept  these  orders  on  account  of  an  embargo 
being  placed  on  the  International  Harvester  Com- 
pany, Deering  plant,  by  the  Chicago  &  North- 
western Railroad.  Car  No.  43184  is  held  subject 
to  Car  Service  Association  rules.  The  other  car 
has  not  yet  arrived.  When  it  does  we  shall  be 
obliged  to  hold  it  until  the  embargo  is  raised  or 
we  are  given  other  disposition. 

(Signed)     W.  EICKE, 

Agent.' 

In  a  case  of  this  kind  we  want  your  opinion 
as  to  who  is  liable  for  the  car  service  that  may 
accrue  on  such  cars. ' ' 

Rule  II  of  the   Chicago   Car   Service   Association 
Rules  (presumably  the  same  at  St.  Louis)  provides: 

"When  any  consignee  is  unable  to  receive 
freight  or  to  unload  cars,  and  for  that  reason  the 
delivering  line  refuses  to  receive  cars  from  con- 


626 

necting  lines  consigned  to  such  consignee,  the 
agent  of  such  connecting  line  or  lines  holding 
cars  for  such  consignee  shall  immediately  notify 
either  the  consignor  or  consignee  of  the  cars  so 
held  and  of  the  inability  to  forward  or  deliver  the 
same,  and  shall  charge  car  service  if  delivery 
cannot  be  effected  within  the  time  allowed  for  re- 
consignment.  ' ' 
Rule  2  (C)  provides: 

"Forty-eight  hours  will  be  allowed  on  storage 
tracks  of  railroads  bringing  cars  into  territory  of 
the  association  for  the  placing  of  reconsignment 
or  switching  orders,  but  this  will  not  apply  when 
cars  are  moved  from  one  delivery  tract  to  an- 
other for  accommodation  of  consignees." 
As  far  as  the  demurrage  rules  have  been  passed 
upon  by  the  courts,  they  have  been  generally  held 
reasonable.    Under  these  rules  the  Block-Pollak  Iron 
Company  is  liable  to  the  carrier  for  the  demurrage 
charges   accruing   after   forty-eight   hours,   the   time 
allowed  for  re-consignment.     If  the   goods  had  not 
been  loaded  on  cars  and  had  been  offered  to  the  Wa- 
bash  Railroad  directed  to  the  Deering  Division  of  the 
Harvester   Company,  the   railroad  would  then  have 
notified  the  consignor  of  the  embargo  and  car  service 
charges  could  have  been  avoided.    But  where  the  goods 
are  stored  in  cars,  the  carrier  is  entitled  to  demurrage. 
In  my  opinion  of  June  24,  1905,  to  Reid,  Murdoch 
&  Co.,  I  discussed  the  liability  of  consignees  for  de- 
murrage charges,  to  which  opinion  I  refer. 


THE  EFFECT  OF  A  CONTRACT  THAT  RESERVES  TITLE  IN  THE 
VENDOR  UNTIL  PAYMENT  UPON  A  SALE  F.  O.  B.  A  CERTAIN 
POINT,  THERE  TO  BE  LOADED  IN  CAR  WITH  OTHER  GOODS. 

(Rock  Island  Plow  Company,  July  12,  1905.) 

"We  enclose  herewith  a  copy  of  our  form  of 
contract  of  sale,  filled  out  with  reference  to  the 
freight  delivery,  the  assignment  of  exclusive  ter- 
ritory and  the  time  and  manner  of  shipment  of 


627 

goods  bought.  You  will  perceive  it  is  a  proposal 
to  make  Minneapolis  the  point  of  delivery  and 
that  the  goods  are  to  be  loaded  in  a  car  with 
mixed  goods  from  other  wholesale  houses  in  Min- 
neapolis. 

It  is  the  common  practice  in  making  these  joint 
shipments  to  await  directions  from  the  buyer, 
who  will  select  the  one  house  having  the  largest 
order  to  take  charge  of  the  shipment  and  to  de- 
liver the  car  when  loaded  with  the  several  lots  to 
the  railway  company,  billing  it  forward  in  its 
name  as  shipper.  The  other  houses  may  receive 
notice  of  the  time  of  shipment  and  the  place  of 
delivery  in  Minneapolis  to  load  from  the  buyer 
or  from  the  house  in  charge  of  the  shipment. 

It  is  with  reference  to  the  event  that  the  seller 
receives  no  notice  to  deliver  goods  to  ship — that 
the  goods  are  not  called  for — that  the  contract  is 
ignored  with  respect  to  the  agreed  time  and  man- 
ner of  shipping — that  we  desire  an  opinion  from 
Mr.  Mayer. 

In  common  usage,  such  a  contract  amounts  to 
nothing  more  than  an  option  to  the  buyer.  He 
may  take  the  goods  or  not,  as  it  may  suit  his 
pleasure.  He  has  reserved  a  territory  of  some 
value  to  the  seller,  which  he  may  use  to  the  advan- 
tage of  competing  lines,  and  the  time  has  passed 
when  the  seller  may  be  able  to  make  other  arrange- 
ments for  a  representation. 

From  the  legal  aspects  of  the  case,  under  these 
circumstances  does  the  seller  hold  any  right  or 
privilege  to  make  the  shipment,  say,  by  local 
freight,  at  the  buyer's  cost  for  transportation 
charges  from  Minneapolis?  Having  received  no 
notice  to  ship  and  having  knowledge  of  the  for- 
warding of  the  car  without  his  goods,  could  he  for- 
ward the  goods  by  a  route  of  his  own  selection, 
and,  if  need  be,  sue  under  the  contract  and  recover 
the  debt  thus  incurred! 

At  any  large  distributing  points  for  implements, 
as  Minneapolis,  Omaha,  etc.,  such  arrangements 


628 

for  joint  shipment  are  very  necessary  to  meet  the 
convenience  of  buyers  who  do  not  order  separate 
lines  in  car  lots.  In  most  cases  the  contracts  and 
arrangements  are  observed  in  good  faith  by  both 
parties,  but  it  is  in  the  case  of  the  exception  that 
we  wish  to  know  if  a  contract  of  this  kind  has  any 
binding  force." 

The  contract  referred  to  provides  in  part  as  fol- 
lows: 

"Dated  at  Henning,  Minn.,  January  20,  1905. 
Rock  Island  Plow  Company,  Hock  Island,  III. : 

Please  ship  to  us  the  following  goods  for  our 
account,  subject  to  our  risk,  delivered  to  the  car- 
rier company  f.  o.  b.  Minneapolis,  Minn.,  on  or 
about  March  15,  1905,  or  as  soon  as  possible 
thereafter  (or  you  may  ship  earlier  at  your  option, 
provided  time  of  payment  is  not  thereby  changed). 
To  be  loaded  in  car  with  other  goods  at  Minne- 
apolis." 

This  is  a  contract  of  sale  of  goods,  f.  o.  b.  Minne- 
apolis, to  be  loaded  in  car  with  other  goods  at  Minne- 
apolis. The  meaning  and  effect  of  the  latter  clause 
will  be  as  evidenced  by  custom  and  usage.  It  appears 
that  the  practice  is  for  the  buyer  to  designate  some 
firm  in  Minneapolis  from  whom  he  has  bought  other 
goods,  and  direct  that  firm  to  notify  the  Bock  Island 
Plow  Company  of  the  time  when  and  place  where  the 
car  will  be  loaded. 

Where  a  seller  agreed  to  deliver  to  the  buyer  ' '  f  .o.  b. 
cars"  at  the  place  where  transit  is  to  begin,  the  impli- 
cation is  that  he  is  to  deliver  the  cars  for  loading  at 
the  f.  o.  b.  point,  free  of  expense  to  the  consignee,  and 
such  meaning  cannot  be  changed  without  clear  evi- 
dence of  a  custom  to  the  contrary  known  to  both  par- 
ties to  the  transaction  at  the  time  of  making  the  con- 
tract. 

Vogt  v.  SUenebeck,  100  N.  W.,  820   (Wis., 

1904). 
But  in  the  present  contract,  it  is  also  provided : 

"The  title  to  and  ownership  of  all  goods  shipped 
under  this  contract  shall  remain  vested  in  party 


629 

of  the  second  part  until  the  price  thereof  shall  be 
paid  in  cash,  and  until  all  notes  given  therefor  and 
to  be  given  under  this  contract  are  paid,  and  party 
of  the  second  part  shall  be  entitled  to  the  pos- 
session of  the  same  whenever  they,  the  said  party 
of  the  second  part,  feel  insecure,  or  the  party  of 
the  first  part  may  become  insolvent,  or  bankrupt, 
but  nothing  in  this  contract  shall  be  deemed  as 
releasing  party  of  the  first  part  from  their  obliga- 
tion to  pay  for  said  goods  and  all  the  notes  hereby 
contemplated. ' ' 

Such  a  condition  reserves  titles  in  the  seller  as 
against  the  buyer. 

Page  v.  Urick,  31  Wash.,  601,  72  Pac.,  454. 
Hufford  v.  Akers,  52  W.  Va.,  21. 
The  effect  of  such  a  contract,  therefore,  is  to  reserve 
as  against  the  vendee,  title  in  the  vendor  until  pay- 
ment, and  the  condition  as  to  delivery  f.  o.  b.  is  one 
of  the  conditions  of  the  contract.     By  directing  the 
Minneapolis  firm  to  notify  the  Plow  Company  of  the 
time  and  place  of  shipment  the  vendee  made  the  Min- 
neapolis firm  his  agent,  and  he  cannot  take  advantage 
of  their  default. 

Upon  learning  of  the  failure  to  obtain  notice  of  the 
loading  of  the  car,  the  Plow  Company  should  have 
notified  the  vendee  that  it  held  the  goods  subject  to  his 
orders  and  risk.  The  vendee,  if  he  then  failed  to  give 
directions,  would  be  liable  for  breach  of  contract,  and 
for  any  damages  not  speculative,  that  could  be  proved. 


WHETHER  A  LUMBER   BROKER  IS   THE   AGENT   OF   HIS   PRIN- 
CIPAL SO  AS  TO  BIND  THE  LATTER  BY  HIS  CONTRACTS. 

(D.  S.  Pate  Lumber  Company,  July  12,  1905.) 

"For  the  past  two  years  we  have  been  doing 
some  business  with  the  lumber  dealers  at  Salt 
Lake  City,  Utah.  The  trade  there  does  not  use 
much  yellow  pine,  and  it  has  been  the  custom  for 
two  or  more  of  the  dealers  to  get  together  and 
make  up  an  order  for  a  carload.  This  business  has 


630 

been  secured  for  us  by  Frank  L.  King  &  Co.,  of 
Salt  Lake  City,  who  are  rated  as  wholesalers  with 
a  capital  of  $50,000  to  $75,000.  In  this  matter, 
however,  they  have  acted  as  brokers,  pure  and 
simple,  and  we  have  paid  them  a  selling  commis- 
sion of  $10  per  car.  We  have  endeavored  to  keep 
them  advised  of  the  market  changes,  but  have 
never  obligated  ourselves  to  do  so.  Furthermore, 
they  have  never  been  under  any  obligations  to 
solicit  yellow  pine  business  for  us  alone.  They 
have  been  at  liberty  to  sell  for  any  one  else,  but 
whether  or  not  they  have  done  so  we  do  not  know. 
About  six  months  ago  King  &  Co.  mailed  us  an 
order  for  three  cars  of  yellow  pine  finish  for  the 
Utah  Lumber  Company  at  prices  authorized  by 
us  about  sixty  days  previous.  The  same  day  that 
they  mailed  this  order  to  us  we  sent  them  a  sched- 
ule of  prices,  which  were  $3.00  to  $4.00  higher 
than  the  prices  of  sixty  days  previous.  On  receipt 
of  the  Utah  Lumber  Co.  's  order  we  immediately 
advised  both  them  and  Frank  King  &  Co.  that  we 
would  not  be  able  to  accept  and  fill  the  order  unless 
they  consented  to  advance  the  prices  to  the  new 
basis.  In  reply  to  this  the  Utah  Lumber  Company 
offered  to  stand  half  of  the  advance,  but  this  propo- 
sition was  declined.  Several  daj^s  later  they  sent 
us  a  bill  for  $110,  advising  us  that  they  had  placed 
their  order  with  other  parties  at  the  lowest  price 
offered,  and  they  were  charging  us  with  the  ad- 
vance which  they  had  to  pay.  We,  of  course, 
objected  to  this  and  stated  to  them  that  King  &  Co. 
were  brokers,  pure  and  simple,  and  in  no  sense  our 
agents ;  that  an  order  taken  by  them  was  not  bind- 
ing on  us  until  it  was  accepted  by  this  office.  They 
still  maintain  their  stand,  however,  and  as  they 
owe  us  $160  on  an  earlier  car  they  will  undoubtedly 
hold  out  the  $110  when  they  remit  us. 

The  whole  question  hinges  on  whether  or  not 
King  &  Co.  are  our  agents.  We  contend  they  are 
not.  We  would  be  pleased  to  have  Mr.  Levy 
Mayer's  legal  opinion." 


631 

The  rights  of  third  persons  against  the  principal 
for  the  acts  and  contracts  of  the  broker  rest  upon  the 
same  principles  as  in  other  cases  of  agency.  Where 
the  broker,  acting  within  the  limts  of  his  authority, 
has  bound  his  principal  to  third  persons,  they  are 
entitled  to  the  same  rights  and  remedies  against  him  as 
though  the  same  act  had  been  done  by  him  in  person. 
Where,  on  the  other  hand,  the  broker  has  exceeded 
his  authority  his  principal  is  not  bound,  nor  can  the 
broker  bind  him,  in  opposition  to  express  instructions, 
by  pursuing  his  usual  course  of  dealing. 
Mechem  on  Agency,  Sec.  985. 

In  the  case  of  Clark  v.  Gumming,  77  Ga.,  64,  it  was 
held  that  where  definite  instructions  are  given  by  the 
principal  to  the  broker  to  sell  goods  for  him  at  a  cer- 
tain specified  price,  for  a  certain  time  and  day  only, 
this  will  not  authorize  the  broker  to  contract  and  sell 
the  same  kind  of  goods  for  his  principal  at  a  different 
and  subsequent  time  for  the  same  price;  his  power  is 
limited  by  and  ceases  with  his  instructions;  and  this 
is  so,  even  though  it  had  been  usual  in  the  course  of 
dealings  between  the  broker  and  his  principal  for  the 
broker  to  continue  to  sell  at  the  prices  quoted  last  by 
the  principal.  In  that  case  a  contract  had  been  made 
by  the  broker  for  the  sale  of  peanuts  against  the  ex- 
press instructions  and  authority  of  the  principal,  and 
it  was  held  that  the  principal  could  not  be  bound. 

The  authority  of  the  broker  would  depend  in  any 
case  largely  upon  whether  he  was  authorized  either 
by  the  principal  or  by  custom  of  trade,  of  which  the 
parties  had  knowledge,  to  sell  on  quotations  last  named 
by  his  principal  until  new  quotations  or  prices  should 
be  furnished  by  his  principal. 

Like  other  agents,  a  broker  is  bound  to  obey  his  in- 
structions, and  he  will  be  liable  to  his  principal  for  a 
failure  to  do  so;  and  no  usage  or  custom  will  author- 
ize a  departure  from  positive  instructions. 
4  Am.  Eng.  Enc.  (2d  ed.),  968. 

A  principal  is  liable  to  a  third  party  for  all  contracts 
entered  into  by  his  broker  within  the  actual  scope  of 
his  author itv.  He  is  also  liable  if  the  contracts  are 


632 

within  the  apparent  scope  of  the  agent's  authority, 
but  such  apparent  scope  may  be  limited  by  direct  in- 
structions if  the  third  party  has  knowledge  thereof. 
The  principal  is  also  liable  if  the  contract  is  author- 
ized by  the  usage  and  custom  of  the  particular  trade 
in  which  the  broker  is  engaged,  and  with  reference  to 
which  the  principal  and  agent  has  contracted.  But, 
subject  to  the  above  limitations,  the  principal  is  not 
bound  where  the  broker  exceeds  his  authority.  The 
authority  of  the  broker  can  not  be  limited  by  private 
instructions  from  his  principal  not  known  to  the  par- 
ties with  whom  he  deals,  if  the  contract  is  within  the 
apparent  scope  of  the  agent 's  -authority ;  and  the  prin- 
cipal will  be  bound  by  contracts  made  by  his  broker 
within  the  apparent  scope  of  his  employment,  not- 
withstanding such  contracts  be  made  contrary  to  the 
principal's  express  instructions,  unless  such  instruc- 
tions are  known  to  the  other  party. 

4  Am.  Eng.  Enc.  (2d.  ed.),  987,  and  cases  cited. 

Any  one  dealing  with  a  person  whom  he  knows  to 
be  a  broker  will  be  presumed  to  know,  from  the  nature 
of  a  broker's  business,  that  he  is  acting  as  agent  for 
some  third  person. 

Baxter  v.  Duren,  29  Maine,  434. 

The  liability  of  the  Pate  Lumber  Company  in  this 
particular  case  will  depend  upon  the  terms  of  the  au- 
thorization given  to  Frank  L.  King  &  Co.,  either  by 
express  direction  or  by  holding  them  out  as  having 
certain  authority,  or  by  ratification  of  previous  acts. 
If  King  &  Co.  exceeded  their  express  instructions  that 
the  prices  quoted  were  for  a  certain  time,  or  subject 
to  further  change  without  notice,  I  am  of  opinion  that 
then  the  Pate  Lumber  Company  would  not  be  re- 
sponsible. The  liability  in  any  event  depends  upon  the 
extent  and  terms  of  the  authority  of  King  &  Co.  If 
King  &  Co.  were  holding  themselves  out  to  the  world 
as  the  general  agents  of  the  Pate  Lumber  Company, 
as  having  authority  to  accept  orders  for  the  lumber 
company,  and  the  lumber  company  had  knowledge  of 
and  acquiesced  in  these  conditions,  it  would  be  bound 
by  the  acts  of  King  &  Co.  The  question  resolves  it- 


633 

self  into  one  of  fact  to  be  determined  in  accordance 
with  the  foregoing  principles  of  law.  If  all  of  the 
facts  are  contained  in  the  question  propounded,  and 
there  are  no  qualifying  facts  of  any  kind,  I  think  the 
chances  preponderate  from  a  purely  legal  standpoint 
in  favor  of  the  Pate  Lumber  Company.  It  should  be 
borne  in  mind,  however,  that  the  suit,  if  litigation  en- 
sues, will  be  carried  on  at  a  distance  from  home,  where 
the  absent  plaintiff  is  likely  to  be  at  a  disadvantage 
before  a  jury.  It  is  a  case  for  compromise.  The  lum- 
ber company  ought  in  its  contracts  with  its  broker  to 
explicitly,  in  writing,  define  the  broker's  powers. 


THE  LIABILITY  OF  A  BOILER  MANUFACTURER  FOR  PERSONAL 
INJURIES  SUSTAINED  BY  A  SUB-CONTRACTOR  OR  HIS  EM- 
PLOYES DURING  THE  ERECTION  OF  A  BOILER  BY  THE 
MANUFACTURER. 

(Kewanee  Boiler  Company,  July  12,  1905.) 
"We  are  a  corporation  organized  under  the 
general  laws  of  Illinois.  Part  of  our  business  is 
the  making  and  selling  of  boilers,  and  in  some 
cases  we  sell  these  boilers,  set  up  complete  at  the 
points  where  they  are  to  be  used,  we  paying  the 
freight  from  the  factory,  delivering  the  boilers 
on  the  ground,  setting  them  up  in  brickwork  and 
making  pipe  connections  to  the  engines  and  smoke 
connections  to  the  chimneys.  In  most  cases  we 
sublet  all  of  the  work  of  taking  the  boilers  from 
cars  at  destination,  setting  them  up  in  brickwork, 
putting  up  the  pipework  and  smoke  connections. 
The  question  arises  with  us,  are  we  liable  in  any 
way  for  personal  injuries  that  may  be  sustained 
by  the  subcontractors  or.  their  employes  during  the 
erection  of  the  work? 

Another  point:  In  case  we  sublet  the  putting 
up  of  the  steam  pipe  work  and  connections,  and 
the  subcontractor  uses  material  that  is  not  strong 
enough  to  withstand  the  steam  pressure  to  which 
the  boiler  is  guaranteed  by  us,  and  after  the  work 


is  completed  some  part  of  this  pipe  work  gives 
way  and  does  personal  injury  to  an  employe  of 
the  purchaser  of  the  boiler,  or  to  an  employe  of 
the  contractor  for  the  pipe  work,  are  we  in  any 
way  liable  for  such  personal  injury?  If  we  are 
liable  in  either  of  the  cases  mentioned,  what  form 
of  contract  can  we  make  with  the  purchaser  of 
the  boiler,  or  with  the  subcontractor  for  any  part 
of  the  work,  which  will  relieve  us  from  such  re- 
sponsibility?" 

It  is  the  general  rule  that  an  employer  is  not  an- 
swerable for  the  negligence  of  an  independent  con- 
tractor, if  the  employer  uses  due  care  in  selecting  the 
independent  contractor,  or  the  work  contracted  for 
does  not  of  itself  create  a  nuisance. 

Conners  v.  Hennessey,  112  Mass.,  96. 
Brown  v.  McLeish,  71  Iowa,  381. 
R.  R.  v.  Farver,  111  Ind.,  195. 
Boswell  v.  Laird,  8  Cal.,  469. 
Cuff  v.  R.  R.  Co.,  35  N.  J.  L.,  17. 
Engel  v.  Eureka  Club,  137  N.  Y.,  100. 
Reed  v.  Allegheny,  79  Pa.,  300. 
And  where  one  has  engaged  another  person  to  exe- 
cute an  undertaking  and  the  latter  is  to  select  and 
employ  his  own  assistants,  and  the  employer  does  not 
retain  or  exercise  any  control  over  the  manner  in  which 
the  work  is  done,  the  employer,  is  not  liable,  in  an 
action  by  a  third  person,  for  injuries  sustained  from 
the  negligence  of  the  assistants  employed  by  the  sub- 
contractor in  performing  the  work. 

Prairie  State  Loan  &  Trust  Co.  v.  Doig,  70 

111.,  52. 

Stale  v.  Johnson,  80  111.,  185. 
Wray  v.  Evans,  80  Pa.,  102. 
King  v.  R.  R.  Co.,  66  N.  Y.,  181. 
Where  the  wrongful  acts  complained  of  were  those 
of  the  servants  of  such  sub-contractor,  who  are  not  in 
any  way  under  control  of  the  employer,  the  latter  is 
not  liable. 

Callahan  v.  R.  R.  Co.,  23  Iowa,  562. 
And  an  employe  of  a  sub-contractor  can  not  recover 


635 

from  the  contractor  for  personal  injuries  caused  bj- 
his  own  employer's  negligence,  if  the  contractor  re- 
tained no  power  of  directing  and  controlling  the  work. 
West  v.  R.  R.  Co.,  63  111.,  545. 
Mohr  v.  McKenzie,  60  111.  App.,  575. 
In  Construction  Co.  v.  Housen,  176  111.,  100,  it  was 
held  that  a  building  contractor,  who  lets  a  portion  of 
the  work  to  a  sub-contractor,  does  not,  by  retaining  the 
power  to  inspect  the  work  to  see  that  it  is  honestly 
performed,  become  the  master  of  the  sub-contractor's 
employes,  so  as  to  be  liable  for  their  negligent  acts. 
The  court  there  said: 

"He  is  the  master  who  has  the  choice,  control 
and  direction  of  the  servants.  The  master  re- 
mains liable  to  strangers  for  the  negligence  of  his 
servants,  unless  he  abandons  their  control  to  the 
hirer.  Control  of  servants  does  not  exist,  unless 
the  hirer  has  the  right  to  discharge  them  and  em- 
ploy others  in  their  places.  The  doctrine  of  re- 
spondeat  superior  is  applicable  where  the  person 
sought  to  be  charged  has  the  right  to  control  the 
action  of  the  person  committing  the  injury.  It 
follows  that  the  right  to  control  the  negligent  serv- 
ant is  the  test  by  which  it  is  to  be  determined 
whether  the  relation  of  master  and  servant  exists ; 
and,  inasmuch  as  the  right  to  control  involves  the 
power  to  discharge,  the  relation  of  master  and 
servant  will  not  exist  unless  the  power  to  discharge 
exists." 

The  rules  of  law  are  well  settled  as  above  stated.  The 
liability  depends,  in  nearly  every  case,  upon  whether 
the  facts  and  circumstances  are  such  as  to  make  the 
person  to  whom  the  contract  is  let  an  independent  con- 
tractor. This  must  be  determined  from  the  contract 
of  employment  and  from  the  extent  of  the  control 
exercised  by  the  employer  over  the  contractor.  If  the 
employer  assumes  control  and  directs  the  work,  the 
case  is  not  within  the  rule  as  to  independent  contractors 
and  the  employer  would  be  liable. 

In  Brackett  v.  LubJce,  4  Allen  (Mass.),  134,  140,  it  is 
said: 


636 

"The  distinction  on  which  all  the  cases  turn  is 
this :    If  the  person  employed  to  do  the  work  car- 
ries on  an  independent  employment,  and  acts  in 
pursuance  of  a  contract  with  his  employer  by 
which  he  has  agreed  to  work  on  certain  specified 
terms,  in  a  particular  manner  and  for  a  stipulated 
price,  then  the  employer  is  not  liable.     The  rela- 
tion of  master  and  servant  does  not  subsist  between 
the  parties,  but  only  that  of  contractor  and  con- 
tractee.     The  power  of  directing  and  controlling 
the  work  is  parted  with  by  the  employer  and  given 
to  the  contractor.    But,  on  the  other  hand,  if  work 
is  done  under  a  general  employer,  and  is  to  be 
performed  for  a  reasonable  compensation  or  for  a 
stipulated    price,    the    employer    remains    liable, 
because  he  retains  the  right  and  power  of  directing 
and  controlling  the  time  and  manner  of  executing 
the  work,  or  of  refraining  from  doing  it,  if  he 
deems  it  necessary  or  expedient. ' ' 
In  the  well  known  case  of  Losee  v.  Clote,  51  N.  Y., 
494,  it  was  held  that  the  manufacturer  and  vendor  of 
a  steam  boiler  is  liable  only  to  the  purchaser  for  de- 
fective material  or  for  any  want  of  care  and  skill  in 
its  construction;  and,  if  after  delivery  and  acceptance 
by  the  purchaser,  and  while  in  use  by  him,  an  explosion 
occurs  in  consequence  of  such  defective  construction, 
to  the  injury  of  a  third  person,  the  latter  has  no  cause 
of  action,  because  of  such  injury,  against  the  manufac- 
turer. 

The  present  case  must  be  determined  in  accordance 
with  the  foregoing  principles.  If  the  work  is  sub-let 
to  a  sub-contractor,  and  there  is  no  interference,  direc- 
tion or  control  by  the  boiler  company  over  the  construc- 
tion work,  other  than  the  mere  inspection  of  the  work, 
I  am  of  opinion  that  it  is  not  liable  for  the  injuries 
referred  to.  It  is  highly  advisable,  however,  that  the 
contract  should  clearly  specify  the  exact  rights  and 
duties  (and  their  limitations)  of  the  parties.  If,  as 
a  matter  of  law,  the  boiler  company  would  be  liable 
to  strangers,  i.  e.,  persons  other  than  employes  of  the 
sub-contractor,  then  no  contract  can  be  drawn  between 


637 

the  boiler  company  and  a  sub-contractor  by  which  the 
boiler  company  can  be  released  from  such  liability  to 
a  stranger,  though  the  contract  could  legally  provide 
for  indemnity  by  the  sub-contractor  to  the  boiler  com- 
pany. 

ANSWERS  TO  MANY  QUESTIONS  PROPOUNDED  BY  THE  CENSUS 
BUREAU  IN  ITS  CENSUS  OF  MANUFACTURES  CAN  NOT 
LEGALLY  BE  COMPELLED. 

(Morden  Frog  &  Crossing  Works,  July  12,  1905.) 

"Referring  to  the  opinions  rendered  by  Mr. 
Levy  Mayer,  February  4  and  March  22  last,  in 
regard  to  answers  to  be  made  to  the  Government's 
Census  Bureau,  would  be  pleased  to  have  Mr. 
Mayer  state  whether  he  does  not  consider  the 
questions  in  the  schedule  pertaining  to  the  general 
expenses  and  the  profits  derived  in  the  conduct  of 
one's  business  as  private  matters  and  not  of  a  gen- 
eral character,  and  which  the  general  public  are 
not  interested  in,  and  whether  a  corporation  can 
be  compelled  by  the  census  law  to  answer  such 
questions  which  seem  to  be  purely  a  matter  of 
interest  to  the  stockholders  of  each  corporation. 

I  am  also  advised  that  there  has  been  a  decision 
by  the  United  States  Supreme  Court  in  suit 
brought  against  a  manufacturer  of  Cleveland, 
Ohio,  by  which  he  was  compelled  to  answer  all 
questions  of  the  schedule.  If  such  is  the  case,  will 
be  pleased  to  have  Mr.  Mayer  quote  therefrom, 
and  oblige." 

I  am  not  aware  of  any  opinion  that  has  been  handed 
down  by  the  United  States  Supreme  Court  in  relation 
to  census  schedules. 

The  case  of  United  States  v.  Mitchell,  58  Fed.,  993 
(1893),  referred  to  and  quoted  from  in  my  census  opin- 
ion of  Feb.  4,  1905,  was  a  decision  of  the  United  States 
District  Court  of  Ohio.  The  facts  of  that  case  show 
that  Jethro  G.  Mitchell  was  the  Treasurer  of  the 
Mitchell  and  Rowland  Lumber  Company,  a  corporation 
organized  under  the  laws  of  Ohio.  Mitchell  was 


638 

indicted  for  refusing  to  answer  questions  put  to  him 
by  a  census  official  in  regard  to  the  business  of  his 
corporation.  A  demurrer  to  the  indictment  was  sus- 
tained, and  the  indictment  quashed.  The  court  held 
that : 

"The  provision  of  the  act  of  July  8,  1892,  im- 
posing a  penalty  for  refusal,  to  answer  questions 
upon  officers  of  corporations  engaged  in  pro- 
ductive industry,  from  which  or  from  whom  an- 
swers 'are  herein  required,'  is  ineffective,  because 
there  is  no  provision,  in  that  or  any  other  act,  re- 
quiring such  corporation  or  their  officers  to  answer 
the  questions." 

I  am  of  the  opinion  that  answer  to  many  questions 
propounded  by  the  Census  Bureau  would  disclose  pri- 
vate business,  and  that  the  officers  of  the  corporation 
can  not  legally  be  compelled  to  disclose  such  informa- 
tion. (See  my  opinion  of  Feb.  4,  1905.)  But  the  facts 
in  each  instance  must  determine  whether  the  answers 
would  or  would  not  involve  an  unnecessary  disclosure 
of  private  business.  I  can  readily  conceive  that  in 
many  instances  the  answers  as  to  the  general  expenses 
and  profits  of  one's  business  would  involve  such  un- 
necessary disclosure.  I  would,  however,  advise  manu- 
facturers to  answer  all  questions  that  they  can  con- 
sistently answer,  on  account  of  the  great  value  of  the 
statistics  of  manufacturers  obtained  by  the  Bureau  of 
the  Census,  and  also  for  the  reasons  set  forth  in  the 
letter  of  March  22,  1905,  to  the  Illinois  Manufacturers7 
Association. 


IN  WHOM  IS  THE  TITLE  TO  GOODS  IN  TRANSIT  WHEN  SOLD 
"COAST  FREIGHT  ALLOWED"  AND  AS  TO  THE  EFFECT  OF 
SALES  F.  O.  B.  CERTAIN  POINTS? 

(Chicago  Varnish  Company,  July  12,  1905.) 

; '  On  March  23d  we  loaded  into  a  car  shipped  by 
Bradley  &  Vrooman  Company,  of  this  city,  a  bill 
of  goods  for  a  house  in  Seattle,  Wash.  The  terms 
of  the  shipment,  in  so  far  as  the  delivery  was  con- 
cerned, were  'coast  freights  allowed.'  When  the 


639 

car  reached  St.  Paul  the  Bradley  &  Vrooman  Com- 
pany took  out  an  attachment  against  our  goods 
and  others  in  order  to  secure  payment  of  an  old 
claim  which  the  consignee  owed  them. 

We  would  like  the  opinion  of  your  legal  depart- 
ment as  to  the  ownership  of  these  goods,  which 
were  in  transit  at  the  time.  The  Bradley  &  Vroo- 
man Company  state  that  their  goods  which  were 
in  this  car  were  consigned. ' ' 

In  my  opinion  of  October  24,  1903,  in  response  to  an 
inquiry  from  the  American  Steel  &  Wire  Company, 
and  of  March  19,  1904,  in  response  to  an  inquiry  from 
S.  A.  Maxwell  &  Co.,  I  discussed  the  effect  of  similar 
phrases  in  reference  to  their  reserving  of  title  in  the 
consignor.  I  refer  to  these  opinions  and  the  cases  there 
cited. 

In  my  opinion  of  March  19,  1904, 1  said : 

' '  On  October  24,  1903,  I  stated,  in  an  opinion  to 
American  Steel  &  Wire  Company,  that  in  the 
absence  of  other  qualifying  circumstances  the  pre- 
payment of  freight  by  the  consignor  constituted 
the  carrier  the  agent  of  the  consignor,  and  that 
the  title  to  the  goods  shipped  did  not  pass  until 
delivery  to  the  consignee.  The  allowance  of 
freight  by  the  consignor  to  be  deducted  from  the 
purchase  price  is  the  same  in  legal  effect  as  a  pre- 
payment by  the  consignor.  I  also  stated  in  that 
opinion  that  whether  the  title  to  the  goods  passes 
upon  the  delivery  to  the  carrier  is  primarily  a 
question  of  intention  to  be  determined  from  the 
contract  and  from  all  the  facts  and  circumstances 
of  the  case,  and  that,  as  a  general  rule,  there  being 
no  limiting  circumstances,  delivery  to  a  carrier  is 
a  delivery  to  the  consignee,  the  carrier  being  con- 
sidered as  the  agent  of  the  consignee." 
In  24  Am.  &  Eng.  Enc.  Law  (2d  Ed.),  1071,  it  is  said : 
"  Where  the  duty  of  the  seller  is  to  send  the 
goods  to  the  buyer,  the  general  rule  is  that  deliv- 
ery to  a  common  carrier  is  equivalent  to  a  delivery 
to  the  buyer  himself,  and  particularly  is  this  so  if 
the  carrier  to  whom  the  delivery  is  made  has  been 


640 

designated  by  the  buyer ;  the  carrier  is  deemed  the 
agent  of  the  buyer  and  not  the  agent  of  the  seller. 
Such  delivery  effects  a  transfer  of  title  and  is  suf- 
ficient performance  of  the  contract  to  enable  the 
seller  to  maintain  an  action  for  goods  sold  and  de- 
livered, even  though  the  seller  pays  the  freight, 
though    in    controverted    cases    the    payment    of 
freight  may  have  an  important  bearing  in  deter- 
mining whose  agent  the  carrier  is." 
If  a  point  specified  for  delivery  f.  o.  b.  is  the  final 
point  of  destination,  or  an  intermediate  point,  the  de- 
livery to  the  carrier  at  the  initial  point  of  shipment 
does  not  ordinarily  operate  to  pass  the  title  in  the 
goods  to  the  vendee,  but  the  vendor  still  retains  the 
title  and  risk  of  transportation  to  the  f.  o.  b.  point 
designated  in  the  contract. 

In  Dannemiller  v.  Kirkpatrick,  201  Pa.,  218,  50  Atl., 
928,  the  loss  of  a  carload  of  coffee  was  involved.  The 
coffee  was  shipped  from  Canton,  Ohio,  and  consigned 
to  vendees  at  Pittsburg  under  a  contract  which  recited 
that  the  vendors  agreed  "to  bill  'Cordova'  coffee  at 
the  same  price  f.  o.  b.  Pittsburg"  as  certain  other  com- 
panies, and  the  invoice  sent  to  the  vendees  at  the  time 
of  shipment  contained  the  following: 

''All  goods  delivered  to  the  carriers  in  good 
order.  Claims  for  damage  thereafter,  or  break- 
age, must  be  made  against  the  transportation  com- 
pany delivering  the  goods." 

It  was  held  that  to  "bill"  coffee  f.  o.  b.  was  not 
synonymous  with  the  expression  to  deliver  coffee  f.  o. 
b.,  and  that  the  language  used  implied  that  the  cost  of 
the  coffee  at  Pittsburg,  including  the  expense  of 
placing  it  there,  should  not  exceed  the  price  of  coffee 
sold  by  competing  firms  at  that  point;  and,  while  it 
was  some  evidence  to  the  effect  that  delivery  was  to  be 
at  Pittsburg,  it  was  not  conclusive,  but,  with  the  other 
evidence  in  the  case,  presented  a  question  of  fact  to  be 
determined  by  the  jury. 
The  court  said  in  this  case: 

"If  it  is  the  intention  of  the  parties,  and  it  so 
appears  from  their  contract,  that  delivery  is  to 


641 

take  place  at  the  destination  of  the  property,  and 
that  the  title  is  to  remain  in  the  consignor  until 
that  time,  then  delivery  to  the  carrier  does  not 
divest  the  title  of  the  vendor  to  the  property,  nor 
pass  it  to  the  purchaser,  until  it  reaches  its  desti- 
nation, and  the  hazards  of  transportation  are  at 
the  risk  of  the  consignor.  It,  therefore,  becomes  a 
question,  in  cases  of  this  character,  as  to  where 
the  delivery  of  the  goods  is  to  be  made  and  when 
the  title  is  to  pass  to  the  purchaser.  If  the  facts 
are  not  in  dispute,  it  is  a  question  of  law  for  the 
court,  but  if  the  evidence  is  conflicting  the  ques- 
tion must  be  determined  by  a  jury." 
Other  authorities  are  to  the  same  effect: 

Niemeyer  v.  R.  R.  Co.,  54  Neb.,  321 ;  74  N.  W., 

670. 

Devine  v.  Edwards,  101  111.,  138. 
Brewing  Ass'n  v.  Tripp,  6  Kan.  App.,  730;  50 

Pac.,  956. 

Lint  v.  Woodhall,  113  Mass.,  391. 
Murray  v.  Nichols,  11  N.  Y.  S.,  734. 
In  Erwin  v.  Harris,  87  Ga.,  333,  13  S.  E.,  513,  the 
court  says  that  if  the  vendor  is  not  satisfied  of  the 
solvency  of  the  purchaser,  or  is  doubtful  thereof,  or 
wished  to  retain  title  in  himself,  he  may  take  a  bill  of 
lading  from  the  carrier  to  his  own  order,  and  when  he 
does  this  it  is  evident  that  he  does  not  part  with  the 
title  to  the  goods  shipped,  but  retains  the  same  until 
the  draft  which  he  sends  with  the  bill  of  lading  to  a 
bank  at  point  of  destination  for  collection  is  accepted 
or  paid,  and  that,  when  the  title  is  thus  reserved  by 
the  vendor,  the  carrier  is  his  agent  and  not  the  agent 
of  the  consignee,  and  that  risk  is  the  consignor's  and 
not  the  consignee's. 

The  contract  in  the  present  case  contained  the 
phrase,  "Coast  freights  allowed."  It  is  not  clear 
whether  this  clause  solely  relates  to  the  delivery  of  the 
goods,  which  would  probably  bring  the  case  within  the 
scope  of  my  former  opinion  of  October  24,  1903,  to  the 
American  Steel  &  Wire  Co.,  above  referred  to,  or 


642 

whether  it  relates  to  the  price  of  the  goods  or  the  terms 
of  payment. 

In  the  absence  of  other  facts  and  circumstances,  or 
other  conditions  of  the  contract,  than  those  presented 
to  me,  I  am  of  the  opinion  that  the  clause  in  question  is 
merely  one  of  the  terms  of  payment,  and  does  not  show 
an  intention  on  the  part  of  the  vendor  to  reserve  the 
title  to  the  goods  in  himself.  It  is  similar  in  effect  to  a 
sale  on  credit  and  an  allowance  of  discount  from  the 
price  as  quoted  to  the  amount  of  the  freight  to  the 
Coast,  which  is  to  be  deducted  by  the  vendee  from  the 
purchase  price.  This  would  bring  the  case  within  the 
scope  of  my  opinion  of  March  24,  1904,  heretofore  men- 
tioned. The  title  to  the  goods,  therefore,  vested  in  the 
consignee  upon  delivery  to  the  carrier,  and  they  could 
be  lawfully  attached  by  any  creditor  of  such  consignee. 


THE  FOREIGN  CORPORATION  LAWS  OF  CALIFORNIA,  OHIO  AND 
PENNSYLVANIA. 

(Kellogg  Switchboard  &  Supply  Company,  July  12, 

1905.) 

"We  have  branch  houses  in  Los  Angeles,  Cleve- 
land &  Philadelphia,  where  we  maintain  a  stock 
and  sell  directly  from  same.    We  would  be  pleased 
to  know  if,  under  the  laws  of  these  States,  we  are 
subject  to  any  license  fee.    All  large  orders  and 
contracts  are  subject  to  the  approval  of  the  Chi- 
cago office  and  are  shipped  from  that  point.    We 
have  a  resident  agent  in  New  York  City  who  keeps 
on  hand  only  a  sample  line  of  apparatus.     His 
orders  are  sent  to  the  Chicago  office,  subject  to  ap- 
proval,  and   shipments   are   all  made   from  that 
point.     In  these  cases   are  we  'doing  business' 
under  the  laws  of  the  State  of  New  York,  and,  if 
so,  are  we  liable  to  a  license  fee  there?" 
On  the  facts  as  above  set  forth,  the  Kellogg  Com- 
pany is  not  doing  business  in  New  York,  and,  there- 
fore, need  not  comply  with  the  foreign  corporation 
laws  of  that  State. 


643 

A  different  question  is  presented  in  reference  to  the 
States  of  California,  Ohio  and  Pennsylvania.  The 
maintenance  of  a  stock  of  goods  in  the  places  named, 
and  the  making  of  direct  sales  from  such  stock,  con- 
stitutes " doing  business"  in  the  particular  States  and 
subjects  the  corporation  to  the  operation  of  the  foreign 
corporation  laws. 

The  laws  of  California  provide  inter  alia  (act  March 
21,  1905) : 

1 l  Every  corporation  other  than  those  created  by 
or  under  the  laws  of  this  State  must,  within  forty 
days  from  the  time  it  commences  to  do  business 
therein,  file  in  the  office  of  the  Secretary  of  State 
a  designation  of  some  persons  residing  within  the 
State  upon  whom  process  issued  by  authority  of 
or  under  any  law  of  this  State  may  be  served.  A 
copy  of  such  designation,  duly  certified  by  the 
Secretary  of  State,  is  sufficient  evidence  of  such 
appointment.  Such  process  may  be  served  on  the 
person  so  designated,  or,  in  the  event  that  no  such 
person  is  designated,  then  on  the  Secretary  of 
State,  and  the  service  is  a  valid  service  on  such 
corporation. ' ' 

4 'Every  corporation  which  complies  with  the 
provisions  of  this  chapter  is  thereafter  entitled  to 
the  benefits  of  the  laws  of  this  State  limiting  the 
time  for  the  commencement  of  civil  actions,  but 
no  corporation  not  created  by  or  under  the  laws 
of  this  State  is  entitled  to  the  benefit  thereof,  nor 
can  any  such  corporation  maintain  or  defend  an 
action  or  proceeding  in  any  court  of  this  State 
until  the  corporation  has  complied  with  the  pro- 
visions of  the  preceding  section.  In  any  action  or 
proceeding  instituted  against  any  body  styled  as 
a  corporation,  but  not  created  by  nor  under  the 
laws  of  this  State,  evidence  that  such  body  has 
acted  as  a  corporation,  or  employed  methods 
usually  employed  by  corporations,  must  be  re- 
ceived by  the  court  for  the  purpose  of  proving  the 
existence  of  such  corporation,  the  sufficiency  of 
such  evidence  to  be  determined  by  the  court  with 


644 

like  effect  as  in  other  cases.  Every  corporation 
which  has  complied  with  the  laws  then  in  force, 
requiring  it  to  make  and  file  a  designation  of  the 
person  upon  whom  process  against  it  may  be 
served,  need  not  make  or  file  any  further  designa- 
tion. Any  designation  heretofore  or  hereafter 
made  may  be  revoked  by  the  filing  by  the  corpora- 
tion with  the  secretary  of  State  of  a  writing  stat- 
ing such  revocation.  Within  forty  days  after  the 
death  or  removal  from  the  State  of  any  person 
designated  by  the  corporation,  or  after  the  revoca- 
tion of  the  designation,  the  corporation  must  make 
a  new  designation  or  be  subject  to  the  provisions 
and  penalties  of  this  chapter." 

"  Every  corporation  organized  under  the  laws 
of  another  State,  Territory,  or  of  a  foreign  coun- 
try, which  is  now  doing  business  in  this  State,  or 
is  maintaining  an  office  herein,  or  which  shall 
hereafter  do  business  in  this  State  or  maintain  an 
office  herein,  or  which  shall  enter  this  State  for  the 
purpose  of  doing  business  herein,  must  file  in  the 
office  of  the  Secretary  of  State  of  the  State  of 
California  a  certified  copy  of  its  articles  of  incor- 
poration, or  of  its  charter,  or  of  the  statute  or 
statutes,  or  legislature,  or  executive,  or  govern- 
mental act  or  acts  creating  it,  in  cases  where  it 
has  been  created  by  charter,  or  statute,  or  legis- 
lative, or  executive  or  governmental  act,  and  a 
certified  copy  thereof,  duly  certified  by  the  Secre- 
tary of  State  of  this  State,  in  the  office  of  the 
county  clerk  of  the  county  where  its  principal 
place  of  business  is  located,  and  also  where  such 
corporation  owns  property. 

For  filing  and  issuing  a  certified  copy  as  re- 
quired in  section  four  hundred  and  eight  of  this 
code,  corporations  formed  under  the  laws  of  an- 
other State,  or  of  a  Territory,  or  of  a  foreign 
country,  must  pay  the  same  fees  as  are  paid  by 
corporations  formed  under  the  laws  of  this  State. 

Every  corporation  organized  under  the  laws  of 
another  State,  Territory,  or  of  a  foreign  country, 


645 

which  shall  neglect  or  fail,  within  ninety  days 
from  the  taking  effect  of  this  section,  to  comply 
with  the  conditions  of  sections  four  hundred  and 
eight  and  four  hundred  and  nine  of  this  code,  shall 
be  subject  to  a  fine  of  not  less  than  five  hundred 
dollars,  to  be  recovered  in  any  court  of  competent 
jurisdiction ;  and  it  is  hereby  made  the  duty  of  the 
Secretary  of  State,  as  he  may  be  advised  that  cor- 
porations are  doing  business  in  contravention  of 
sections  four  hundred  and  eight  and  four  hundred 
and  nine  of  this  code,  to  report  the  fact  to  the 
governor,  who  shall  instruct  the  district  attorney 
of  the  county  wherein  such  corporation  has  its 
principal  place  of  business,  or  the  attorney-gen- 
eral of  the  State,  or  both,  as  soon  as  practicable, 
to  institute  proceedings  to  recover  the  fine  pro- 
vided for  in  this  section,  and  the  amount  so  recov- 
ered must  be  paid  into  the  State  treasury  to  the 
credit  of  the  general  fund  of  the  State;  in  addi- 
tion to  which  penalty,  no  foreign  corporation 
which  shall  fail  to  comply  with  sections  four  hun- 
dred and  eight  and  four  hundred  and  nine  of  this 
code  can  maintain  any  suit  or  action  in  any  of  the 
courts  of  this  state  until  it  has  complied  with  said 
sections;  provided,  that  any  such  corporation 
which,  prior  to  the  8th  day  of  March,  1901,  shall 
have  complied  with  the  provisions  of  the  act  en- 
titled '  An  act  to  amend  l  i  An  act  in  relation  to  for- 
eign corporations,"  approved  April  1,  1872,  ap- 
proved March  17,  1899,  is  exempted  from  the  pro- 
visions of  this  section  and  the  two  sections  next 
preceding.'  " 

The  laws  of  Ohio  provide  inter-alia  (act  April  27, 
1904) : 

"Sec.  148c.  Every  foreign  corporation,  incor- 
porated for  purposes  of  profit,  now  or  hereafter 
doing  business  in  this  State,  and  owning  or  using 
a  part  or  all  of  its  capital  or  plant  in  this  State, 
shall,  within  thirty  days  after  the  passage  of  this 
act,  or,  in  case  of  a  company  hereafter  coming 
into  this  State,  then  before  it  proceeds  to  do  any 


business  in  this  State,  under  the  oath  of  the  presi- 
dent, secretary,  treasurer,  superintendent  or  man- 
aging agent  in  this  State  of  such  corporation, 
make  and  file  with  the  secretary  of  State  a  state- 
ment, in  such  form  as  the  secretary  of  State  may 
prescribe,  containing  the  following  facts : 

1.  The  number  of  shares  of  authorized  capital 
stock  of  the  company,  and  the  par  value  of  each 
share. 

2.  The  name  and  location  of  the  office  or  officers 
of  the  company  in  Ohio,  and  the  name  and  ad- 
dress of  the  officers  or  agents  of  the  company  in 
charge  of  its  business  in  Ohio. 

3.  The  value  of  the  property  owned  and  used 
by  the  company  in  Ohio,  where  situate,  and  the 
value  of  the  property  of  the  company  owned  and 
used  outside  of  Ohio. 

4.  The  proportion  of  the  capital  stock  of  the 
company  which  is  represented  by  property  owned 
and  used  (and)  by  business  transacted  in  Ohio. 

From  the  facts  thus  reported,  and  any  other 
facts  coming  to  his  knowledge  bearing  upon  the 
question,  the  secretary  of  State  shall  determine 
the  proportion  of  the  capital  stock  of  the  company 
represented  by  its  property  and  business  in  Ohio, 
and  shall  charge  and  collect  from  the  company  for 
the  privilege  of  exercising  its  franchises  in  Ohio 
one-tenth  of  one  per  cent,  upon  the  proportion  of 
the  authorized  capital  stock  of  the  corporation, 
represented  by  property  owned  and  used  and  busi- 
ness transacted  in  Ohio,  being  the  same  fee  re- 
quired to  be  paid  by  corporations  formed  under 
the  laws  of  Ohio.  Upon  the  payment  of  the  said 
amount,  the  secretary  of  State  shall  issue  to  the 
foreign  corporation  a  certificate  that  such  cor- 
poration has  complied  with  the  laws  of  Ohio,  and 
is  authorized  to  do  business  therein,  stating  the 
amount  of  its  entire  capital  and  the  proportion  of 
which  is  represented  in  Ohio.  Provided,  this  sec- 
tion shall  not  apply  to  foreign  insurance,  bank- 
ing, savings  and  loan,  or  building  and  loan  com- 


647 

panies,  or  to  foreign,  co-operative  or  investment 
companies  organized  to  sell  certificates  or  deben- 
tures on  the  installment  or  partial  payment  plan, 
or  companies  doing  business  on  the  service  divi- 
dend plan,  who  have  deposited  with  the  treasury 
of  the  State  of  Ohio  security  satisfactory  to  him 
of  the  value  of  not  less  than  twenty-five  thousand 
dollars,  and  who  shall  annually  thereafter  deposit 
securities  equal  in  value  to  ten  per  cent,  of  the 
gross  receipts  on  the  amount  of  business  done  in 
Ohio  for  the  preceding  year,  until  the  whole 
amount  so  deposited  has  reached  the  sum  of  one 
hundred  thousand  dollars,  for  the  protection 
of  the  holders  of  said  certificates  or  deben- 
tures, or  to  express,  telegraph,  telephone, 
railroad,  sleeping  car,  transportation  or  other 
corporations  engaged  in  Ohio  in  interstate 
commerce  business;  or  to  foreign  corporations 
entirely  non-resident,  soliciting  business,  or  mak- 
ing sales,  in  this  State  by  correspondence  or  by 
traveling  salesmen.  Any  foreign  corporation 
shall  have  the  right,  on  application,  to  be  heard 
by  the  Secretary  of  State,  touching  the  matter  of 
the  determination  of  the  proportion  of  its  capital 
stock  represented  by  property  used  and  business 
done  in  Ohio.  Any  corporation  aggrieved  by  the 
decision  of  the  Secretary  of  State  may,  within  ten 
days,  appeal  to  the  auditor  of  State,  the  treasurer 
of  State  and  the  attorney-general,  whose  decision 
in  the  matter  shall  be  final.  Every  foreign  cor- 
poration subject  to  the  provisions  of  this  section 
which  shall  neglect  or  fail  to  comply  with  its 
requirements  shall  be  subject  to  a  penalty  of  one 
thousand  dollars,  and  an  additional  penalty  of 
one  thousand  dollars  (for)  every  month  that  it  con- 
tinues to  transact  any  business  in  Ohio,  without 
complying  with  the  requirements  of  this  section, 
to  be  recovered  by  action  in  the  name  of  the  State, 
and  on  collection,  paid  into  the  State  treasury 
to  the  credit  of  the  general  revenue  fund.  The 
attorney-general,  on  the  request  of  the  secretary 


648 

of  State,  shall  institute  such  action  in  the  court 
of  common  pleas  of  Franklin  County,  or  in  any 
county  in  which  such  corporation  has  an  office  or 
place  of  business  as  he  prefers.  The  governor  and 
secretary  of  State,  on  good  cause  shown,  may,  in 
their  discretion,  remit  the  penalty,  or  any  part 
thereof,  prescribed  in  this  section.  No  foreign 
corporations  subject  to  the  provisions  of  this  sec- 
tion shall  maintain  any  action  in  this  State  upon 
any  contract  made  by  it  in  this  State  after  the 
time  fixed  by  this  act  for  compliance  by  such  cor- 
poration with  its  requirements,  until  it  shall  have 
complied  with  the  requirements  of  this  act,  and 
procured  the  requisite  certificate  from  the  secre- 
tary of  State.  Every  corporation  which  has  filed 
its  statement  and  paid  the  privilege  tax  under 
this  section,  and  which  thereafter  shall  increase 
the  proportion  of  its  capital  stock,  represented  by 
property  used  and  business  done  in  Ohio,  shall, 
within  thirty  days  after  such  increase,  file  an  addi- 
tional statement  with  the  secretary  of  State,  and 
pay  a  fee  of  one-tenth  of  one  per  cent,  upon  the 
amount  of  its  increase  of  its  capital  stock,  repre- 
sented by  property  owned  or  business  done  in 
Ohio.  All  fees  collected  by  the  secretary  of  State 
under  this  section  shall  be  paid  by  him  into  the 
State  treasury  to  the  credit  of  the  general  revenue 
fund.  Every  corporation  subject  to  the  provi- 
sions of  this  section  which  complies  with  its  re- 
quirements, shall  not  be  subject  to  process  of  at- 
tachment under  section  5521,  Revised  Statutes,  or 
any  law  of  Ohio  upon  the  ground  that  it  is  a 
foreign  corporation  or  a  non-resident  of  this 
State.  No  person  shall  be  required  to  list  for  tax- 
ation any  share  or  shares  of  the  capital  stock  of 
any  Ohio  corporation.  No  person  shall  be  re- 
quired to  list  for  taxation  any  share  or  shares  of 
the  capital  stock  of  any  foreign  corporation,  the 
property  of  which  is  taxed  in  the  name  of  such 
company  in  Ohio,  nor  shall  any  person  be  re- 
quired to  list  for  taxation  any  share  or  shares  of 


[  649 

the  capital  stock  of  any  foreign  corporation.  If 
satisfactory  proof,  when  demanded,  is  furnished 
to  the  taxation  authorities  by  the  holder  of  such 
share  or  shares  that  two-thirds  or  more  of  the 
property  of  such  corporation  is  taxed  in  Ohio  and 
the  remainder  is  taxed  in  some  other  State  or 
States  of  the  United  States;  provided,  however, 
that  this  shall  not  apply  to  shares  in  any  foreign 
corporation  unless  it  shall,  whether  otherwise  re- 
quired by  law  to  do  so  or  not,  pay  annually  for 
the  privilege  of  exercising  its  franchise  in  Ohio, 
upon  its  entire  authorized  capital  stock,  the  same 
percentage  as  is  required  by  law  on  the  subscribed 
or  issued  capital  stock  of  domestic  corporations 
for  profit. ' ' 

An  act  of  April  25,  1904  (Ohio),  also  provides  for 
foreign  corporations  retiring  from  business  within  the 
State.  (Session  Laws,  Ohio,  1904,  page  383.) 

The  provisions  of  the  Pennsylvania  law  taxing  for- 
eign corporations  are  set  out  in  my  opinion  of  October 
7,  1901,  in  answer  to  the  query  of  the  N.  K.  Fairbank 
Company,  to  which  opinion  I  refer. 

The  provisions  of  the  Pennsylvania  law  requiring 
foreign  corporations  to  file  a  statement,  etc.,  are  re- 
ferred to  in  my  opinion  of  July  20,  1901,  in  answer  to 
the  query  of  Sanford  Manufacturing  Company,  to 
which  opinion  I  refer. 

It  is  also  provided  in  the  constitution  of  Pennsyl- 
vania (Art.  16,  Sec.  5)  that 

"No  foreign  corporation  shall  do  any  business 
in  this  State  without  having  one  or  more  known 
places  of  business  and  an  authorized  agent  or 
agents  in  the  same,  upon  whom  process  may  be 
served. ' ' 

HOW  TO  COMPLY  WITH  THE  FOREIGN   CORPORATION  LAW    OF 
INDIAN  TERRITORY. 

(Eock  Island  Plow  Company,  July  13, 1905.) 

"We  are  very  much  interested  in  the  opinion  of 
Mr.  Mayer  with  regard  to  the  foreign  corporation 


650 
j« 

law  of  Indian  Territory  and  would  like  to  have 
him  furnish  us  information  as  to  how  the  law  can 
be  complied  with,  since  it  would  seem  from  a  re- 
cent decision  of  Judge  Raymond,  an  abstract  of 
which  is  taken  from  the  Kansas  City  Journal  of 
May  22,  there  is  no  one  officially  in  the  Indian  Ter- 
ritory with  whom  a  copy  of  our  charter  can  be 
filed  or  with  whom  we  can  otherwise  comply  with 
the  corporation  laws  effecting  foreign  corpora- 
tions, therefore  the  question  arises  as  to  whether 
or  not  there  is  such  an  official  in  each  of  the  sev- 
eral nations  that  go  to  make  up  the  Territory,  or 
is  it  necessary  to  file  proper  papers  and  appoint  a 
resident  agent  at  each  of  the  several  recording 
points  in  the  Territory.  By  reference  to  any  late 
map  you  will  note  that  the  Indian  Territory  is  cut 
up  into  districts,  the  same  being  numbered  from  1 
to  26,  and  each  of  these  districts  seem  to  have  a 
recording  place,  which  we  assume  perhaps  cor- 
respond to  the  county  seats  of  regularly  organized 
States." 

The  clipping  referred  to  states  that  in  a  suit  brought 
by  the  T.  H.  Rogers  Lumber  Company  against  A.  S. 
McRae  to  collect  for  material  furnished  the  defendant 
by  the  Lumber  Company,  Judge  Raymond  of  the  Court 
of  Appeals  of  Indian  Territory  held  that  suit  could 
not  be  maintained  because  the  T.  H.  Rogers  Lumber 
Company  was  a  foreign  corporation,  doing  business  in 
Indian  Territory,  and  had  failed  to  open  an  office  and 
maintain  an  agent  at  South  McAlester.  I.  T.,  where 
the  articles  of  incorporation  for  Indian  Territory  were 
filed. 

The  opinion  referred  to  has  not  yet  been  published, 
and  I  must  rely  solely  upon  the  newspaper  statement. 
In  my  former  opinion  of  March  17,  1905,  to  the  Rub- 
ber Paint  Company,  in  reference  to  the  Foreign  Cor- 
poration Law  of  Indian  Territory,  I  gave  a  synopsis 
of  the  Act  of  Congress  which  adopted  that  law. 

Sees.  4  and  5  of  the  Act  of  Congress  of  Feb.  18,  1901 
<ch.  379,  31  Stat.  L.,  795),  provide  as  follows: 

"Sec.  4.     That  before  any  foreign  corporation 


651 

shall  begin  to  carry  on  business  in  the  Indian  Ter- 
ritory, it  shall,  by  its  certificate,  under  the  hand 
of  the  president  and  seal  of  such  company,  filed 
in  the  office  of  the  clerk  of  the  United  States  Court 
of  Appeals  for  the  Indian  Territory,  designate  an 
agent,  who  shall  reside  where  the  United  States 
Court  of  Appeals  for  the  Indian  Territory  is  held, 
upon  whom  service  of  summons  and  other  process 
may  be  made.  Such  certificate  shall  also  state  the 
principal  place  of  business  of  such  corporation  in 
the  Indian  Territory.  Service  upon  such  agent 
shall  be  sufficient  to  give  jurisdiction  over  such 
corporation  to  any  of  the  United  States  courts  for 
the  Indian  Territory.  If  any  such  agent  shall  be 
removed,  resign,  die  or  remove  from  the  Indian 
Territory,  or  otherwise  become  incapable  of  act- 
ing as  such  agent,  it  shall  be  the  duty  of  such  cor- 
poration to  appoint  immediately  another  agent  in 
his  place,  as  hereinbefore  provided. 

Sec.  5.  That  if  any  foreign  corporation  shall 
fail  to  comply  with  the  provisions  of  the  foregoing 
sections,  all  its  contracts  with  citizens  and  resi- 
dents of  the  Indian  Territory  shall  be  void  as  to 
the  corporation,  and  no  United  States  court  in  the 
Indian  Territory  shall  enforce  the  same  in  favor 
of  the  corporation. ' ' 

It  will  be  observed  that  this  Act  requires  the  foreign 
corporation  to  designate  an  agent  who  shall  reside 
where  the  United  States  Court  of  Appeals  for  Indian 
Territory  is  held.  The  Court  of  Appeals  meets  at 
South  McAlester.  All  that  is  necessary,  therefore,  is 
for  the  foreign  corporation  to  designate  an  agent  at 
South  McAlester,  I.  T.,  upon  whom  service  of  process 
may  be  had.  This  will  fully  meet  the  requirements  of 
the  law.  The  certificate  must  also  designate  the  prin- 
cipal place  of  business  in  the  Territory. 


652 


WHETHER  AN  ACTION  MAY  BE  MAINTAINED  IN  NEW  YOEK 
WITHOUT  COMPLYING  WITH  THE  FOREIGN  CORPORATION 
LAW. 

(Comptograph  Company,  July  13,  1905.) 

' '  Our  company  has  its  factory  and  main  office  in 
Chicago.  We  have  in  New  York  a  sales  agent, 
whom  we  will  call  Jones.  This  agent  covers  the 
State  of  New  York  as  his  territory,  and  employed 
in  the  city  of  Buffalo  a  sub-agent,  whom  we  will 
call  Smith.  We  did  not  know  Smith  in  any  way, 
but  dealt  only  with  our  agent,  Jones.  On  Decem- 
ber 15th  last  Smith  sold  to  the  firm  of  White  & 
Co.  one  of  our  machines  at  $400.  Bill  was  ren- 
dered on  our  billhead,  of  which  we  enclose  you  a 
blank.  Note  that  same  specifies  distinctly,  'Make 
all  remittances  to  company  at  Chicago.'  Guaran- 
tee was  also  sent  with  bill,  of  which  we  enclose  you 
a  blank.  Note  that  the  guarantee  states  distinctly 
that  'it  will  be  countersigned  when  sent  with  check 
to  the  general  office  of  the  Comtograph  Company 
at  Chicago.' 

As  a  special  concession,  White  &  Co.  were  given 
ninety  days'  time  on  the  bill  and  'terms  ninety 
days'  was  endorsed  upon  same.  This  bill  was, 
therefore,  due  on  March  15th.  On  March  24th 
we  wrote  White  &  Co.,  calling  their  attention  to 
the  fact  that  the  account  had  not  been  paid  and 
asking  their  remittance. 

On  March  1st  our  agent  Jones  discharged  his 
sub-agent  Smith.  On  or  about  April  3d  the  firm 
of  White  &  Co.  made  an  arrangement  with  this 
Smith  by  which  Smith  took  off  their  hands  a  sec- 
ond-hand machine  of  another  make,  and  they  paid 
to  Smith,  they  claim,  the  balance  due  upon  our 
bill.  Understand  that  the  sale  was  made  by  us 
net  straight. 

White  &  Co.  now  refuse  to  pay  our  account. 
Smith  has  left  for  parts  unknown.  We  are  ad- 
vised by  a  New  York  attorney  that  we  can  not  sue 
White  &  Co.  to  recover  our  account,  owing  to  the 


653 

fact  that  we  have  never  received  authority  from 
the  State  of  New  York  to  do  business  in  that 
State.  As  a  matter  of  fact,  we  had  no  knowledge 
that  such  authority  was  required  in  New  York, 
having  never  received  notification  in  any  shape  or 
manner  from  the  New  York  State  officials. 

We  might  add  that  the  machine  in  question  was 
shipped  from  here  by  us  on  November  25th  to 
Smith  upon  the  order  of  our  agent  Jones.    Ma- 
chine was  delivered  to  White  &  Co.  by  Smith,  he 
having  previously  received  an  order  or  request 
from  them  to  have  such  machine  sent  for  their 
trial  and  approval.    It  proving  acceptable  to  them, 
bill  was  rendered,  as  stated  above,  December  15th. 
We  should  like  an  opinion  as  to  whether  or  not 
the  above  point  as  to  our  ability  to  bring  suit  in 
New  York  State  is  a  good  one." 
I  understand  that  the  question  upon  which  my  opin- 
ion is  desired  is  not  whether  the  company  has  a  cause 
of  action  against  White  &  Company,  upon  the  facts 
stated,  but  whether  an  action  may  be  maintained  in 
the  State  of  New  York  (without  complying  with  the 
foreign  corporation  law  of  that  state). 

As  frequently  stated  in  my  opinions  to  the  associ- 
ation, a  foreign  corporation  need  not  comply  with  the 
laws  of  the  various  states,  governing  foreign  corpora- 
tions, unless  such  corporation  is  carrying  on  business 
within  the  particular  state.  If  the  business  of  the  cor- 
poration constitutes  interstate  commerce,  it  is  within 
the  protection  of  the  commerce  clause  of  the  Federal 
Constitution,  and  beyond  the  power  of  the  state  to 
regulate.  The  question  to  determine,  therefore,  is 
whether  the  business  carried  on  by  the  Comptograph 
Company  in  New  York  is  within  the  protection  of  the 
commerce  clause.  In  this  connection  I  assume  (al- 
though the  facts  are  not  stated),  that  the  Comptograph 
Company  carries  no  stock  goods  in  New  York ;  that  its 
dealings  with  White  &  Co.  were  characteristic  of  its 
operations  in  that  state;  that  the  contracts  made  by 
its  agents  were  filled  by  shipments  from  Chicago,  and 
that  the  company  merely  maintains  an  office  in  New 


654 

York  for  the  solicitation  of  orders,  and  as  headquar- 
ters for  its  traveling  salesmen. 

As  above  stated,  the  statutes  of  New  York  which 
prohibit  a  foreign  corporation  from  bringing  suit  with- 
out first  having  complied  with  their  provisions,  refer 
only  to  such  corporations  "doing  business"  in  New 
York. 

See  Tax  Law,  Sec.  181  (Laws  1896,  p.  856,  C.  908,  as 
amended  by  laws  1901,  p.  1364,  C.  558) ;  and  General 
Corporation  Law,  Sec.  15,  (Laws  1892,  p.  1805,  C.  687, 
as  amended  by  Laws  1901,  p.  1327,  C.  538). 

And  any  extension  of  such  statutory  prohibition  to 
corporations  engaged  solely  in  interstate  commerce 
would  be  an  invasion  of  the  exclusive  right  of  Con- 
gress, and  consequently  void. 

McNaughton  V.  McGirl,  20  Montana,  124;  49 
Pac.,  657 ;  38  L.  E.  A.,  367. 

On  the  facts  above  stated  I  am  of  the  opinion  that 
the  Comptograph  Company  is  not  "doing  business" 
in  New  York,  and  it  need  not  therefore  comply  with 
the  statutes  of  that  state  concerning  foreign  corpora- 
tions. 

Vaughan  Machine  Co.  v.  Lighthouse,  71  N.  Y. 
Sup.,  799. 

I  refer  also  to  my  opinion  of  December  13,  1902,  in 
answer  to  the  query  of  the  C.  W.  Shonk  Company. 

The  fact  that  machines  are  sent  on  approval,  so  that 
title  of  them  does  not  pass  until  delivery  to  consignee, 
does  not  alter  the  case. 

Greek  American  Sponge  Co.  v.  Drug  Co.,  102 
N.  W.  Rep.,  888  (Wis.). 

TAXATION  OF  GOODS  HELD  IN  A  WAREHOUSE,  AFTER  REACH- 
ING DESTINATION  WHEN  SHIPPED  FOR  THE  PURPOSE  OF 
BEING  RESOLD. 

(W.  A.  Havemeyer  &  Co.,  July  15,  1905.) 

"We  would  like  to  have  an  opinion  in  regard  to 

the  following:  A  Chicago  merchant  shipped  a  car 

of  goods  to  Davenport,  Iowa,  the  goods  being  sold 

before  the  car  was  ordered  shipped.    On  arrival 


655 

of  the  goods  about  one-tenth  of  the  car  was  re- 
jected, owing  to  the  decline  in  price,  and  for  this 
reason  were  stored  in  a  warehouse  until  such  time' 
as  the  company's  salesman  could  come  to  the  town 
and  arrange  to  resell  them. 

We  think,  perhaps  that  the  Davenport  jobbers 
do  not  care  to  have  the  Chicago  merchants  come" 
into  their  territory,  and  for  this  reason  endeav- 
ored to  hinder  them  in  every  way. 

A  tax  collector  came  to  this  warehouse  and  told 
the  warehouse  people  that  they  had  goods  for  such 
and  such  a  Chicago  firm  which  he  wished  to  tax, 
and  immediately  charged  them  on  the  basis  of 
$3,000,  which  is  about  $1,000  more  than  the  whole 
car  is  worth.  They  complained  in  regard  to  the 
warehouseman  and  he  saw  the  tax  commissioner 
there,  who  stated  that  as  they  had  goods  there  that 
were  taxable  they  must  file  a  schedule  or  else  be 
taxed  according  to  the  way  he  saw  fit. 

Under  the  circumstances,  do  you  consider  that 
these  goods  are  taxable?" 

A  tax  on  goods  and  commodities  transported  into  a 
state  or  out  of  it,  or  a  tax  upon  the  owner  of  such 
goods  for  the  right  so  to  transport  them  is  a  regulation 
of  interstate  commerce  which  is  exclusively  within  the 
province  of  Congress.  But  after  the  goods  have  ar- 
rived in  the  State  and  become  mingled  with  and  part 
of  the  general  mass  of  property  in  the  State,  they  may 
be  taxed  in  the  same  manner  that  other  similar  prop- 
erty in  the  State  is  taxed,  although  they  have  been  im- 
ported from  other  states  or  from  foreign  countries. 

17  Am.  &  Eng.  Ency.  (2d  Ed.),  113,  and  cases 

cited. 

Merchandise  which  remains  in  the  original  packages 
after  it  has  been  sold,  or  where  the  original  packages 
have  been  broken,  is  taxable  by  the  State  to  the  same 
extent  as  other  property;  otherwise  it  is  not. 

Waring  v.  Mayer,  8  Wall.,  122. 
Goods  in  transportation  through  the  State,  though 
detained  for  a  time,  are  under  the  protection  of  the 
Federal  Constitution,  and  are  therefore  not  taxable. 


656 

Coe  v.  Errol,  116  U.  S.,  525. 

Am.  St.  &  Wire  Co.  v.  Speed,  192  U.  S.,  500. 
So  property  which  is  delayed  within  the  State  merely 
for  reshipment  has  no  situs  within  the  State  for  the 
purpose  of  taxation. 

State  v.  Carrigan,  39  N.  J.  L.,  35. 
And  in  Kelley  v.  Rhoads,  188  U.  S.,  1,  it  was  held 
that  a  flock  of  10,000  sheep  which  was  being  driven 
from  the  territory  of  Utah  by  a  direct  route  across  the 
State  of  Wyoming  to  the  State  of  Nebraska  at  the 
rate  of  about  nine  miles  per  day,  is  the  subject  of  in- 
terstate commerce,  and  exempt  from  taxation  under 
the  statute  of  Wyoming,  which  provides  for  the  taxing 
of  live  stock  brought  into  the  State  for  grazing  pur- 
poses, although  the  sheep  may,  while  actually  in  tran- 
sit, have  been  permitted  incidentally  to  support  them- 
selves by  grazing  over  land  one-fourth  of  a  mile  in 
width,  and  even  though  they  might  have  been  trans- 
ported by  rail. 

Personal  property  may  be  taxed  wherever  found, 
irrespective  of  the  domicile  or  citizenship  of  the  owner. 

Pullman  Co.  v.  Pennsylvania,  141  U.  S.,  22. 

Savings  <&  Loan  Co.  v.  Mutlnomah  Co.,  169  U. 
S.,  427. 

Bristol  v.  Washington  Co.,  177  U.  S.,  145. 
From  the  facts  stated  I  am  of  the  opinion  that  the 
goods  in  this  case  had  acquired  a  situs  within  the  State, 
and  could  properly  be  taxed  by  the  Iowa  authorities. 
The  transit  through  the  State  of  Iowa  was  broken  and 
the  goods  had  found  a  resting  place  within  the  State. 
They  were  in  the  warehouse  for  the  purpose  of  re-sale, 
and  they  thus  became  mingled  with  the  mass  of  prop- 
erty within  the  State,  and  the  protection  of  the  com- 
merce clause  therefore  ceased. 

Brown  v.  Houston,  114  U.  S.,  622. 

Bobbins  v.  Shelby,  120  U.  S.,  489. 
To  the  same  effect  see  the  authorities  referred  to  in 
my  opinion  of  October  23,  1903,  in  answer  to  the  query 
of  Deere  &  Co.  If  the  assessment  is  unreasonable  or 
excessive,  complaint  may  be  made  to  the  proper  offi- 
cials in  accordance  with  the  laws  of  Iowa. 


657 


IN  REFERENCE  TO  THE  ARREST  AND  PROSECUTION  OF  PICKETS 
DURING  A  STRIKE,  UNDER  THE  LAW  OF  ILLINOIS. 

(Chicago  Flexible  Shaft  Company,  July  15,  1905.) 

' '  Referring  to  our  conversation  over  the  'phone 
this  afternoon  with  reference  to  pickets  at  our 
place,  we  should  very  much  like  to  be  informed  if 
we  can  legally  cause  the  arrest  of  pickets  who  stop 
teamsters  from  delivering  goods  to  us,  and  on 
what  grounds  we  could  prosecute  such  pickets. 
We  have  had  a  little  trouble  along  this  line  lately 
and  should  like  to  take  some  action  to  stop  same. 
Any  information  you  can  give  us  will  be  very 
greatly  appreciated. ' ' 

In  a  decision  rendered  July  12,  1905,  by  Judge  Mc- 
Pherson  of  the  United  States  District  Court  at  Des 
Moines,  Iowa,  punishing  pickets  for  contempt  for  vio- 
lation of  an  injunction,  the  court  stated:  "Picketing 
is  as  bad  as  lynching." 

Chicago  Evening  Journal,  July  12,  1905. 
In  my  opinion  of  November  10,  1904,  to  the  Illinois 
Malleable  Iron  Company,  and  of  April  17,  1905,  to  the 
La  Bastie  Glass  Company,  I  discussed  the  granting  of 
injunctions  to  restrain  picketing  by  labor  unions,  to 
which  opinions  I  refer. 

It  is  to  be  noted  that  on  June  23,  1905,  the  Illinois 
Supreme  Court,  in  O'Brien  v.  People,  216  111., 
354,  affirmed  the  decision  of  the  Appellate  Court, 
Christensen  v.  People,  114  111.  App.,  40,  which 
upheld  Judge  Holdom  of  the  Circuit  Court  of  Cook 
County,  in  punishing  by  imprisonment  for  contempt 
the  violators  of  the  injunction  which  he  issued  to  re- 
strain picketing,  intimidation,  interference,  etc.,  in  con- 
nection with  the  strike  at  the  plant  of  the  Kellogg 
Switchboard  &  Supply  Company.  The  decision  is  im- 
portant and  of  far  reaching  consequences,  and  firmly 
settles  the  law  in  Illinois  on  this  important  question. 
And  the  court  in  this  case  held  also  that  any  attempt 
to  compel  another  to  execute  an  agreement  to  conduct 
his  business  through  certain  agencies  or  by  a  particu- 


658 

lar  class  of  employes  (e.  g.,  members  of  a  trade  union), 
is  not  only  unlawful  and  actionable,  but  is  an  inter- 
ference with  the  exercise  of  the  right  of  liberty  and  of 
property  and  a  violation  of  the  constitution. 

In  addition  to  the  remedy  by  injunction,  the  Illinois 
Criminal  Code  on  Intimidation  provides  as  follows: 

"294.  If  any  two  or  more  persons  shall  com- 
bine for  the  purpose  of  depriving  the  owner  or 
possessor  of  property  of  its  lawful  use  and  man- 
agement, or  of  preventing,  by  threats,  suggestions 
or  danger  or  any  unlawful  means,  any  person  from 
being  employed  by  or  obtaining  employment  from 
any  such  owner  or  possessor  of  property,  on  such 
terms  as  the  parties  concerned  may  agree  upon 
such  person  so  offending  shall  be  fined  not  ex- 
ceeding $500,  or  confined  in  the  county  jail  not  ex- 
ceeding six  months. 

295.  If  any  person  shall,  by  threats,  intimida- 
tion or  unlawful  interference,  seek  to  prevent  any 
other   person   from   working   or   from   obtaining 
work  at  any  lawful  business,  on  any  terms  that  he 
may  see  fit,  such  persons  so  offending  shall  be 
fined  not  exceeding  $200. 

296.  Whoever  enters  a  coal  bank,  mine,  shaft, 
manufactory,  building  or  premises  of  another  with 
intent  to  commit  any  injury  thereto,  or  by  means 
of  threats,  intimidation  or  riotous  or  other  unlaw- 
ful doings,  to  cause  any  person  employed  therein 
to  leave  his  employment,  shall  be  fined  not  exceed- 
ing $500,  or  confined  in  the  county  jail  not  exceed- 
ing six  months,  or  both." 

If  the  facts  in  the  particular  case  are  strong  enough 
to  warrant  it,  an  arrest  of  the  parties  might  be  made 
under  these  provisions  of  the  criminal  code.  Pickets 
may,  if  using  threats  and  intimidation,  also  be  arrested 
for  disorderly  conduct  under  the  provisions  of  the 
Municipal  Code  of  Chicago.  An  injunction  will  lie  and 
an  action  for  damages. 


659 


THE  FOREIGN  CORPORATION  LAW  OF  NEW  MEXICO  AND  THE 
NECESSITY  OF  COMPLIANCE  THEREWITH  AND  WHAT 
CONSTITUTES  " DOING  BUSINESS." 

(Oliver  Typewriter  Company,  July  19,  1905.) 
"Our  attention  has  recently  been  called  to  the 
general  corporation  law  passed  March  5,  1905, 
by  the  Legislature  of  New  Mexico.  It  provides, 
we  understand,  that  no  foreign  corporation  can 
maintain  any  action  in  that  territory  upon  any 
contract  made  by  it  in  that  territory  until  such 
corporation  has  received  from  the  Secretary  of 
the  Territory  a  certificate  that  it  is  authorized  to 
transact  business  therein.  It  also  provided,  we 
believe,  that  every  foreign  corporation  transacting 
any  business  in  any  manner  whatsoever,  directly 
or  indirectly  in  that  territory,  without  authority, 
shall  forfeit  the  sum  of  $200.00. 

Probably  many  of  the  members  of  your  associ- 
ation would  be  interested  in  the  opinion  of  your 
general  counsel  on  the  law  in  question. ' ' 
The  law  referred  to  is  "An  act  to  regulate  the  for- 
mation and  government  of  corporations  for  mining, 
manufacturing,   industrial   and   other  pursuits,"   ap- 
proved March  15,  1905.     (Ch.  79,  Laws  of  1905,  New 
Mexico.) 

Article  10  of  this  act  relates  to  foreign  corporations. 
Section  99  provides  that  foreign  corporations  may 
hold  and  convey  lands  in  the  territory  of  New  Mexico. 
Sec.  100  provides  that  foreign  corporations  may  ac- 
quire, owTn  and  dispose  of  real  estate  in  New  Mexico 
subject  to  such  limitation  as  may  be  prescribed  by 
the  acts  of  Congress   while  it  remains   a  territory, 
and  by  the  constitution  after  it  becomes  a  State. 
Sees.  101,  102  and  103  provide : 

1 1  Sec.  101.  Foreign  corporations  subject  to  this 
act.  Foreign  corporations  doing  business  in  this 
territory  shall  be  subject  to  the  provisions  of  this 
act,  so-  far  as  the  same  can  be  applied  to  foreign 
corporations.  Foreign  corporations,  including 


660 

railroad  and  telegraph  corporations,  having  com- 
plied with  the  law,  shall  have  the  same  powers  and 
be  subject  to  all  liabilities  and  duties  as  corpora- 
tions of  a  like  character  organized  under  the  laws 
of  this  territory;  but  they  shall  have  no  other  or 
greater  powers.  And  no  foreign  or  domestic  cor- 
poration established  or  maintained  in  any  way 
for  pecuniary  profit  of  its  stockholders  or  members 
shall  purchase  or  hold  real  estate  in  this  territory 
except  as  provided  in  this  act  and  the  laws  of 
the  territory  now  existing,  and  no  corporation 
doing  business  in  this  territory,  incorporated 
under  the  laws  of  any  other  State  or  territory, 
shall  be  permitted  to  mortgage,  pledge  or  other- 
wise encumber  its  real  or  personal  property  situ- 
ated in  this  territory,  to  the  injury  or  exclusion 
of  any  citizen,  citizens  or  corporations  of  this  ter- 
ritory who  are  creditors  of  such  foreign  corpora- 
tion and  no  mortgage  by  any  foreign  corporation, 
except  railroad  and  telegraph  companies,  given  to 
secure  any  debt  created  in  any  other  State  shall 
take  effect  as  against  any  citizen  or  corporation 
of  this  territory  until  all  its  liabilities  due  to  any 
person  or  corporation  in  this  territory  at  the  time 
of  recording  such  mortgage  have  been  paid  and 
extinguished. 

Sec.  102. — Foreign  corporations  to  file  copy 
of  Charter,  Statement,  etc.,  before  commencing 
business. 

Every  foreign  corporation,  except  banking,  in- 
surance and  railroad  corporations,  before  trans- 
acting any  business  in  this  territory,  shall  file  in 
the  office  of  the  secretary  of  the  territory  a  copy 
of  its  charter,  or  certificate  of  incorporation,  cer- 
tified by  the  proper  authority  of  the  territory, 
State  or  country  of  its  creation,  and  a  statement 
of  the  amount  of  its  capital  stock  authorized  and 
the  amount  actually  issued,  the  character  of  the 
business  which  it  is  to  transact  in  this  territory, 
and  designating  its  principal  office  in  this  territory 
and  an  agent  who  shall  be  a  domestic  corporation 


661 

or  a  natural  person  of  full  age  actually  resident 
in  this  territory,  together  with  his  place  of  abode, 
upon  which  agent  process  against  said  corporation 
may  be  served,  and  the  agency  so  constituted  shall 
continue  until  the  substitution,  by  writing,  of  an- 
other agent ;  upon  the  filing  of  such  copy  and  state- 
ment, the  secretary  of  the  territory  shall  issue  to 
such  corporation  a  certificate  that  it  is  authorized 
to  transact  business  in  this  territory,  and  that  the 
business  is  such  as  may  be  lawfully  transacted  by 
corporations  of  this  territory,  and  he  shall  keep  a 
record  of  all  such  certificates  issued. 

Sec.  103. — Can  not  maintain  action  until  cer- 
tificate of  secretary  of  the  territory  is  obtained. 

Until  such  corporation  so  transacting  business 
in  this  territory  shall  have  obtained  said  certifi- 
cate from  the  secretary  of  the  territory,  it  shall 
not  maintain  any  action  in  this  territory,  upon  any 
contract  made  by  it  in  this  territory;  provided, 
that  nothing  herein  shall  prevent  the  enforcement 
of  any  contract  made  prior  to  the  passage  of  this 
act,  which  it  could  have  enforced  prior  thereto." 
Sec.    104  provides   that   upon   the   disqualification, 
death  or  removal  of  the  agent  of  the  foreign  corpora- 
tion in  the  territory  another  agent  shall  be  appointed. 
Sec.  105  provides : 

"Sec.  105. — Unlawful  to  transact  business  until 
authority  is  obtained. 

Every  foreign  corporation  transacting  any  busi- 
ness in  any  manner  whatsoever,  directly  or  indi- 
rectly, in  this  territory,  without  having  first  obtain- 
ing authority  therefor,  as  hereinabove  provided, 
shall  for  each  offense  forfeit  to  the  territory  the 
sum  of  two  hundred  dollars,  to  be  recovered  with 
costs  in  an  action  prosecuted  by  the  solicitor  gen- 
eral in  the  name  of  the  territory. ' ' 
Sec.   106  provides   for  attachment  against  foreign 
corporations ;  Sec.  107  for  service  of  prerogative  writs 
against  foreign  corporations;   Sec.   108  for  enforce- 
ment of  writs  upon  failure  of  corporation  to  make 
return. 


662 

Sec.  48,  Ch.  79,  Laws,  1905,  provides  for  annual  re- 
ports of  corporations,  foreign  and  domestic.  Sec.  135, 
Ch.  79,  Laws,  1905,  provides : 

"Every  corporation,  domestic  or  foreign,  shall 
within  thirty  days  from  the  date  of  the  filing  of  its 
articles  of  incorporation  with  the  secretary  of  the 
territory,  cause  to  be  published  (one  insertion 
only  required)  a  certified  copy  of  its  articles  of 
incorporation  in  some  newspaper  of  general  cir- 
culation in  the  county  where  its  principal  New 
Mexico  office  is  designated. 

A  certificate  of  such  publication,  properly  sworn 
to  by  the  publisher,  shall  be  filed  with  the  secre- 
tary of  the  territory  within  twenty  days  after  the 
date  of  publication." 

Filing  fees  are  also  provided  for  by  this  act. 
It  is  to  be  noted  that  in  this  act,  excepting  as  to  the 
provisions  of  Sees.  99,  100,  applies  only  to  foreign  cor- 
porations doing  business  in  the  territory.  What  con- 
stitutes doing  business  has  been  discussed  at  length  in 
my  opinions  on  the  subject  of  foreign  corporations. 
Since  the  rendition  of  these  opinions,  the  case  of  Barn- 
hard  Bros.  &  Spindler  v.  Morrison,  87  S.  W.  376 
(Texas,  May  24,  1905),  has  been  decided.  It  was  there 
held  that  a  foreign  corporation  which  manufactures 
and  deals  in  goods  which  are  the  subject  of  commerce, 
may  send  its  agents  into  the  State  of  Texas  to  solicit 
orders,  for  the  sale  of  such  goods  without  complying 
with  the  Texas  laws  requiring  foreign  corporations  to 
procure  a  permit  to  do  business  from  the  Secretary  of 
State  as  a  condition  of  bringing  suit  on  demands  aris- 
ing in  the  State;  but,  a  foreign  corporation  could  not 
ship  its  goods  to  an  agent  in  the  State,  to  be  held  in 
stock  and  offered  for  sale  in  open  market  by  him,  with- 
out complying  with  the  law.  This  decision  would  also 
be  applicable  to  a  similar  course  of  dealing  in  New 
Mexico,  under  the  laws  of  New  Mexico. 

As  I  have  frequently  stated  in  my  prior  opinions 
upon  this  subject,  a  foreign  corporation  has  no  abso- 
lute right  to  do  business  in  a  foreign  State,  but  can 
onlv  do  so  by  virtue  of  the  comitv  of  such  State.  It 


663 

follows,  therefore,  that  the  State  may  impose  such 
conditions  upon  a  foreign  corporation  seeking  to  do 
business  within  its  borders,  as  it  sees  fit. 

I  have  examined  the  provisions  of  the  New  Mexico 
law,  and,  in  my  opinion,  it  is  constitutional.  Whether 
the  Oliver  Company  is  subject  to  the  law,  depends  upon 
its  methods  of  transacting  business  in  New  Mexico. 
The  question  can  doubtless  be  determined  by  reference 
to  my  prior  opinions. 


THE  EFFECT  OF  THE  BULK  SALES  LAW  OF  ILLINOIS  OF  1905 
AND  THE  LIABILITY  OF  AN  ATTACHING  CREDITOR  UNDER 
THE  LAW. 

(John  A.  Tolman  Company,  August  21,  1905.) 

"We  would  very  much  appreciate  the  opinion 
of  the  general  counsel  of  the  association  on  the 
following  matter : 

The  last  legislature  enacted  a  law  entitled,  'An 
act  to  prevent  sales  of  merchandise  in  fraud  of 
creditors,'  by  which  it  is  provided  that  unless  the 
notice  required  by  the  statute  is  given  that  sales 
of  merchandise  in  bulk  shall  be  presumed  to  be 
fraudulent.  We  understand  that  in  other  jurisdic- 
tions where  similar  statutes  have  been  enacted, 
that  the  presumption  of  fraud  in  the  sales  indi- 
cated is  rebuttable  and  we  desire  to  know  whether 
the  rule  of  damages  has  by  this  law  been  in  any 
way  changed.  In  other  words,  if  a  creditor  in  the 
case  of  a  bulk  sale  made  without  the  statutory 
notice,  attaches,  and  the  purchaser  is  able  to  show 
good  faith  and  valuable  consideration,  will  the 
attaching  creditor,  under  these  circumstances,  be 
liable  to  the  purchaser  for  the  damages  sustained 
by  reason  of  the  attachment?" 

The  statute  in  question  is  entitled  "An  act  to  pre- 
vent sales  of  merchandise  in  fraud  of  creditors,"  ap- 
proved May  13,  1905;  in  force  July  1, 1905  (BradwelPs 
Laws  of  Illinois,  1905,  p.  165).    The  act  is  as  follows: 
"That  a  sale  of  any  portion  of  a  stock  of  mer- 


664 

ckandise,  otherwise  than  in  the  ordinary  course 
of  trade  or  in  the  regular  and  usual  prosecution  of 
the  seller's  business,  or  sale  of  an  entire  stock 
of  merchandise  in  gross,  will  be  presumed  to  be 
fraudulent  and  void  as  against  the  creditors  of  the 
seller  unless  the  seller  and  purchaser  shall,  at 
least  five  days  before  the  sale,  make  a  full  and 
detailed  inventory  showing  the  quantity,  and  so 
far  as  possible  with  the  exercise  of  reasonable 
diligence,  the  cost  price  to  the  seller  of  each  article 
to  be  included  in  the  sale,  and  unless  such  pur- 
.  chaser  shall  at  least  five  days  before  the  sale,  in 
good  faith,  make  full  and  explicit  inquiries  of  the 
seller  as  to  the  names  and  places  of  residence 
or  places  of  business  of  each  and  all  of  the  cred- 
itors of  the  seller  and  the  amount  owing  each  cred- 
itor and  unless  the  purchaser  shall,  at  least  five 
days  before  the  sale,  in  good  faith,  notify  or  cause 
to  be  notified  personally  or  by  registered  mail, 
each  of  the  seller's  creditors  of  whom  the  pur- 
chaser has  knowledge  or  can  with  the  exercise  of 
reasonable  diligence,  acquire  knowledge,  of  said 
proposed  sale  and  of  the  said  cost  price  of  the 
merchandise  to  be  sold  and  of  the  price  proposed 
to  be  paid  therefor  by  the  purchaser.  The  seller 
shall  at  least  five  days  before  such  sale  fully  and 
truthfully  answer  in  writing  each  and  all  said  in- 
quiries. 

(Not  change  rules  of  evidence.)  2.  Except  as 
especially  provided  in  this  act,  nothing  therein  con- 
tained nor  any  act  thereunder,  shall  change  or 
affect  the  present  rules  of  evidence  or  the  present 
presumptions  of  law. ' ' 

/  express  no  opinion  of  the  constitutionality  of  this 
law,  as  that  question  is  not  raised  by  the  present  in- 
quiry. 

The  effect  of  this  law  is  primarily  to  shift  the  burden 
of  proof.  If  the  vendor  does  not  comply  with  the  pro- 
visions of  the  statute  the  sale  is  presumptively  fraudu- 
lent. The  burden  of  proof  is  cast  upon  him  to  show 
that  no  fraud  entered  into  the  transaction.  Previous 


665 

to  the  passage  of  this  act  it  was  incumbent  upon  the 
creditor  to  prove  fraud  in  the  sale  of  a  stock  of  goods 
if  he  wished  to  invalidate  the  transaction,  except  where 
fraud  could  be  conclusively  presumed. 

It  is  to  be  noted  that  the  act  makes  the  sale  merely 
presumptively  fraudulent  if  the  conditions  of  the  act 
are  not  performed.  Under  such  statutes  the  vendor 
or  purchaser  can  rebut  this  presumption  of  fraud 
predicated  upon  failure  to  observe  the  statute  by  show- 
ing that  he  acted  in  good  faith  and  with  diligence,  or 
paid  full  value,  or  any  other  facts  sufficient  to  over- 
come the  prima  facie  case  against  him. 

Fisher  v.  Herrmann,  118  Wis.,  424,  95  N.  "VV., 

392  (1903). 

Hart  v.  Dean,  93  Md.,  432,  49  Atl.,  661  (1901). 
Neas  v.  Borchas,  109  Tenn.,  398,  71  S.  W., 

50  (1902).  ^ 

The  laws  of  Illinois  provide  that  a  creditor  may 
have  an  attachment  against  the  property  of  his  debtor, 
among  other  cases,  where  the  debtor  has  within  two 
years  prior  to  the  filing  of  the  affidavit  fraudulently 
concealed  or  disposed  of  his  property  so  as  to  hinder 
or  delay  his  creditors. 

1903  Revised  Statutes,  175. 

The  effect  of  this  "sale  of  goods  in  bulk"  act  is 
merely  to  shift  the  burden  of  proof,  and  section  2  of 
the  act  expressly  limits  the  effect  of  the  act  on  the 
rules  of  evidence  to  this  change  of  presumption.  A 
creditor  can  attach,  therefore,  under  the  attachment 
act  as  heretofore,  and  if  the  vendor  or  purchaser  or 
person  attached  rebuts  the  presumption  of  fraud  the 
result  as  to  the  attachment  will  be  precisely  the  same 
as  if  previous  to  the  act  the  attaching  creditor  failed 
to  prove  a  fraudulent  transaction.  The  creditor  would 
then  be  liable  on  this  attachment  bond  for  damages. 
In  a  Maryland  case  involving  an  attachment  under 
an  identical  act  (the  Illinois  act  is  copied  from  that  of 
Maryland)  the  court  said: 

"The  violation  of  the  statute  is  evidence  of 
fraud,  but  is  not  conclusive.  The  plaintiff  in  an 
attachment  proceeding  based  on  fraud  is  required 


666 

to  establish  it  in  order  to  sustain  his  attachment. 
A  prima  facie  case  can  be  made  out  by  proving 
a  sale  of  the  stock  of  merchandise  in  bulk  without 
compliance  with  the  provisions  of  the  statute,  and 
the  burden  is  then  on  the  party  claiming  or  inter- 
ested in  the  property  to  overcome  the  presumption 
of  fraud ;  but  that  is  all  it  means. ' ' 

Hart  v.  Dean,  93  Md.,  432 ;  49  Atl.,  661  (1901). 

The  attaching  creditor  will,  therefore,  be  liable  to 

the  purchaser  for  the  damages  sustained  by  reason  of 

an  attachment  under  this  statute  if  the  purchaser  can 

show  that  the  transaction  was  not  fraudulent. 

The  measure  of  damages  to  be  recovered  on  an  at- 
tachment bond  is  the  actual  expenses  and  loss  result- 
ing from  the  attachment,  including  costs  and  expenses 
of  defending  against  the  attachment,  procuring  its  dis- 
charge and  the  restoration  of  the  property,  including 
counsel  fees  for  professional  services  in  relation  to  the 
attachment. 

Damson  v.  Sweetser,  16  111.  App.,  339. 
2  Sutherland  on  Damages,  sees.  512,  516. 

NOTE: — See  the  following  opinion  supplementary  to  the  above. — Ed. 


AS  TO  THE  PRESUMPTION  OF  FRAUD  WHEN  SALES  IN  BULK 
ARE  MADE  WITHOUT  COMPLYING  WITH  THE  ILLINOIS 
BULK  SALES  LAW  OF  1905,  AND  AS  TO  WHETHER  SALES 
SO  MADE  ARE  DEEMED  CONCLUSIVELY  FRAUDULENT  OR 
ONLY  PRIMA  FACIE  FRAUDULENT. 

(John  A.  Tolman  Company,  October  3,  1905.) 

"A  few  days  ago  we  addressed  you  an  inquiry 
for  reference  to  the  general  counsel  of  the  associa- 
tion, relating  to  the  bulk  sales  law  recently  enacted 
in  this  State.  We  have  your  acknowledgment  of 
our  letter,  and  inasmuch  as  we  are  informed  that 
Mr.  Mayer  has  been  out  of  the  city,  thought  there 
might  be  time  to  supplement  our  previous  letter 
by  another  question. 

In  a  case  recently  decided  before  Justice  John 
K.  Prindiville  it  was  decided  that  where  neither 


667 

the  vendor  or  the  vendee  has  made  any  effort  to 
comply  with  the  provisions  of  the  law  either  as  to 
inventory  or  notice,  otherwise,  that  the  presump- 
tion of  fraud  is  not  rebutted  or  rebuttable  by  the 
bona  fides  of  the  transaction,  and  by  such  failure 
on  the  part  of  the  vendor  and  vendee,  to  make  any 
effort  to  comply  with  the  law,  a  conclusive  pre- 
sumption of  fraud  arises. 

We  had  assumed  that  the  presumption  of  fraud 

might  be  rebutted  by  proper  evidence  showing  the 

good  faith  of  the  sale,  but  the  decision  of  Justice 

Prindiville  has  caused  us  to  doubt  our  previous 

conception  of  the  act,  and  we  should  therefore 

be  obliged  if  the  general  counsel  will  supplement 

his  letter  by  covering  this  further  inquiry." 

In  my  opinion  of  August  21,  1905,  to  the  John  A. 

Tolman  Company,  I  discussed  the  "sales  in  bulk  act" 

of  Illinois,  and  to  that  opinion  I  refer. 

The  sales  in  bulk  act  of  this  State  makes  such  sales 
only  presumptively  fraudulent,  if  the  conditions  of  the 
act  are  not  performed.  Under  such  acts  it  has  been 
uniformly  held  that  this  presumption  of  fraud  is  not 
conclusive,  but  is  rebuttable. 

Fisher  v.  Hermanor,  118  Wis.,  424 ;  95  N.  W., 

392. 

Hart  v.  Dean,  93  Md.,  432 ;  49  AtL,  661. 
Neas  v.  Borchas,  109  Tenn.,  398;  71  S.  W.,  50. 
In  Neas  v.  Borchas,  109  Tenn.,  398,  71  S.  "W.,  50 
(1902),  it  appears  that  the  law  of  Tennessee,  as  does 
that  of  Illinois,  provides  that  the  sale  "shall  be  pre- 
sumed to  be  fraudulent  and  void,"  etc.    In  that  case 
neither  the  seller  nor  the  purchaser  had  attempted  to 
comply  with  the  law,  but  the  court  held  that  the  pre- 
sumption of  fraud  was  rebuttable. 

The  law  of  Illinois  is  modeled  after  that  of  Mary- 
land, and  in  Hart  v.  Dean,  93  Md.,  432,  49  Atl.,  661 
(1901),  the  Court  of  Appeals  of  Maryland  held  this 
presumption  of  fraud  to  be  rebuttable  where  the  con- 
ditions of  the  act  were  not  complied  with.  The  court 
there  said  in  reference  to  the  statute : 

' '  It  says  such  sale  l  will  be  presumed  to  be  fraud- 


668 

ulent  and  void'  unless,  etc.  If  the  legislature  has 
intended  that  it  should  be  conclusively  presumed 
to  be  fraudulent,  it  would  doubtless  have  said  so; 
or,  if  it  had  intended  to  prohibit  all  sales  of  stocks 
of  merchandise  in  bulk  unless  these  provisions 
were  complied  with,  it  would  have  used  other  lan- 
guage than  that  to  be  found  in  the  statute.  There 
was  no  reason  for  saying  that  the  sale  'will  be 
presumed  to  be  fraudulent  and  void,'  unless  the 
various  requirements  are  complied  with.  The  lan- 
guage used  not  only  does  not  necessarily  have  that 
meaning,  but  it  suggests  the  contrary.  A  party 
accused  of  crime,  when  put  on  trial,  is  presumed 
to  be  innocent ;  and  in  civil  proceedings  good  faith 
is  presumed,  under  the  ordinary  rules  of  evidence ; 
but  no  one  understands  from  the  use  of  the  word 
'presumed'  in  those  connections  that  the  presump- 
tion cannot  be  overcome  by  proof.  As  we  read 
this  statute,  we  find  that,  instead  of  saying  that 
such  sales  shall  be  fraudulent  and  void,  the  legis- 
lature only  declared  that  they  'will  be  presumed' 
to  be  so,  which  conveys  the  idea  that  they  will  be 
so  considered  until  the  contrary  is  proven.  If 
anything  more  than  the  language  itself  be  neces- 
sary to  justify  the  construction  we  have  placed 
on  it,  section  19  of  this  act  of  1900  furnished  it. 
It  reads:  'Except  as  expressly  provided  in  the 
preceding  section  nothing  therein  contained  nor 
any  act  thereunder  shall  change  or  affect  the  pres- 
ent rules  of  evidence  in  the  present  presumptions 
of  law. '  It  thereby  declared  that  it  was  changing 
or  affecting  'the  present  rules  of  evidence,'  etc. 
Prior  to  the  passage  of  the  act,  the  presumption 
was  that  such  a  transaction  was  bona  fide,  and  the 
burden  was  on  the  one  attacking  it  to  prove  fraud ; 
but  the  statute  shifts  the  burden  of  proof  unless 
its  provisions  are  complied  with.  The  difficulty  in 
proving  fraud  was  doubtless  known  to  the  members 
of  the  legislature,  and  as  those  endeavoring  to  do 
so  were  frequently  without  evidence  unless  they 
made  the  parties  to  the  alleged  fraud  their  wit- 


669 

nesses,  it  is  apparent  that  the  legislature  thought 
it  would  lessen,  if  not  relieve,  the  difficulty  by  cast- 
ing the  burden  on  the  parties  to  establish  the  bona 
fides  of  such  transactions." 
And, 

''The  violation  of  the  statute  is   evidence  of 
fraud  but  not  conclusive. ' ' 

It  is  this  prima  facie  presumption  of  fraud  that  dis- 
tinguishes the  Illinois  law  from  the  laws  of  other 
States  which  have  been  held  unconstitutional.  Thus 
in  several  States  where  the  "sales  of  goods  in  bulk" 
act  declared  that  such  sales  "shall  be  fraudulent  and 
void"  unless  the  provisions  of  this  act  are  complied 
with,  these  acts  have  been  held  to  be  unconstitutional. 
These  acts  attempted  to  declare  that  such  sales  should 
be  conclusively  fraudulent. 

Miller  v.  Crawford,  70  Ohio  St.,  207;  71  N.  E., 

631  (1904). 
Block  v.  Schwartz,  27  Utah,  387;  76  Pac.,  32 

(1904). 
McKinister  v.  Sager,  163  Ind.,  671;  72  N.  E., 

854;  68  L.  E.  A.,  273  (1904). 
Sellars  v.  Hayes,  72  N.  E.,  119  (Ind.,  1904). 
In  the  following  cases,  however,  acts  declaring  that 
such  sales  shall  be  fraudulent  and  void  were  held  con- 
stitutional : 

Squire  Co.  v.  Teller,  185  Mass.,  18;  69  N.  E., 

312  (1904). 

McDaniels  v.  Connelly  Co.,  30  Wash.,  549. 
Walp  v.  Lampkin,  76  Conn.,  515 ;  57  Atl.,  277 

(1904). 

I  am  of  the  opinion  that  under  the  Illinois  law,  even 
if  neither  seller  nor  purchaser  complies  with  the  pro- 
visions of  the  law  there  is  only  a  prima  facie  presump- 
tion of  fraud,  which  may  be  rebutted  by  showing 
absence  of  fraud  in  the  transaction. 

I  have  spoken  to  Justice  Prindiville  and  he  informs 
me  that  there  is  a  misunderstanding  about  his  decision. 
He  says  that  he  did  not  hold  the  transaction  conclu- 
sively fraudulent,  and  in  proof  of  his  statement  he 
says  that  he  heard  evidence  upon  that  point;  that  if 


670 

he  had  held  that  the  sale  was  conclusively  fraudulent, 
it  would  not  have  been  necessary  for  him  to  have  heard 
evidence  upon  that  point. 

NOTE: — 

I. 

"Bulk  Sales"  laws  have  been  held  constitutional,  and  their  validity 
sustained  or  recognized  in  the  following  cases: 

Connecticut:  Walp  v.  Mooar,  76  Conn.,  515,  57  Atl.,  277  (1904); 
Be  Paulis,  144  Fed.,  474  (1906)  ;  Young  v.  Lemieux,  65  Atl.,  436  (Conn., 
1907). 

Georgia:  Sampson  v.  Brandon  Grocery  Co.,  56  S.  E.,  488  (Ga., 
1907)  ;  Parham  #  Co.  v.  Potts  Liquor  Co.,  56  S.  E.,  460  (Ga.,  1907). 

Maryland:    Hart  v.  Dean,  93  Md.  432,  49  Atl.,  661  (1901). 

Massachusetts:  Squire  v.  Tellier,  185  Mass.,  18,  69  N.  E.,  312 
(1904). 

Minnesota:  Thorpe  v.  Pennock  Mercantile  Co.,  108  N.  W.,  940 
(Minn.,  1906). 

Oklahoma:     Williams  v.  Bank,  82  Pac.,  496  (Okla.,  1905). 

Tennessee:     Neas  v.  Borchas,  109  Tenn.,  398,  71  S.  W.,  50  (1902). 

Washington:  McDaniels  v.  Connelly  Shoe  Co.,  30  Wash.,  549,  71 
Pac.,  37,  60  L.  E.  A.,  497. 

Wisconsin:    Fisher  v.  Herman,  118  Wis.,  424,  95  N.  W.,  392  (1903). 

II. 

"Bulk  Sales"  Laws  have  been  held  unconstitutional  and  void  in  the 
following  cases: 

Indiana:  McEinster  v.  Sager,  163  Ind.,  671,  72  N.  E.,  854,  68  L. 
E.  A.,  273  (1904). 

New  York:  Wright  v.  Hart,  182  N.  Y.,  330,  75  N.  E.,  404,  2  L. 
E.  A.  (N.  S.),  338  (1905). 

Ohio:  Miller  v.  Crawford,  70  Ohio  St.,  207,  71  N.  E.,  631  (1904); 
Ee  Davis,  10  Am.  B.  E.,  189  (1904). 

Utah:  Block  v.  Schwartz,  27  Utah,  387,  76  Pac.,  22,  65  L.  E.  A., 
308  (1904). 

The  Illinois  "Bulk  Sales"  Act  has  not  up  to  the  present  time 
(Jan.  1,  1908)  been  passed  upon  by  the  Supreme  Court. — Ed. 


WHETHER  THE  ASSESSMENT  OF  CAPITAL,  STOCK  MADE  PRIOE 
TO  JULY  1,  1905,  UNDER  THE  LAW  OF  ILLINOIS,  CAN  BE 
ENFORCED. 

(Hartman,  Hay  &  Keis,  September  29, 1905.) 

1  'We  beg  you  to  furnish  us  with  the  association 's 
attorney's  opinion  regarding  the  statutes  covering 
taxation  on  the  capital  stock  of  corporations  in 
this  State. 

We  understand,  of  course,  the  repeal  of  this  law 


671 

became  effective  July  1,  1905,  but  the  point  on 
which  we  desire  to  be  definitely  informed  is,  can 
the  payment  of  this  tax  assessed  prior  to  July  I,1 
1905,  be  enforced! 

Furthermore,  in  the  absence  of  a  regular  assess- 
ment, through  any  case  whatsoever,  has  the  Board 
of  Review  a  legal  right  to  supply  the  assessment 
and  enforce  payment  of  same? 

Thanking  you  kindly  in  advance,  and,  with  the 
hope  you  are  in  position  to  enlighten  us  on  this 
subject,  we  are,  etc." 

The  question  as  to  the  taxation  of  capital  stock  of 
corporations  is  fully  covered  in  my  opinion  of  this 
date  in  answer  to  the  query  of  Norton  &  Company,  to 
which  I  refer. 

The  law  enacted  by  the  last  session  of  the  Legisla- 
ture exempting  capital  stock  of  manufacturing  and 
mercantile  corporations  from  taxation  went  into  effect 
July  1, 1905.  It  is  not  retroactive  in  its  operation,  and 
payment  of  a  tax  upon  capital  stock  assessed  prior 
to  July  1, 1905 — that  is,  as  of  April  1,  1905 — can  prob- 
ably be  enforced.  The  same  runs  for  the  fiscal  year 
beginning  January  1st. 

The  revenue  act  of  1898  (section  35)  provides  that 
the  Board  of  Review  shall  assess  all  property  subject 
to  assessment  which  shall  not  have  been  assessed  by 
the  assessors.  It  has  been  squarely  held  under  this 
act  that  the  Board  of  Review  may  assess  property 
omitted  from  assessment  for  the  current  year,  or  for 
previous  years. 

Sellars  v.  Barrett,  185  111.,  466  (190). 
People  v.  Sellars,  179  111.,  170. 
Carney  v.  People,  210  HI.,  434. 
The  law  provides  that  the  Board  of  Review  must 
complete  its  work  by  September  7th,  and  it  is  held 
that  in  counties  of  less  than  125,000  population  the. 
board  has  no  power  to  act  after  returning  its  books. 

BarUey  v.  Dale,  213  111.,  619. 

The  revenue  act  of  1898  (section  38),  however,  has 
the  following  proviso: 

"That  in  counties  containing  one  hundred  and 


672 

twenty-five  thousand  or  more  inhabitants  the 
Board  of  Review  shall  also  meet  from  time  to 
time  and  whenever  necessary  to  consider  and  act 
upon  complaints  and  to  further  revise  the  assess- 
ment of  real  property  as  may  be  just  and  neces- 
sary." 

The  Board  of  Eeview  of  Cook  County  can,  therefore, 
supply  an  assessment  omitted  by  the  assessor.  The 
State  Board  of  Equalization  can  also  act  as  an  origi- 
nal assessor  and  assess  capital  stock  for  previous 
years  which  was  omitted  from  taxation,  provided  the 
capital  stock  was  such  as  could  have  been  originally 
assessed  by  the  State  Board. 

State  Board  of  Equalisation  v.  People,  191 
111.,  528. 

WHETHER  A  COMPANY  ENGAGED  IN  THE  MANUFACTURE  OF 
ELECTRIC  ENERGY  FOR  LIGHT  AND  POWER  IS  LIABLE  FOR 
CAPITAL  STOCK  TAX  IN  ILLINOIS. 

(Norton  &  Co.,  September  29,  1905.) 
"Will  you  please  advise  us  whether  or  not,  un- 
der the  new  law  passed  by  the  last  legislature, 
manufacturing  companies  are  liable  for  capital 
stock  tax ;  also  whether  a  company  engaged  in  the 
manufacture  of  electric  energy  for  light  and  power 
distribution  is  exempt  from  capital  stock  taxa- 
tion!" 

I.  By  clause  4,  section  3,  of  the  revenue  act  pre- 
vious to  the  amendment  of  1905  it  was  provided : 

' '  The  capital  stock  of  all  companies  and  associa- 
tions now  or  hereafter  created  under  the  laws  of 
this  state  except  those  required  to  be  assessed 
by  the  local  assessors,  as  hereinafter  provided 
shall  be  so  valued  by  the  State  Board  of  Equaliza- 
tion as  to  ascertain  and  determine  respectively, 
the  fair  cash  value  of  such  capital  stock,  includ- 
ing the  franchise,  over  and  above  the  assessed 
value  of  the  tangible  property  of  such  company 
or  association.  Provided,  further,  that 

companies  and  associations  organized  for  purely 


673 

manufacturing  purposes  or  for  the  mining  and 
sale  of  coal,  or  printing  or  for  publishing  of  news- 
papers or  for  the  improving  and  breeding  of 
stock,  shall  be  assessed  by  the  local  assessors  in 
like  manner  as  the  property  of  individuals  is  re- 
quired to  be  assessed."  (Hurd's  Rev.  Stat.,  1903, 
p.  1509.) 

This  provision  of  the  revised  act  was  construed  by 
the  Supreme  Court  in  the  case  of  The  Hub  v.  Hanberg, 
County  Treasurer,  211  111.,  43,  decided  June  23,  1904. 
It  was  there  held  that  the  capital  stock  of  all  corpora- 
tions, except  those  particularly  exempted,  was  sub- 
jected by  the  State  Board  of  Equalization.  As  to  the 
capital  stock  of  companies  which  are  exempt  from  as- 
sessment by  the  State  Board  of  Equalization,  it  was 
held  that  it  was  the  duty  of  the  local  assessor  to  assess 
the  fair  cash  value  of  the  capital  stock,  including  the 
franchise,  over  and  above  the  assessed  value  of  the 
tangible  property  of  every  corporation  named  in  clause 
4  of  section  3,  which  includes  corporations  organized 
for  purely  manufacturing  purposes,  etc.,  and  that  the 
corporations  therein  named  were  liable  to  taxation 
upon  their  capital  stock,  including  the  franchise,  pre- 
cisely as  all  other  corporations  organized  for  pecuniary 
profit,  the  duty  of  assessing  which  is  vested  in  the 
State  Board  of  Equalization.  The  only  difference  is- 
that  in  the  one  case  the  assessment  is  to  be  made  by 
the  State  Board  of  Equalization  and  in  the  other  it  is 
to  be  made  by  the  local  assessor. 

Since  this  decision  the  section  in  question,  together 
with  several  others,  has  been  amended  by  the  act  of 
May  18,  1905.  (Laws  of  Illinois,  1905,  p.  353.)  That 
act  amended  sections  1,  3,  32  and  108  of  the  revenue 
act.  Section  1,  as  amended,  provides,  inter  alia: 

1 1  That  the  property  named  in  this  section  shall 
be  assessed  and  taxed  except  so  much  thereof  as 
may  be  in  this  act  exempted. 

Fourth:  The  capital  stock  of  companies  and 
associations  incorporated  under  the  laws  of  this 
State,  except  companies  and  associations  organ- 
ized for  purely  manufacturing  and  mercantile  pur- 


674 

poses,  or  for  either  of  such  purposes,  or  for  the 
mining  and  sale  of  coal,  or  for  printing,  or  for  the 
publishing  of  newspapers,  or  for  the  improving 
and  breeding  of  stock." 

The  original  section  1,  previous  to  the  amendment, 
contained  no  exemption,  but  applied  to  all  companies 
and  corporations. 

Section  3,  as  amended,  provides,  inter  alia: 

1 1  Personal  property  shall  be  valued  as  follows : 

.  *  *  *  *  * 

The  capital  stock  of  all  companies  and  associa- 
tions now  or  hereafter  created  under  the  laws  of 
this  State,  except  companies  and  associations  or: 
ganized  for  purely  manufacturing  and  mercantile 
purposes,  or  for  the  mining  and  sale  of  coal,  or 
for  printing,  or  for  the  publishing  of  newspapers, 
or  for  the  improving  and  breeding  of  stock,  shall 
be  so  valued  by  the  State  Board  of  Equalization  as 
to  ascertain  and  determine  respectively,  the  fail- 
cash  value  of  such  capital  stock,  including  the 
franchise  over  and  above  the  assessed  value  of  the 
tangible  property  of  such  company  or  associa- 
tion." 

The  section  as  it  originally  stood  is  quoted  above, 
and  it  will  be  seen  that  the  capital  stock  of  manufactur- 
ing corporations,  etc.,  was  not  absolutely  exempt,  but 
it  was  merely  exempt  from  assessment  by  the  State 
Board  of  Equalization,  but  not  by  the  local  assessors. 
Section  32  of  the  revenue  act  provides  for  the  mak- 
ing of  sworn  statements  as  to  capital  stock.  Under 
this  section,  as  amended,  manufacturing  and  mercan- 
tile corporations,  etc.,  are  expressly  exempt. 

Section  108  relates  to  the  assessment  by  the  State 
Board.  The  same  exemption  is  contained  in  the 
amended  section  as  is  now  contained  in  section  32. 

I  am,  therefore,  of  the  opinion  that  under  the  revenue 
law,  as  amended  in  1905,  the  capital  stock  of  all  cor- 
porations organized  for  purely  manufacturing  or  mer- 
cantile purposes,  or  for  the  mining  and  sale  of  coal, 
or  for  printing  or  for  publishing  of  newspapers,  or  for 
the  improvement  and  breeding  of  stock,  is  exempt  from 


675 

assessment,  not  only  by  the  State  Board  of  Equaliza- 
tion, but  by  the  local  assessors  and  Board  of  Review. 
I  do  not  pass  at  this  time  upon  the  constitutionality  of 
the  law. 

II.  As  to  whether  a  company  engaged  in  the  manu- 
facture of  electric  energy  for  light  and  power  distribu- 
tion is  exempt  from  capital  stock  taxation  has  not  been 
definitely  decided  by  the  courts  of  this  state. 

The  purpose  for  which  a  corporation  is  organized 
must  be  ascertained  by  reference  to  the  terms  of  its 
charter,  as  frequently  stated  in  my  prior  opinions  to 
the  association  upon  this  subject. 
See: 

Distilling  Co.  v.  People,  161  111.,  101. 
Evanston  El.  Illuminating  Co.  v.  Kochersper- 
ger,  175  111.,  26. 

The  charter  of  the  corporation  under  consideration 
has  not  been  furnished  me,  but  I  assume  that  it  merely 
provides  that  the  corporation  is  formed  ' '  for  the  manu- 
facture of  electricity,"  etc.,  and  that  the  company  is 
given  no  power  in  its  charter  to  purchase  the  energy 
it  supplies  from  other  sources. 

In  Evanston  Electric  Illuminating  Co.  v.  Kochersper- 
ger,  175  III.,  26,  it  appears  that  the  illuminating  com- 
pany filed  a  bill  to  enjoin  the  collection  of  a  tax  as- 
sessed by  the  State  Board  of  Equalization  upon  the 
valuation  of  its  capital  stock  and  franchise,  upon  the 
ground  that  it  was  organized  purely  for  the  purpose 
of  manufacturing  electricity,  and,  therefore,  exempted 
from  assessment  by  the  State  Board  of  Equalization. 
The  court  said : 

"In  this  case  the  charter,  as  certified  to,  by  the 
Secretary  of  State,  was  introduced  in  evidence, 
and  shows  the  object  for  which  the  corporation 
was  formed  to  be  'to  furnish  light,  heat  and  power 
for  public  and  private  uses.'  This  is  not  a  purely 
manufacturing  purpose.  The  superintendent  of 
appellant  testified  that  it  furnished  electric  light 
and  power  to  the  public.  Its  wires  are  strung  on 
the  streets  of  the  City  of  Evanston,  and  it  has 
about  seventy  or  eighty  miles  of  wires.  It  fur- 


676 

nislies  electric  light  to  the  citizens  and  to  the  city. 
It  generates  the  electricity  which  it  furnishes,  but 
that  does  not  extend  the  purpose  for  which  the 
corporation  was  organized,  as  stated  in  its  char- 
ter. It  is  not  necessary  in  this  case  to  consider 
whether  a  company  formed  for  the  purpose  of  gen- 
erating or  collecting  electricity  or  producing  elec- 
tric light  by  a  current  of  electricity,  and  furnish- 
ing such  light  or  heat  or  power  for  public  and 
private  use,  could  be  regarded  as  a  corporation 
purely  for  manufacturing  purposes.  Appellant 
was  not  organized  for  that  purpose,  but  under  its 
charter  might  furnish  light,  heat  and  power,  pro- 
cured for  some  other  person  or  corporation  with- 
out engaging  in  the  business  of  generating  the 
electricity  at  all.  It  is  not  exempt  under  the  pro- 
vision of  the  statute  relied  upon,  and  the  bill  was 
properly  dismissed." 

It  is  thus  apparent  that  the  question  was  not 
squarely  passed  upon  by  the  Illinois  Supreme  Court. 

There  is  not  entire  harmony  among  the  decisions 
outside  of  Illinois  respecting  the  status  of  electric  light 
companies  under  statutes  exempting  manufacturing 
corporations  from  taxation.  The  weight  of  authority, 
however,  classifies  them  as  manufacturing  corpora- 
tions and  holds  them  entitled  to  the  privilege  and  ex- 
emptions of  such  corporations. 

In  people  ex  rel.  Brush  Mfg.  Co.  v.  Wemple,  129  N. 
Y.,  543,  it  was  held  that  a  corporation  engaged  in  the 
business  of  producing  electricity  and  supplying  it  to 
customers  for  the  purpose  of  public  and  private  illumi- 
nation is  a  manufacturing  corporation  and  not  subject 
in  that  state  to  taxation  upon  its  corporate  franchise 
under  a  statute  providing  for  such  a  tax  upon  corpora- 
tions generally,  with  certain  exceptions,  among  which 
were  manufacturing  corporations  carrying  on  manu- 
facture with  that  state. 
The  court  said: 

"The  business  in  which  the  corporation  is  en- 
gaged renders  it  necessary,  in  the  first  place,  to  in- 
vest a  large  amount  of  capital  in  a  plant,  which 


677 

may  appropriate  enough  to  be  called  a  factory. 
Then  it  must  purchase  and  consume  a  vast  amount 
of  coal  to  produce  steam,  and  to  furnish  power 
for  the  operation  of  machinery.  Then  it  supplies 
and  operates  a  complicated  system  of  machinery 
such  as  boilers,  engines,  dynamos,  shafting,  belting 
and  such  other  things  as  are  commonly  used  in 
manufacturing  establishments,  and  then  by  means 
of  wire,  cables  and  lamps  it  lights  streets  and  pri- 
vate houses  by  electricity  for  a  compensation. 
But  the  electricity  or  electric  currents  that  pro- 
duce this  result  can  not  properly  be  said  to  be  the 
free  gift  of  nature,  gathered  from  the  air  or  the 
clouds.  It  is  the  product  of  capital  and  labor  and 
in  this  respect  can  not  be  distinguished  from  ordi- 
nary manufacturing  operations.  According  to  the 
common  understanding  the  electricity  or  thing 
which  produces  the  results,  from  which  the  corpo- 
ration derives  its  income,  is  generated  or  produced 
by  the  application  of  power  to  machinery  and  thus, 
by  means  of  a  process  wholly  artificial,  the  relator 
is  enabled  to  sell  the  product  of  its  operation  to  its 
customers.  Passing  by  the  refinements  of  scien- 
tific discussion  as  to  the  nature  of  electricity,  it 
would  seem  to  be  common  sense  to  hold  that  a 
corporation  that  does  all  this,  is,  in  every  just 
sense  of  the  term,  a  manufacturing  corporation." 
To  the  same  effect  are : 

People  v.  Edison  Electric  III.  Co.,  129  N.  Y., 
664. 

People  v.  Edison  Electric  Light  Co.,  34  N.  Y. 
S.,  711. 

Beggs  v.  Edison  III.  Co.,  96  Ala.,  295,  11  So., 
381. 

Lamborn  v.  Bell,  18  Colo.,  346,  32  Pac.,  989. 

Opinion  of  the  Justices,  150  Mass.,  592. 

Burke  v.  Mead,  159  Ind.,  252,  64  N.  E.,  880, 

883. 

It  is  held  also  in  Pennsylvania  that  an  electric  light 
company  is  a  manufacturing  corporation,  although  not 
the  kind  of  a  manufacturing  corporation  the  Pennsyl- 


678 

vania  Legislature  had  in  mind  and  intended  to  include 
when  it  enacted  the  law  abolishing  capital  stock  taxes 
upon  manufacturing  corporations. 

Commonwealth  v.  Northern  EL  L.  <&  P.  Co., 

145  Pa.  St.,  105. 
Com.  v.  Edison  Electric  Light  Co.,  145  Pa.  St., 

131. 
Com.  v,  Edison  El.  L.  &  P.  Co.,  170  Pa.  St., 

231. 
Southern  El.  L.  &  P.  Co.  v.  Philadelphia,  191 

Pa.  St.,  170. 
Com.  v.  Keystone  El.  L.  H.  &  P.  Co.,  193  Pa., 

245. 

On  the  other  hand,  in  a  Maryland  case  it  was  held 
that  an  electric  light  company  does  not  carry  on 
a  "manufacturing  industry"  within  the  meaning  of  a 
city  ordinance  exempting  from  municipal  taxation 
"the  machinery  and  manufacturing  apparatus  of  all 
manufacturing  industries"  located  in  the  city. 

Frederick  EL  L.  &  P.  Co.  v.  City,  84  Md.,  599, 

36  Atl.,  362. 
And  to  the  same  effect  is : 

Williams  v.  Parks,  72  N.  H.,  305,  56  Atl.,  463. 
It  is  to  be  noted  that  in  Illinois  it  is  held  that  a  gas 
company  is  a  manufacturing  company,  but  it  is  not 
exempt  from  taxation  on  its  capital  stock  because  the 
statute  expressly  names  gas  companies  among  the  cor- 
porations required  to  furnish  the  State  board  with 
sworn  statements  of  their  capital  stock  for  the  purpose 
of  assessment  and  taxation. 

Ottawa  Gas  Light  &  Coke  Co.  v.  Downey,  127 

111.,  201. 

Sterling  Gas  Co.  v.  Higby,  134  111.,  557. 
Upon  the  authority  of  the  above  decisions  I  am  of 
the  opinion  that  in  Illinois  an  electric  light  company 
manufacturing  electric  energy  and  power  would  be 
held  to  be  a  manufacturing  corporation  within  the  stat- 
ute exempting  manufacturing  corporations  from  tax- 
ation upon  their  capital  stock. 


679 


AS    TO    LIABILITY    OF    A    GABBIER    FOR    DELAY    IN    SHIPMENT 
AND    THE     MEASUEE    OF    DAMAGES    THEREFOR. 

(Chicago  Flour  Company,  September  29  1905.) 

' '  On  February  4,  1905,  we  delivered  to  the  Belt 
Railway  a  car  of  flour  consigned  to  a  manufactur- 
ing institution  at  Corning,  N.  Y.,  routed  via  Nickel 
Plate  Fast  Freight  Line. 

This  car  was  turned  over  to  the  Nickel  Plate 
at  their  Stony  Island  avenue  yards  on  February 
16th ;  was  held  by  them  there  until  February  28th 
made  to  consignors  on  March  9th.  This  shows  that 
it  took  the  Nickel  Plate  Fast  Freight  Line  twenty- 
one  days  to  make  the  delivery,  which  they  would 
ordinarily  make  in  six  to  nine  days. 

Had  delivery  been  made  in  proper  time,  the 
manufacturing  plant  at  Corning  would  not  have 
run  out  of  material,  but  as  it  was,  they  did  run 
out  and  were  put  to  quite  a  burden  of  expense  in 
the  way  of  additional  freights  on  L.  C.  L.  ship- 
ments from  nearby  points,  cartage,  telegrams, 
and  other  small  items. 

Will  you  kindly  advise  us  as  to  whether  delay 
as  shown  above  would  be  considered  abnormal,  and 
if  so,  as  to  what  liability  may  attach  for  suchl 
delay! 

You  have  possibly  rendered  an  opinion  covering 
this  point  at  some  past  time,  but  we  are  unable  to 
locate  it." 

In  my  opinion  of  October  28,  1903,  in  response  to 
an  inquiry  from  F.  T.  Bentley,  chairman  of  the  traffic 
committee,  and  of  June  26,  1905,  to  Joseph  T.  Eyerson 
&  Son,  I  discussed  the  liability  of  a  common  car- 
rier for  delay  in  the  delivery  of  shipments  and  the 
measure  of  damages  for  the  same,  to  which  opinions  I 
refer. 

It  is  unquestionably  the  rule  that  it  is  a  carrier's 
duty  to  carry  and  deliver  with  reasonable  promptness. 
What  is  such  a  reasonable  time  is  to  be  determined 
from  circumstances,  such  as  the  modes  of  conveyance, 


680 

the  distance,  the  season  of  the  year,  the  character  of 
the  weather  and  the  extent  of  the  ordinary  facilities 
of  transportation  at  the  disposal  of  the  carrier. 

The  fact  that  the  time  occupied  in  the  transportation 
or  delivery  of  the  consignment  is  unusual  is  not  of 
itself  conclusive  that  there  has  been  an  unnecessary 
delay. 

Chicago  R.  Co.  v.  Simms,  18  111.  App.,  68. 

I.  C.  R.  Co.  v.  Cobb,  64  111.,  128. 

Mich.  So.  R.  Co.  v.  Day,  20  111.,  375. 
In  this  instance,  in  the  absence  of  any  explanatory 
facts  or  circumstances,  the  delay  would  certainly  be 
considered  abnormal  and  constitute  a  prima  facie  case 
of  unreasonable  delay,  and  the  carrier  would  be  liable 
in  damages. 

Also  damages  which  proximately  and  reasonably  re- 
sult from  this  delay  may  be  recovered.  What  damages 
are  considered  as  proximate  must  be  determined  from 
the  particular  circumstances  of  each  case.  Thus,  where 
the  proximate  result  of  the  delay  is  the  loss  of  the  use 
of  the  goods,  the  measure  of  damages  is  the  value  of 
the  goods  during  the  time  of  detention.  Profits  whicK 
are  reasonably  certain  may  be  recovered.  But  the 
carrier  will  not  be  liable  for  profits  lost  by  reason  of 
failure  to  perform  a  special  contract  unless  he  has 
notice  of  the  contract.  And  in  general  depreciation  in 
value  due  to  delay  may  be  recovered.  Necessary  ex- 
penses incurred  by  the  owner  of  the  goods  on  account 
of  negligent  delay  of  the  carrier  in  delivering  them  at 
their  destination  may  be  recovered. 

6  Cyc.,  452. 

/.  C.  R.  R.  Co.  v.  Cobb,  72  111..  148. 

Chffo.  R.  Co.  v.  Calumet,  194  111.,  9. 
As  to  whether  the  expense  of  additional  freights  on 
L.  C.  L.  shipments,  cartage,  etc.,  is  proximately  caused 
by  the  delay  must  be  determined  from  all  the  circum- 
stances of  the  case. 

I  am  of  the  opinion  that  under  this  prima  facie  case 
of  negligent  delay  the  above  items  of  expense  and  all 
damages  reasonably  resulting  therefrom  may  be  re- 
covered. 


681 


THE  CONSTITUTIONALITY  OF  THE  VIRGINIA  STATUTE  RE- 
QUIRING A  LICENSE  PEE  OF  $200  FOR  THE  PRIVILEGE  OF 
SELLING  SEWING  MACHINES  IN  THAT  STATE. 

(Illinois   Sewing  Machine   Company,   September   29, 

1905.) 

' '  In  the  State  of  Virginia  we  are  obliged  to  pay 
each  year  a  license  of  $200  for  the  privilege  of 
selling  our  sewing  machines  throughout  the  State. 
Please  be  kind  enough  to  give  us  an  opinion  as 
to  whether  there  would  be  any  possibility  of  our 
proving  this  unconstitutional  or  an  interference 
with  interstate  commerce!" 

The  Tax  Bill  of  Virginia  (Pollards'  Virginia  Code, 
1904,  p.  2249)  in  respect  to  licenses  to  persons  selling 
or  offering  to  sell  sewing  machines  and  accessories, 
provides  as  follows : 

"135.  First,  no  manufacturer  or  other  person, 
whether  he  be  licensed  as  a  peddler,  merchant,  or 
sample  merchant,  or  not,  shall  canvass  any  county, 
town  or  city,  for  the  purpose  of  selling  or  offering 
to  sell,  or  shall  actually  sell  or  deliver,  sewing 
machines  and  accessories,  unless  he  be  licensed  as 
provided  in  this  section. 

Second.    Any  manufacturer  desiring  the  privi- 
lege of  selling,  or  offering  to  sell,  or  of  selling  and 
delivering  sewing  machines  manufactured  by  him, 
and  accessories  to  sewing  machines,  throughout 
the  Commonwealth,  shall  apply  to  the  auditor  of 
public  accounts  for  a  license,  and  it  shall  be  the 
duty  of  the  auditor  of  public  accounts,  upon  the 
payment  into  the  State  treasury  of  the  sum  of  two 
hundred  dollars  for  the  privilege  of  transacting 
such  business,  to  grant  such  license,  and  such  pay- 
ment shall  be  in  lieu  of  any  additional   State, 
county,  city  or  town  license  tax  or  levy." 
The  act  also" provides:     That  the  privilege  shall  be 
personal  and  not  transferable;  for  sales  by  repre- 
sentatives and  agents  of  the  manufacturer  thereunder 
upon  certain  conditions  and  payment  of  certain  fees ; 


682 

for  the  sale  by  merchants,  at  the  regular  place  of  busi- 
ness, of  the  manufacturer's  machines  upon  payment  of 
license  fee  of  five  dollars ;  and  for  sales  by  other  per- 
sons of  machines  purchased  from  licensed  manufac- 
turers. The  act  also  provides  certain  license  fees  for 
persons  desiring  the  privilege  of  canvassing  for  the 
sale  of  machines  other  than  those  licensed.  A  penalty 
is  prescribed  for  failure  to  comply  with  the  law. 

In  my  opinion  of  October  26,  1903,  in  reference  to 
a  communication  from  Montgomery  Ward  &  Co.,  I  dis- 
cussed the  question  as  to  whether  a  foreign  corpora- 
tion could  be  compelled  to  pay  a  license  to  sell  sew- 
ing machines  in  North  Carolina,  to  which  opinion  I 
refer.  I  then  stated  that  in  my  opinion  the  North 
Carolina  law  was  unconstitutional  as  an  attempt  to 
regulate  interstate  commerce,  notwithstanding  that  the 
Supreme  Court  of  North  Carolina  had  at  that  time  up- 
held the  law.  Thereafter  the  United  States  Supreme 
Court  reversed  the  Supreme  Court  of  North  Carolina 
and  held  the  law  unconstitutional  in  the  case  of  Norfolk 
&  W.  R.  Co.  v.  Sims,  191  U.  S.,  441,  24  Sup.  Ct.,  151 
(Dec.  7,  1903). 

In  Henderson  v.  Ortte,  38  So.  Rep.  (La.  1905),  the 
tax  collector  sued  the  respondent,  the  representative 
of  the  Illinois  Sewing  Machine  Company,  to  recover 
$100  state,  and  $100  parish  license  tax  imposed  by  the 
state  and  parish  for  the  privilege  of  selling  sewing 
machines.  It  appears  that  the  respondent  bought  ma- 
chines in  Illinois;  the  parts  of  the  machines  were  put 
together  and  packed  and  shipped  in  separate  packages, 
each  machine  placed  in  one  package,  to  the  address 
of  the  defendant  in  Louisiana.  They  were  then  sold 
in  those  packages  by  the  defendant.  The  court  held 
that  the  defendant  was  exempted  from  taxation;  that 
the  sale  was  interstate  commerce;  that  the  commerce 
protected  by  the  federal  constitution  is  general,  and 
that  retail  trade  as  well  as  wholesale  is  included  in  the 
idea  of  commerce. 

In  Caldwell  v.  North  Carolina,  187  U.  S.,  622  (1903), 
it  was  held  that  an  ordinance  under  which  a  license 
fee  may  be  required  from  an  agent  of  a  non-resident 


683 

portrait  company,  who  receives  from  such  company 
pictures  and  frames  manufactured  by  it  to  fill  orders 
previously  taken,  and  after  breaking  bulk  and  placing 
each  picture  in  the  frame  designed  for  it,  delivers  them 
to  the  respective  purchasers,  is  invalid  as  an  attempt 
to  interfere  with  and  regulate  interstate  commerce. 
The  court  there  said : 

"Transactions  between  manufacturing  com- 
panies in  one  State,  through  agents,  with  citizens 
of  another,  constitute  a  large  part  of  interstate 
commerce,  and  for  us  to  hold  *  *  that  the 

same  articles,  if  sent  by  rail  directly  to  the  pur- 
chaser, are  free  from  state  taxation,  but  if  sent 
to  an  agent  to  deliver,  are  taxable  through  a  li- 
cense tax  upon  the  agent,  would  evidently  take  a 
considerable  portion  of  such  traffic  out  of  the  salu- 
tary protection  of  the  interstate  commerce  clause 
of  the  constitution." 

In  Bobbins  v.  Shelby  County  Taxing  Dist.,  120  U.  S., 
489,  497  (1887),  it  was  held  that  interstate  commerce 
can  not  be  taxed  at  all,  even  though  the  same  amount 
of  tax  should  be  laid  on  domestic  commerce,  or  that 
which  is  carried  on  wholly  within  the  state;  and  that 
the  regulation  of  sales  of  goods  which  are  in  another 
state,  for  the  purpose  of  introducing  them  into  the 
state  in  which  the  negotiation  is  made  is  interstate 
commerce. 

Asher  v.  Texas,  128  U.  S.,  129  (1888),  was  a  case 
where  a  state  statute  required  from  "every  commer- 
cial traveler,  drummer,  salesman,  or  solicitor  of  trade, 
by  sample  or  otherwise,  an  annual  occupation  tax," 
and  such  legislation  was  declared  inoperative,  so  far 
as  it  affected  one  soliciting  orders  for  a  business  house 
in  another  state. 

In  Kehrer  v.  Stewart,  117  Ga.,  969,  44  S.  E.,  854 
(1903),  it  was  held: 

"One  who,  in  this  State,  as  the  agent  of  a  prin- 
cipal residing  in  another  State,  takes  orders  on 
such  principal  for  the  purchase  of  goods  held  in 
such  other  State,  and,  who,  when  the  goods  are 
shipped  by  his  principal  to  him,  receives  them  in 


684 

this  State,  and  delivers  them  in  the  original  pack- 
ages to  the  customers  from  whom  he  obtained  the 
orders,  and  upon  delivery  receives  from  them  the 
price  of  the  goods,  is  engaged  in  interstate  com- 
merce. ' ' 

It  is  sound  law  that  a  tax  or  charge  for  a  license  to 
sell  goods  is,  in  effect,  a  tax  on  the  goods  themselves. 

Welton  v.  Missouri,  91  U.  S.,  275. 
In  the  late  case  of  Norfolk  &  W.  R.  Co.  v.  Sims,  191 
U.  S.,  441  (Dec.,  1903),  it  appears  that  the  North  Caro- 
lina revenue  law  provided : 

"Every  manufacturer  of  sewing  machines,  and 

every  person  or  persons  or  corporation  engaged 

in  the  business  of  selling  the  same  in  this  State, 

shall  before  selling  or  offering  for  sale  any  such 

machine,  pay  to  the  state  treasurer  a  tax  of  $350 

and  obtain  a  license,  which  shall  opera'te  for  one 

year  from  the  date  of  the  issue." 

The  court  said,  after  reviewing  the  authorities  and 

relying  upon  Caldwett  v.  North  Carolina,  187  U.  S., 

622  (1903),  (above  quoted) : 

' l  The  sewing  machine  was  made  and  sold  in  an- 
other State,  shipped  to  North  Carolina  in  its 
original  package  for  delivery  to  the  consignee 
upon  payment  of  its  price.  It  has  never  become 
commingled  with  the  general  mass  of  property 
within  the  State.  While  technically  the  title  of  the 
machine  may  not  have  passed  until  the  price  was 
paid,  the  sale  was  actually  made  in  Chicago,  and 
the  fact  that  the  price  was  to  be  collected  in  North 
Carolina  is  too  slender  a  thread  upon  which  to 
hang  an  exemption  of  the  transaction  from  a  rule 
which  would  otherwise  declare  the  tax  to  be  an 
interference  with  interstate  commerce." 
The  statute  was  accordingly  held  an  unconstitutional 
interference  with  interstate  commerce. 

The  Illinois  Sewing  Machine  Company  has  not  stated 
its  method  of  doing  business  in  Virginia.  In  my  nu- 
merous opinions  regarding  what  constitutes  "doing 
business"  by  foreign  corporations,  and  especially  in 
my  opinion  of  October  26,  1903,  above  referred  to,  I 


685 

have  discussed  the  question  as  to  what  constitutes  in- 
terstate commerce. 

The  sewing  machine  company  can  doubtless  deter- 
mine by  reference  to  the  foregoing  authorities  whether 
it  need  comply  with  the  Virginia  law.  If  its  agents 
merely  take  orders  in  Virginia  and  the  orders  are  filled 
by  shipments  from  without  the  state  of  Virginia,  I 
am  of  the  opinion  that  such  transactions  constitute 
interstate  commerce  and  the  company  is  under  no  ob- 
ligation to  pay  the  tax. 


WHETHEE    BOOK    ACCOUNTS    ABE    SUBJECT    TO    ASSESSMENT 
OE  TAXATION  UNDEE  THE  LAW  OF  ILLINOIS. 

(Hunt,  Helm,  Ferris  &  Co.,  October  2,  1905.) 
"We  would  like  to  make  inquiry  of  attorney  Mr. 
Levy  Mayer  as  to  whether  the  book  accounts  of 
a  corporation  are  subject  to  assessment  by  the 
tax  assessor.  In  case  Mr.  Mayer's  opinion  should 
be  that  they  are  assessable  we  would  then  like  to 
inquire  if  it  would  be  permissible  in  making  sched- 
ule of  these  accounts  for  the  assessor,  to  deduct 
from  same  any  amount  which  the  corporation 
might  be  owing  the  bank  for  funds  necessary  for 
running  expenses." 

The  general  revenue  act  of  Illinois,  under  "Rules 
for  Listing  Credits,"  provides  as  follows: 

"27.  (What  debts  deducted  from  credits.)  Sec. 
27.  In  making  up  the  amount  of  credits  which 
any  person  is  required  to  list  for  himself,  or  for 
any  other  person,  company  or  corporation,  he  shall 
be  entitled  to  deduct  from  the  gross  amount  of 
credits  the  amount  of  all  bona  fide  debts  owing 
by  such  person,  company  or  corporation,  to  any 
other  person,  company  or  corporation,  for  a  con- 
sideration received;  but  no  acknowledgment  of 
indebtedness  not  founded  on  actual  consideration, 
believed  when  received  to  have  been  adequate,  and 
no  such  acknowledgment  made  for  the  purpose  of 
being  so  deducted,  shall  be  considered  a  debt  with- 


686 

in  the  meaning  of  this  section;  and  so  much  only 
of  any  liability,  as  surety  for  others,  shall  be  de- 
ducted as  the  person  making  out  the  statement  be- 
lieves he  is  legally  and  equitably  bound,  and  will 
be  compelled  to  pay  on  account  of  the  inability  or 
insolvency  of  the  principal  debtor;  and  if  there 
are  other  sureties  who  are  able  to  contribute,  then 
only  so  much  as  the  surety  in  whose  behalf  the 
statement  is  made  will  be  bound  to  contribute: 
Provided,  that  nothing  in  this  section  shall  be  so 
construed  as  to  apply  to  any  bank,  company  or 
corporation  exercising  banking  powers  or  privi- 
leges, or  to  authorize  any  deductions  allowed  by 
this  section  from  the  value  of  any  other  item  of 
taxation  than  credits." 

1903  Ills.  Revised  Statutes,  Ch.  120,  Sec.  27. 
Section  29  of  the  revenue  act  also  provides  that  all 
deductions  must  be  verified  by  oath. 

Balance  due  on  book  accounts  are  unquestionably 
"credits"  within  the  meaning  of  the  statutes,  and  tax- 
able as  such. 

Thus  choses  in  action,  city  warrants,  money  loaned, 
debts  due,  whether  evidenced  by  writing  or  otherwise, 
balances  due,  etc.,  have  been  held  taxable  as  credits. 
Easton  v.  Board  of  Review,  183  111.,  255. 
Griffin  v.  Board  of  Review,  184  111.,  275. 
People  v.  Worthington,  21  111.,  171. 
Goldgart  v.  People,  106  111.,  25. 
Jacksonville  v.  McConnel,  12  111.,  138. 
Credits,  debts  and  securities  are  under  one  form  of 
expression  or   another   universally  rendered  taxable 
as  personal  property. 

27  Am.  Eng.  Enc.  (2d  Ed.),  637. 
Sellars  v.  Barrett,  185  111.,  466. 
But  debts  and  securities  are  taxable  only  to  the  cred- 
itor or  holder  and  not  to  the  debtor,  for  as  to  him  they 
are  not  property.    So  a  corporation  is  not  taxable  on 
the  value  of  the  debts  it  owes. 

Porter  v.  R.  R.  Co.,  76  111.,  561. 
The  revenue  act  expressly  allows  deductions  to  be 


687 

made  from  credits  and  a  deduction  may  be  made  for 
amounts  owing  to  the  bank. 

Such  deductions  must  be  verified  by  the  oath  of  the 
person  claiming  the  same,  and  the  right  to  deductions 
is  dependent  upon  the  filing  of  a  schedule. 
Sellars  v.  Barrett,  185  111.,  466. 
Siegfried  v.  Raymond,  190  111.,  424. 
The  general  rule  is  that  debts  attend  the  person  of 
the  creditor  and  are  taxable  at  his  domicile. 
Goldgart  v.  People,  106  111.,  25. 
People  v.  Davis,  112  111.,  272. 
Scripps  v.  Board  of  Review,  183  111.,  278. 
Ellis  v.  People,  199  111.,  548. 

But  credits  of  a  foreign  corporation  payable  at  its 
home  office  and  subject  to  taxation  there  are  not  tax- 
able in  Illinois. 

Re  Appeal  of  Union  Tank  Line  Co.,  204  111., 
347. 

THE  CONSTITUTIONALITY  OF  THE  PURE  FOOD  LAW  OF  SOUTH 
DAKOTA  OF  1905,  AND  THE  EFFECT  OF  PROVISIONS  THERE- 
IN REQUIRING  THE  PLACE  OF  MANUFACTURE  AND  THE 
NAME  OF  THE  MANUFACTURER  TO  BE  PLACED  ON  LABELS 
ON  FOOD  PRODUCTS. 

(William  Henning  Company,  October  4,  1905.) 

"Section  11  of  the  Food  Law  of  the  State  of 
South  Dakota,  enacted  in  1905,  reads  as  follows : 

'It  shall  be  unlawful  for  any  person  to  sell, 
offer,  or  expose  for  sale,  any  article  of  prepared 
food  unless  the  true  name  of  the  manufacturer  and 
the  location  of  the  factory  where  such  article  of 
food  is  prepared  is  plainly  printed  or  stenciled 
on  the  package,  box,  can,  carton  or  other  con- 
tainer.' 

We  desire  an  opinion  as  to  the  validity  of  this 
section  of  the  Statute.  When  an  article  of  food 
is  admittedly  healthful,  does  not  that  fact  place 
it  in  the  same  class  as  other  merchandise,  and  is 
it  not  therefore  beyond  the  jurisdiction  of  the 
police  power? 


688 

Merchants  generally  in  all  lines  of  trade  have 
for  many  years  bought  and  sold  goods  on  the  mar- 
ket under  proprietary  brands,  which  have  been 
extensively  advertised,  and  these  brands  on  ac- 
count of  the  diligence  of  the  merchant  and  the 
merits  of  the  product  have  in  many  instances  be- 
come exceedingly  valuable. 

Suppose:  First,  a  merchant  sells  all  kinds  of 
merchandise,  including  food  products,  will  the  law 
be  upheld  which  requires  each  article  to  show  the 
name  of  the  manufacturer  and  the  location  of  the 
factory,  the  effect  of  which  will  of  course  be  to 
destroy  the  value  of  his  brand? 

Second,  if  such  a  police  regulation  will  not  apply 
to  merchandise  (other  than  food  products),  will 
it  be  upheld  as  to  articles  of  food  which  are  ad- 
mittedly healthful  and  unadulterated?  Are  not 
such  articles  also  removed  from  the  jurisdiction  of 
the  police  power?" 

The  law  referred  to  is  a  section  of  an  Act  enacted 
by  the  legislature  of  the  State  of  South  Dakota  in 
1905,  entitled,  "An  Act  to  provide  for  a  State  Food 
and  Dairy  Department;  to  prevent  the  adulteration, 
misbranding  and  imitation  of  foods,  beverages,  candies 
and  condiments  and  regulating  the  manufacture  and 
sale  of  dairy  products."  The  sections  of  the  Act  per- 
tinent to  this  inquiry  are  as  follows : 

"Section  6.  The  term  'food'  as  used  herein 
shall  include  all  articles  used  for  food,  drink, 
flavoring,  confectionery  or  condiment,  by  man  or 
domestic  animals,  whether  simple,  mixed  or  com- 
pound. ' ' 

"Section  8.  For  the  purposes  of  this  act  an 
article  shall  be  deemed  to  be  misbranded  in  either 
of  the  following  cases : 

1.  If  it  be  offered  for  sale  under  the  distinctive 
name  of  another  article. 

2.  If  it  is  labeled  or  branded  so  as  to  mislead 
the  purchaser  as  to  the  true  character  of  the  com- 
position of  the  article  or  compound. 

3.  If  the  package  containing  it  or  the  label  shall 


689 

bear  any  statement,  design  or  device  regarding 
the  ingredients,  or  the  substances  contained  there- 
in, which  statement,  design  or  device  shall  be  false 
or  misleading  in  any  particular,  or  if  the  same  is 
falsely  branded  or  labeled  as  to  the  state,  terri- 
tory or  country  in  which  it  is  manufactured  or 
produced. ' ' 

"Section  10.  It  shall  be  unlawful  for  any  per- 
son, acting  for  himself  or  as  the  servant  or  agent 
of  any  other  person,  firm  or  corporation ;  to  manu- 
facture, sell,  offer  or  expose  for  sale  any  article 
of  food  which  is  adulterated  or  misbranded  with- 
in the  meaning  of  this  act. ' ' 

"Section  11.  It  shall  be  unlawful  for  any  per- 
son to  sell,  offer  or  expose  for  sale  any  article  of 
prepared  food,  unless  the  true  name  of  the  manu- 
facturer and  the  location  of  the  factory  where  such 
article  of  food  is  prepared  is  plainly  printed  or 
stenciled  on  the  package,  box,  can,  carton  or  other 
container. ' ' 

"Section  34.  Any  person  violating  any  of  the 
provisions  of  the  preceding  sections  of  this  act 
shall  be  deemed  guilty  of  a  misdemeanor,  and  upon 
conviction  thereof,  shall  be  punished  by  a  fine  of 
not  less  than  ten  nor  more  than  one  hundred  dol- 
lars, or  by  imprisonment  in  the  county  jail  not  to 
exceed  thirty  days,  or  by  both  such  fine  and  im- 
prisonment for  each  offense." 

Section  11,  the  basis  of  this  inquiry,  is  to  be  sus- 
tained, if  at  all,  as  an  exercise  of  the  IState  police 
power. 

The  police  power  of  a  State  is  incapable  of  exact 
definition.  There  have  been,  however,  many  attempts 
to  define  the  power  in  a  general  way,  and  the  sum 
of  the  definitions  amounts  to  this:  That  the  police 
power  in  its  broadest  acceptation  means  the  general 
power  of  a  State  to  preserve  and  promote  the  public 
welfare  by  prohibiting  all  things  hurtful  to  the  com- 
fort, safety  and  welfare  of  society,  and  establishing 
such  rules  and  regulations  for  the  conduct  of  all  per- 


690 

sons  and  the  use  and  management  of  property  as  may 
be  conducive  to  the  public  interest. 

Christy  v.  Elliott,  216  111.,  31,  40  (June  23, 

1905). 

Munn  v.  Illinois,  94  IT.  S.,  125. 
Patterson  v.  Kentucky,  97  U.  S.,  504. 
New  Orleans  Gas  Co.  v.  Louisiana  Light  Co., 

115  U.  S.,  661. 

Lake  Shore  R.  Co.  v.  Smith,  173  U.  S.,  684. 
But  as  to  when  and  how  far  the  police  power  may 
be  legitimately  exercised  must  be  determined  in  each 
case  as  it  arises. 

In  Schollenberger  v.  Pennsylvania,  171  U.  S.,  1,  it 
was  held  that  in  the  execution  of  its  police  powers  the 
State  may  enact  such  legislation  as  it  may  deem  proper 
even  in  regard  to  articles  of  interstate  commerce,  for 
the  purpose  of  preventing  fraud  or  deception  in  the 
sale  of  any  commodity,  and  to  the  extent  that  it  may 
be  fairly  necessary  to  prevent  the  introduction  or  sale 
of  an  adulterated  article  within  the  limits  of  the  State. 
Undoubtedly  it  is  within  the  power  of  the  legislature 
to  enact  laws  to  prevent  the  adulteration  of  foods  and 
to  regulate  the  sale  of  adulterated  products  within  the 
State.  To  determine  the  State  policy  regarding  goods 
within  the  State  is  peculiarly  within  the  province  of 
the  legislature.  But  this  section  (11)  can  be  upheld 
only  as  a  means  of  carrying  into  effect  the  provisions 
of  the  law  intended  to  prevent  adulteration,  etc.  The 
question  is,  is  this  a  fair  exercise  of  legislative  discre- 
tion? In  Lawton  v.  Steele,  152  U.  S.,  133,  Justice 
Brown  said: 

1 1  To  justify  the  State  in  thus  interposing  its  au- 
thority in  behalf  of  the  public  it  must  appear, 
first,  that  the  interests  of  the  public  generally,  as 
distinguished  from  those  of  a  particular  class,  re- 
quire such  interference;  and,  second,  that  the 
means  are  reasonable  for  the  accomplishment  of 
the  purpose  and  not  unduly  oppressive  upon  indi- 
viduals. The  Legislature  may  not  under  the  guise 
of  protecting  the  public  interests  interfere  with 


691 

private  business,  or  impose  unusual  and  unnec- 
essary restrictions  upon  lawful  occupations." 
In  the  case  of  State  v.  Sherod,  80  Minn.,  446,  50  L. 
E.  A.,  660  (1900),  it  appears  that  a  statute  of  that 
State  required  all  manufacturers  and  sellers  of  all  com- 
pounds or  mixture  for  use  as  a  baking  powder  to  affix 
a  label  to  every  box  or  can  containing  the  name  and 
residence  of  the  manufacturer,  and  the  words :  l '  This 
baking  powder  is  composed  of  the  following  ingredi- 
ents, and  none  other"  (following  the  names  of  the  in- 
gredients). This  chapter  was  an  amendment  to  Chap- 
ter 7,  Gen.  Laws  1899,  which  required  such  a  label  to 
be  put  upon  boxes  and  cans  containing  alum,  in  any 
form  or  shape,  as  a  constituent.  The  effect  of  the 
amendment  of  1899  was  to  require  the  label  to  be 
placed  upon  all  baking  powders,  regardless  of  whether 
they  contained  alum  or  any  deleterious  substance,  or 
were  pure  and  healthful.  Defendant  was  convicted  of 
selling  baking  powder  without  the  required  label.  The 
court  held  that  the  law  in  question  was  constitutional 
and  within  the  police  powers  of  the  State ;  that  it  rea- 
sonably tended  to  prevent  fraud,  and  was  not  an  in- 
fringement upon  private  rights,  and  was  not  class 
legislation. 

So  in  Stole  v.  Thompson,  44  Minn.,  271  (1890),  the 
statutes  of  Minnesota  relating  to  the  adulteration  of 
baking  powder,  referred  to  in  the  preceding  case,  re- 
quiring labels  on  cans  of  baking  powder  containing 
alum  to  be  marked  so  as  to  show  that  fact  and  the 
name  and  residence  of  the  manufacturer,  were  held 
constitutional. 

In  People  v.  Bishopp,  94  New  York  Suppl.,  773 
(June  29,  1905),  affirming  89  N.  Y.  S.,  709,  it  appears 
that  the  New  York  Agricultural  Law,  Sec.  70e,  pro- 
hibits the  sale  as  an  article  of  food  of  veal  from  a  calf 
under  four  weeks  old  when  killed.  Section  70f  re- 
quires all  veal  shipped  to  have  annexed  thereto  a  tag 
stating  the  name  of  the  person  who  raised  the  calf, 
the  name  of  the  shipper,  the  points  of  shipping  and  the 
destination  and  age  of  the  calf.  It  was  held  that  sec- 


692 

tion  70f  was  evidently  passed  to  secure  the  enforce- 
ment of  the  preceding  section  and  was  clearly,  as  was 
such  preceding  section,  within  the  police  power  of  the 
legislature. 

The  court  said: 

"Section  70f  of  such  law,  as  amended  by  Laws 
1902,  p.  59,  c.  30,  was  evidently  passed  to  secure 
the  enforcement  of  the  provisions  of  the  prior  sec- 
tion, and  it  is  against  the  validity  of  this  section 
that  this  demurrer  is  aimed.  This  section  does 
not  prohibit  the  shipping  or  sale  of  veal.  It  merely 
requires  that  all  veal  that  is  shipped  shall  have 
annexed  thereto  a  tag  stating  the  name  of  the  per- 
son who  raised  the  calf,  the  name  of  the  shipper, 
the  points  of  shipping,  and  the  destination  and 
age  of  the  calf.  Many  calves  so  shipped  are  over 
four  weeks  old.  Such  are  a  legitimate  article  of 
food ;  but  many  are  under  that  age,  and  are  there- 
fore not  a  healthful  food,  nor  a 'legitimate  article 
of  commerce  for  that  purpose.  Their  appearances, 
however,  are  substantially  the  same.  To  an  un- 
instructed  eye  they  can  not  be  distinguished,  and 
hence  deceit  is  so  easy  that  it  is  difficult,  and  prac- 
tically impossible,  to  enforce  the  law  unless  breed- 
ers and  shippers  are  required  to  so  mark  them 
that  the  healthful  ones  may  be  distinguished  from 
the  unhealthful.  To  meet  this  difficulty,  the  sec- 
tion in  question  was  passed.  Its  provisions  are 
necessary  and  reasonable  to  complete  the  scheme 
which  the  Legislature  has  devised  to  protect  the 
public  from  having  forced  upon  its  markets  a 
species  of  food  that  is  notoriously  unhealthy  and 
injurious.  The  purpose  of  its  provisions  is  as 
clearly  within  the  police  power  of  the  Legislature 
as  are  the  provisions  of  section  70e,  and  the  fact 
that  the  legitimate  article  as  well  as  the  illegiti- 
mate is  hereby  required  to  be  tagged  does  not 
affect  its  necessity  or  reasonableness.  Neither 
does  the  section  violate  article  1,  Par.  8,  cl.  3,  of 
the  federal  constitution.  True,  the  prohibition 
against  shipping  without  a  tag  is  broad  enough 


693 

to  apply  to  veals  intended  to  be  shipped  to  another 
state,  but  that  does  not  interfere  with  the  regula- 
tion of  commerce  between  the  states." 
However,  in  the  important  case  of  People  v.  Hawk- 
ins, 157  N.  Y.,  1,  42  L.  E.  A.,  490,  a  statute  of  the 
State  of  New  York  provided  that  all  convict  made 
goods,  before  being  sold  or  exposed  for  sale,  be  branded 
11  convict  made,"  followed  by  the  year  and  name  of 
the  penitentiary,  and  also  that  such  goods  should  not 
be  exposed  for  sale  within  the   State  without   such 
brand.     The  purpose  of  the  law  was  to  promote  the 
general  welfare  of  the  laboring  classes  by  suppressing 
in  some  measure  the  sale  of  prison  made  goods.    This 
act  was  held  unconstitutional.    The  court  said : 

"The  scrubbing  brush  in  question  was  beyond 
all  doubt  an  article  of  property  in  which  the  de- 
fendant could  lawfully  deal.  He  is  forbidden,  how- 
ever, by  this  statute,  under  all  the  penalties  of 
the  criminal  law,  from  buying  or  selling  or  hav- 
ing it  in  his  possession,  except  upon  the  condition 
that  he  shall  attach  to  it  a  badge  of  inferiority, 
which  diminishes  the  value  and  impairs  its  selling 
qualities.  It  is  not  claimed  that  there  is  any  dif- 
ference in  the  quality  of  this  scrubbing  brush, 
when  compared  with  one  of  the  same  grade  or 
character  made  outside  the  prisons.  There  is  no 
pretense  that  the  act  was  passed  to  suppress  any 
fraudulent  practice,  or  that  any  such  practice  ex- 
isted with  respect  to  such  goods.  The  validity  of 
the  law  must  depend  entirely  upon  the  exercise 
of  the  police  power  to  enhance  the  price  of  labor 
by  suppressing  through  the  instrumentality  of  the 
criminal  law,  the  sale  of  the  products  of  prison 
labor. 

The  citizen  can  not  be  deprived  of  his  property 
without  due  process  of  law.  The  principle  em- 
bodied in  this  constitutional  guaranty  is  not  lim- 
ited to  the  physical  taking  of  property.  Any  law 
which  annihilates  its  value,  restricts  its  use,  or 
takes  away  any  of  its  essential  attributes,  comes 
within  the  purview  of  this  limitation  upon  legis- 


694 

lative  power.  The  validity  of  all  such  laws  is  to 
be  tested  by  the  purpose  of  their  enactment,  and 
the  practical  effect  and  operation  that  they  may 
have  upon  property.  "  A  law  which  interferes  with 
property  by  depriving  the  owner  of  the  profitable 
and  free  use  of  it,  or  hampers  him  in  the  appli- 
cation of  it  for  the  purposes  of  trade  or  commerce, 
or  imposes  conditions  upon  the  right  to  hold  or 
sell  it,  may  seriously  impair  its  value,  against 
which  the  Constitution  is  a  protection.  The  fact 
that  legislation  hostile  to  the  rights  of  property 
assumes  the  guise  of  a  health  law  or  a  labor  law 
will  not  save  it  from  judicial  scrutiny,  since  the 
courts  can  not  permit  that  to  be  done  by  indirec- 
tion which  can  not  be  done  directly.  The  guaranty 
against  depriving  the  citizen  of  his  liberty  com- 
prehends much  more  than  the  exemption  of  his 
person  from  all  unlawful  restraint.  It  includes 
the  right  to  engage  in  any  lawful  business,  and 
to  exercise  the  faculties  in  all  lawful  ways  in  any 
lawful  trade,  profession,  or  vocation.  All  laws, 
therefore,  which  impair  or  trammel  these  rights, 
or  impose  arbitrary  conditions  upon  his  right  to 
earn  a  living  in  the  pursuit  of  a  lawful  business, 
are  infringements  upon  his  fundamental  rights 
of  liberty,  which  are  under  constitutional  protec- 
tion. These  rights  may,  doubtless,  be  affected  to 
some  extent  by  the  exercise  of  police  power,  which 
is  inherent  in  every  sovereign  state.  But  that 
power,  however  broad  and  extensive,  is  not  above 
the  Constitution.  The  conduct  of  the  individual 
and  the  use  of  property  may  be  affected  by  its 
lawful  and  proper  exercise  in  cases  of  overruling 
necessity,  and  for  the  public  good.  The  preserva- 
tion of  public  order,  the  protection  of  the  public 
health,  and  the  prevention  of  disease,  the  sale  of 
articles  of  unwholesome  or  adulterated  food,  the 
calamities  caused  by  fire,  and  perhaps  other  sub- 
jects, relating  to  the  safety  and  welfare  of  society, 
are  within  its  scope.  But  no  law  which  is  other- 
wise objectionable  as  in  conflict  with  the  funda- 


69'5 

mental  guaranties  of  the  Constitution  can  be  up- 
held under  the  police  power,  unless  the  courts  can 
see  that  it  has  some  plain  or  reasonable  relation 
to  those  subjects,  or  some  of  them.  These  prin- 
ciples have  been  so  fully  discussed  and  sanctioned 
by  judicial  authority,  and  so  often  asserted  that 
they  may  now  be  regarded  as  elementary. 

£v4t-4t4£*&w'4i 

That  all  legislation  of  this  character,  with  this 
end  in  view,  which  subjects  the  individual  to  crim- 
inal prosecution  unless  he  will  comply  with  regu- 
lations in  the  sale  of  such  goods  that  are  intended 
to  suppress  their  value  or  demand  in  the  market, 
is  in  violation  of  the  Constitution,  can  not  be 
doubted.  It  would  be  trifling  with  the  Constitu- 
tion to  attempt  to  uphold  this  law  on  the  ground 
that  all  producers  or  vendors  of  goods  may  be 
required  to  tell  the  truth  concerning  them,  both 
as  to  their  quality  and  the  means  by  which  or  the 
place  where  they  were  manufactured.  A  knowl- 
edge of  the  truth  concerning  the  origin  of  every 
article  of  property  which  is  the  subject  of  sale, 
trade  or  commerce  can  not  be  essential  to  the  pub- 
lic welfare ;  and,  even  if  it  was,  the  law  could 
be  effective  only  when  applied  to  all  property 
alike,  and  not  limited  to  articles  made  in  certain 
places,  and  by  a  certain  class  of  workmen.  Any 
attempt  to  carry  the  police  power  to  such  an  ex- 
tent as  to  require  the  owner  of  an  article  of  prop- 
erty kept  for  sale,  such  as  a  scrubbing  brush,  to 
label  it  with  the  history  of  its  origin,  and  to  indi- 
cate the  place  where  it  was  made,  and  the  class  of 
workmen  that  produced  it,  and  to  enforce  such 
regulations  by  the  aid  of  the  criminal  law,  must 
be  regarded  as  an  inexcusable  and  intolerable  in- 
vasion of  the  rights  and  liberty  of  the  citizen. 
There  is  nothing  in  the  character  or  effect  of 
prison  labor  to  justify  such  legislation." 
And  again: 

"The  state,  while  permitting  such  property  to 
come  within  its  jurisdiction  in  the  regular  course 


696 

of  trade,  can  not  then  impair  its  value  by  hostile 
legislation,  without  a  violation  of  the  constitu- 
tional guaranties  for  the  protection  of  property. 
Aside  from  the  peculiar  restrictions  of  revenue 
laws,  the  merchant  or  dealer  may  buy  his  goods 
where  he  can  obtain  them  to  the  best  advantage, 
and  any  restrictions  upon  his  freedom  of  action 
in  this  respect  by  state  law  is,  in  a  broad  sense,  an 
invasion  of  his  right  of  liberty,  since  that  term 
comprehends  the  right  of  the  individual  to  pur- 
sue any  lawful  calling.  I  think  that  the  statute 
in  question  is  in  conflict  with  the  Constitution  of 
this  State,  since  it  interferes  with  the  right  to  ac- 
quire, possess  and  dispose  of  property,  and  with 
the  liberty  of  the  individual  to  earn  a  living  by 
dealing  in  the  article  embraced  within  the  scope 
of  the  law.  It  is  an  unauthorized  limitation  upon 
the  freedom  of  the  individual  to  buy  and  sell  all 
such  articles,  subject  only  to  the  law  of  supply  and 
demand,  and  the  legislation  is  not  within  the  scope 
of  the  police  power. ' ' 

In  Ex  parte  Hay  den,  82  Pac.,  315  (Cal.,  Sept.  6, 
1905),  it  was  held  tjiat  the  California  law  of  1903,  pro- 
viding that  all  fruits,  green  and  dried,  contained  in 
packages  to  be  shipped  or  offered  for  shipment,  shall 
have  stamped  on  the  outside  of  every  such  package, 
in  legible  letters  of  certain  dimensions,  a  statement 
truly  and  correctly  designating  the  county  and  imme- 
diate locality  in  which  such  fruit  was  grown,  was  not 
a  proper  exercise  of  the  State's  police  power,  but  was 
invalid  as  an  unlawful  invasion  of  personal  liberty, 
and  imposed  onerous  and  unnecessary  burdens  upon 
business  and  property. 

The  question  is  not  free  from  doubt.  If  the  require- 
ment tends  in  any  way  to  protect  the  public  health, 
or  if  it  aids  in  the  enforcement  of  the  provisions  of 
the  act,  it  will  probably  be  upheld.  If,  however,  it 
does  not  subserve  any  reasonable  public  purpose,  it 
can  not  be  justified  as  an  exercise  of  the  police  power 
of  the  State.  If  a  prepared  food  is  a  lawful  article 
of  commerce,  it  can  not  be  denied  entry  into  a  State. 


697 

After  the  bulk  is  once  broken,  or  after  the  sale  in  the 
original  package,  the  property  becomes  a  part  of  the 
mass  of  property  within  the  State,  and  is  subject  to 
State  regulation.  Furthermore,  the  State  is  neces- 
sarily without  direct  recourse  against  the  non-resident 
manufacturer  who  fails  to  comply  with  section  11,  and 
the  only  remedy  is  against  the  seller.  It  will  be  no- 
ticed that  section  11  merely  provides  a  penalty  against 
the  seller.  The  purpose  of  the  requirement  is  evi- 
dently to  give  notoriety  to  the  manufacturer  and,  in 
the  case  of  adulterated  articles,  to  thus  prevent  their 
subsequent  sale. 

By  requiring  the  disclosure  of  the  name  of  the  manu- 
facturer and  the  location  of  the  factory,  it  is  conceiv- 
able that  in  case  of  adulteration  or  impurities,  the  pur- 
chasing public  will  be  benefited.  It  will  be  afforded 
the  occasion  of  making  public  the  name  and  residence 
of  the  offender  and  of  pursuing  him  at  least  for  dam- 
ages, if  such  have  been  sustained.  It  seems  to  me  to 
be  begging  the  question  to  say  that  the  particular  ar- 
ticle is  unadulterated  and  healthful.  The  very  pur- 
pose of  the  law  is  to  enable  the  public  to  trace  the  ar- 
ticle to  its  source,  if  it  proves  impure.  Nor  do  I  see 
wherein  the  law  affects  the  value  of  a  brand.  The 
brand  or  trade-mark  is  not  infringed  by  requiring  the 
name  of  the  manufacturer  and  place  of  production  to 
be  printed  or  stenciled  on  the  package. 

Of  course,  it  is  impossible  to  forecast  just  what  con- 
clusion will  be  reached  by  a  court  in  construing  this 
section.  It  will  be  largely  a  matter  of  individual  senti- 
ment by  the  members  of  the  court  as  to  whether  this 
provision  can  be  said  to  be  reasonably  intended  to  sub- 
serve a  public  purpose,  and  tends  to  preserve  the  health 
of  the  people;  the  court  will  always  endeavor,  under 
the  well  known  rules  of  law,  to  uphold  the  validity  of 
a  legislative  enactment  by  every  possible  intendment. 
I  am  of  the  opinion,  in  view  of  the  strong  trend  to  up- 
hold so-called  pure  food  laws,  that  the  law  in  question 
probably  will  be  sustained. 

In  this  connection,  it  is  to  be  observed  that  section 
8  of  the  South  Dakota  law  repeats,  in  effect,  the  pro- 


698 

visions  of  the  United  States  statute  in  respect  to  the 
branding  or  labeling  of  food  products.  That  law  is 
as  follows  (32  Stat.  L.,  632,  Act  July  1,  1902) :' 

''That  no  person,  or  persons,  company  or  cor- 
poration, shall  introduce  into  any  State  or  Terri- 
tory, of  the  United  States  or  the  District  of  Colum- 
bia, from  any  other  State  or  Territory  of  the 
United  States  or  the  District  of  Columbia,  or  sell 
in  the  District  of  Columbia  or  in  any  territory 
any  dairy  or  food  products  which  shall  be  falsely 
labeled  or  branded  as  to  the  State  or  Territory  in 
which  they  are  made,  produced  or  grown,  or  cause 
or  procure  the  same  to  be  done  by  others. 

SEC.  2.  That  if  any  person  or  persons  violate 
the  provisions  of  this  Act,  either  in  person  or 
through  another,  he  shall  be  guilty  of  a  misde- 
meanor and  shall  be  punished  by  a  fine  of  not 
less  than  five  hundred  nor  more  than  two  thou- 
sand dollars ;  and  that  the  jurisdiction  for  the 
prosecution  of  said  misdemeanor  shall  be  within 
the  district  of  the  United  States  court  in  which  it 
is  committed." 

The  United  States  Attorney  General  has  given 
three  opinions  in  relation  to  this  Act,  holding  as  fol- 
lows: 

"The  act  of  July  1,  1902  (32  Stat.,  632),  which 
prohibits  the  false  labeling  or  branding  of  dairy 
and  food  products  which  enter  into  interstate  com- 
merce, does  not  provide  that  such  products  shall 
be  labeled  or  branded  so  as  to  show  the  State  or 
Territory  in  which  they  are  produced.  It  provides 
merely  that  such  products  shall  not  be  falsely 
labeled  or  branded  as  to  the  State  or  Territory  in 
which  they  are  made,  produced  or  grown.  The 
mere  omission,  in  the  instances  given,  of  the  place 
of  manufacture  can  not  be  said  to  be  in  violation 
of  that  law;  nor  is  the  name  of  the  wholesale 
dealer  on  the  label  or  brand  necessarily  a  repre- 
sentation that  he  is  the  manufacturer  or  producer. 
(24  Opinions  Atty.  Gen'l,  p.  125.) " 
"The  act  of  July  1,  1902  (32  Stat.,  632),  pro- 


699 

liibiting  the  introduction  into  any  State  or  Terri- 
tory of  any  dairy  or  food  product  which  shall  have 
been  falsely  labeled  or  branded  as  to  the  State  or 
Territory  where  grown,  applies  not  only  to  do- 
mestic articles,  but  also  to  those  imported  from- 
foreign  countries  which  are  labeled  as  being  of 
domestic  origin.  (24  Opinions  Atty.  Gen'l,  p. 
675.)" 

' '  The  Department  of  Agriculture  and  the  Treas- 
ury Department  have  no  jurisdiction  or  power 
under  the  act  of  March  3,  1903  (32  Stat.,  1157),  to 
prevent  or  punish  the  false  labeling  or  branding 
of  dairy  or  food  products  after  they  have  passed 
the  custom-house  and  are  delivered  to  the  owner 
or  consignee.  (24  Opinions  Atty.  Gen'l,  p.  675.)" 

"The  use  of  the  words  'Birkenwald's  Daisy 
Sugar  Corn,  S.  Birkenwald  Co.,  Milwaukee,  Wis.,' 
by  that  company  on  canned  goods  produced  in  an- 
other State,  is  a  violation  of  section  1  of  the  act 
of  July  1,  1902  (32  Stat.,  632),  which  prohibits 
the  false  labeling  or  branding  of  dairy  or  food 
products.  These  words  clearly  imply  that  the 
goods  referred  to  were  manufactured  or  prepared 
in  Wisconsin. 

Wherever  the  natural  inference  to  be  drawn 
from  the  form  or  words  of  a  brand  or  label  is 
contrary  to  the  fact  as  to  the  State  or  Territory 
in  which  the  article  referred  to  is  made,  produced, 
or  grown,  the  case  would  seem  to  be  within  the 
letter  and  spirit  of  the  above-named  act.  (24 
Opinions  Atty.  Gen'l,  p.  695.)" 


NOTE: — After  the  rendition  of  the  above  opinion  the  Supreme  Court 
of  South  Dakota  on  November  29,  1905,  decided  that  the  law  in  question 
was  unconstitutional.  In  the  case  of  Jewett  Bros,  fy  Jewett  v.  Smail, 
105  N.  W.,  738  (S.  D.),  it  was  held  that  Section  11  (quoted  on  page  4 
of  this  opinion)  was  unreasonable  and  void,  and  unduly  interfered  with 
interstate  and  foreign  commerce.  The  court  then  perpetually  enjoined 
the  enforcement  of  Section  11  of  the  Act.  See,  also,  the  following  opin- 
ion of  November  4,  1905  (Heath  &  Milligan  Mfg.  Co.),  as  to  the  valid- 
ity of  the  North  Dakota  "pure  paint"  law. — Ed. 


700 


THE  CONSTITUTIONALITY  OF  THE  PURE  PAINT  LAW  OF  NORTH 
DAKOTA  OF  1905  AND  THE  EFFECT  OF  PROVISIONS  THERE- 
IN REQUIRING  THE  INGREDIENTS  OF  THE  PAINT  TO  BE 
STATED  ON  THE  LABEL  AND  THE  RIGHT  OF  THE  LEGISLA- 
TURE TO  FIX  AN  ARBITRARY  STANDARD  FOR  PURE  PAINT. 

(Heath  &  Milligan  Manufacturing  Company,  Novem- 
ber 4,  1905.) 

"We  are  enclosing  herewith  copy  of  a  Special 
Bulletin  No.  3,  issued  April  this  year  by  the  Gov- 
ernment Agricultural  Experimental  Station,  Agri- 
cultural College,  N.  D. 

Our  object  in  sending  this  to  you  is  to  ask  that 
you  call  the  attention  of  Mr.  Mayer  to  Senate  Bill 
No.  49,  Adulteration  of  Paint,  on  pages  14  and  15, 
which  is  to  go  into  effect  January  1,  1906,  and  ask 
Mr.  Mayer's  opinion  as  to  the  legality  of  such  a 
law. 

The  point  with  us  is,  can  the  legislators  of  any 
state  arbitrarily  fix  a  standard  of  quality  in  an  ar- 
ticle such  as  mixed  or  prepared  paint,  and  can 
they  compel  a  manufacturer  to  make  public  on  the 
labels  of  his  packages  his  formulae,  which  are 
secret  and  a  part  of  his  stock  in  trade!  There  is 
no  point  of  public  protection  or  safety  involved 
in  this  proposition.  Obviously  it  is  solely  in  the 
interests  of  a  particular  class  of  paint  manufac- 
turers. ' ' 

The  law  referred  to  is  what  is  termed  the  Adulter- 
ated Paint  Act  of  North  Dakota,  approved  March  6, 
1905,  and  in  force  from  and  after  January  1,  1906. 
The  Act  is  as  follows : 

"Be  it  enacted,  etc.: 

Section  1.  Every  person,  firm  or  corporation 
who  manufactures  for  sale  or  exposes  for  sale,  or 
sells  within  this  state,  any  white  lead,  paint  or 
compound  intended  for  use  as  such  shall  label  the 
same  in  clear  and  distinct  gothic  letters  upon  a 
white  background  and  show  the  true  per  cent  of 
each  mineral  constituent  contained  in  said  paint, 


701 

or  if  other  than  linseed  oil  is  used  in  its  prepara- 
tion, the  names  of  such  oils  or  substitutes  shall  be 
shown,  together  with  the  percentage  thereof,  and 
every  person,  firm  or  corporation  who  manufac- 
tures for  sale  or  exposes  for  sale  or  sells  within 
this  state  any  mixed  paint  or  compound  intended 
for  use  as  such,  which  contains  any  ingredients 
other  than  pure  linseed  oil,  pure  carbonate  of  lead, 
oxide  of  zinc,  turpentine,  Japan  dryer  and  pure 
colors,  shall  be  deemed  guilty  of  a  misdemeanor 
and  upon  conviction  thereof,  shall,  for  each  of- 
fense, be  punished  by  a  fine  of  not  less  than  twenty- 
five  and  not  more  than  one  hundred  dollars  and 
costs,  or  by  imprisonment  in  the  county  jail  not 
exceeding  sixty  days ;  provided,  that  any  such  per- 
son, firm  or  corporation  who  shall  manufacture  for 
sale  or  expose  for  sale,  or  sell  within  this  state 
any  white  lead,  paint  or  mixed  paint,  containing 
ingredients  other  than  those  as  above  enumerated, 
shall  not  be  deemed  guilty  of  a  violation  of  this 
act  in  case  the  same  be  properly  labeled  showing 
the  quantity  or  amount  of  each  and  every  in- 
gredient used  therein  and  not  specified  above,  and 
the  name  and  residence  of  the  manufacturer  or 
person  for  whom  it  is  manufactured. 

Section  2.  The  having  in  possession  by  any  per- 
son, firm  or  corporation  dealing  in  said  articles, 
any  articles  or  substances  hereinbefore  described 
and  not  properly  labeled,  as  provided  by  section 
1  of  this  act,  shall  be  considered  prima  facie  evi- 
dence that  the  same  is  kept  by  such  person  or  firm 
in  violation  of  the  provisions  of  this  act  and  pun- 
ishable under  it. 

Section  3.  The  director  of  the  North  Dakota 
Government  Agricultural  Experiment  Station  is 
charged  with  the  proper  enforcement  of  all  the 
provisions  of  this  act. 

Section  4.  The  said  director  and  the  assistants, 
experts,  chemists  and  agents  shall  be  duly  author- 
ized for  the  purpose,  and  shall  have  access  and  in- 
gress to  all  places  of  business,  factories,  stores 


702 

and  buildings  used  for  the  manufacture  or  sale  of 
paints.  They  shall  also  have  power  and  authority 
to  open  any  package,  can,  jar,  tub,  or  other  recep- 
tacle containing  white  lead  paints  that  may  be 
sold,  manufactured  or  exposed  for  sale,  in  viola- 
tion of  the  provisions  of  the  act. 

Section  5.  This  act  shall  take  effect  and  be  in 
force  from  and  after  January  1,  1906. ' ' 
This  law  is  passed  in  the  exercise  of  the  police  pow- 
ers of  the  State.  In  my  opinion  of  October  4th,  in 
response  to  an  inquiry  from  the  William  Henning 
Company,  I  discussed  the  extent  of  the  State  police 
powers.  To  that  opinion  and  the  cases  cited  thereby 
I  refer.  The  theory  of  the  legislature  of  North  Da 
kota  in  enacting  this  law  was  undoubtedly  to  prevent 
fraud  and  deception  in  the  sale  of  an  article  of  com 
mon  use.  The  statute  seeks  to  suppress  false  pre- 
tenses and  to  promote  fair  dealing  in  paints  and  white 
lead.  The  mere  wisdom  or  unwisdom  of  the  act  is  not 
for  the  courts  to  decide.  It  was  said  by  the  Supreme 
Court  of  Minnesota  in  Stolz  v.  Thompson,  44  Minn., 
271  (1890),  when  the  objection  was  raised  thairthe  law 
was  in  favor  of  a  certain  class  of  dealers  (in  that  case 
an  act  against  alum  baking  powders) : 

"The  provisions  of  this  law  are  not  such  as  to 
justify  the  court  in  construing  it  to  have  been  in- 
tended by  the  legislature  to  accomplish  other  re- 
sults than  a  proper  police  regulation  of  the  busi- 
ness, and  the  protection  of  the  people  from  hav- 
ing imposed  upon  them  to  be  used  in  their  food,  a 
substance  which  they  may  be  unwilling  to  pur- 
chase or  to  use.  Of  course,  if  the  law  were  ob- 
viously a  mere  dishonest  guise  for  favoring  one 
class  of  goods  or  dealers  at  the  expense  of  an- 
other, the  case  would  be  very  different ;  but  legis- 
lative enactments  are  not  to  be  regarded  as  in- 
tended as  mere  dishonest  pretences  for  the  accom- 
plishment of  results  wholly  beyond  the  constitu- 
tional and  proper  domain  of  legislation,  unless  it 
is  perfectly  obvious  and  unquestionable  that  such 
is  the  case." 


703 

In  State  v.  Lai/ton,  160  Mo.,  474,  495,  the  court  said: 
"It  seems  to  us  that  in  the  nature  of  things 
there  is  a  wide  difference  between  legislation  pro- 
hibiting or  regulating  the  manufacture  and  sale  of 
an  article  which  is  manufactured  with  a  design  to 
imitate  a  standard  or  superior  article,  and  pass 
it  off  on  the  public,  which  can  not  readily  detect 
the  imposition,  for  something  different  from  what 
it  is,  and  the  manufacture  and  sale  of  an  article 
which  in  truth  and  fact  is  admitted  to  be  innocu- 
ous and  healthful,  and  in  general  use,  and  about 
which  there  is  neither  secrecy  nor  imitation  of  an- 
other article  of  conceded  purity  and  wholesome- 
ness." 

The  law  in  question  is  drawn  very  inaccurately  and 
in  somewhat  ambiguous  and  inappropriate  language. 
The  courts,  however,  must  endeavor  to  sustain  it  and 
make  clear  its  meaning.  The  effect  of  the  law  is  that 
if  white  lead,  mixed  paints  or  compounds  contain  any 
other  ingredients  than  pure  linseed  oil,  pure  carbonate 
of  lead,  oxide  of  zinc,  turpentine,  Japan  dryer  and 
pure  colors,  such  other  ingredients  and  the  quantity 
and  amount  thereof  must  be  properly  specified  on  the 
labels  of  the  paints,  together  with  the  name  and  resi- 
dence of  the  manufacturer  or  person  for  whom  it  is 
manufactured.  In  other  words,  the  Act  does  not  pro- 
hibit the  sale  of  paints  that  do  not  conform  to  the 
standards  set  by  the  Act,  but  regulates  the  sale  there- 
of. 

In  22  Am.  &  Eng.  Encl.  (2d  Ed.),  934  (citing  author- 
ities), the  law  is  thus  summarized: 

"The  police  power  is  frequently  exercised  for 
the  purpose  of  protecting  the  public  against  fraud, 
imposition  and  deception.    Thus  the  manufacture 
or  sale  of  adulterated  food  products  or  imitations 
of  or  substitutes  for  articles  of  "food  may  be  pro- 
hibited absolutely,  or  unless  the  article  is  labeled 
so  as  to  show  its  true  character,  or  in  some  way 
is  distinguished  from  the  genuine  article." 
So  by  the  law  in  question,  the  legislature,  although 
-not  regulating  a  food  product,  has,  nevertheless,  in  the 


704 

exercise  of  its  police  powers,  endeavored  to  prevent 
fraud  and  deception  in  the  sale  of  paints  to  the  injury 
of  the  public. 

In  Steiner  v.  Ray,  84  Ala.,  93,  it  was  held  that  a  stat- 
ute whose  controlling  purpose  was  to  guard  the  agri- 
cultural public  against  compounds  sometimes  sold  as 
fertilizers,  by  fixing  on  sellers  a  statutory  guaranty 
that  fertilizers  sold  by  them  contain  the  chemical  in- 
gredients and  in  the  proportions  represented,  was  with- 
in the  pale  of  legitimate  police  regulation. 

Likewise  it  has  been  held  that  it  is  a  valid  exercise 
of  the  police  powers  for  the  legislature  to  prevent 
fraud  upon  the  public  by  requiring  that  all  silverware 
marked  "sterling"  shall  contain  a  fixed  quantity  of 
pure  silver. 

People  v.  Webster,  50  N.  Y.  S.,  1135. 
In  Schollenberger  v.  Pennsylvania,  171  U.  S.,  1,  the 
United  States  Supreme  Court  said: 

"The  general  rule  to  be  deduced  from  the  deci- 
sions of  this  court  is  that  a  lawful  article  of  com- 
merce can  not  be  wholly  excluded  from  importa- 
tion into  a  state  from  another  state  where  it  was 
manufactured  or  grown.  A  State  has  power  to 
regulate  the  introduction  of  any  article,  including 
a  food  product,  so  as  to  insure  purity  of  the  ar- 
ticle imported,  but  such  power  does  not  include 
the  total  exclusion  even  of  an  article  of  food. ' ' 
And: 

* '  The  legislature  of  the  state  has  power  in  many 
cases  to  determine  as  a  matter  of  state  policy 
whether  to  permit  the  manufacture  and  sale  of 
articles  within  the  state  or  to  entirely  forbid  such 
manufacture  and  sale,  so  long  as  the  legislation  is 
confined  to  the  manufacture  and  sale  within  the 
state. ' ' 

The  State  may  exclude  that  which  is  bad,  but  not 
that  which  is  pure  under  the  guise  of  regulating  the 
bad. 

Inasmuch  as  the  sale,  distribution  and  consumption 
of  goods  after  they  have  become  mingled  with  other 
goods  in  the  State,  forms  no  part  of  interstate  com- 


705 

merce  (Bobbins  v.  Shelby  Co.,  Tax  Dist.,  120  U.  S., 
497),  and  as  this  law  regulates  only  the  sale  within 
the  State,  the  question  of  the  right  to  totally  prohibit 
the  introduction  from  another  State  of  the  pure  ar- 
ticles of  paint  does  not  arise  in  this  case.  Of  course, 
paints  in  the  original  packages  may  be  imported  into 
the  State  without  complying  with  the  law,  but  the  law 
must  be  obeyed  as  to  sales  after  the  paint  has  become 
part  of  the  general  property  within  the  State. 

In  Plumley  v.  Massachusetts,  155  U.  S.,  462,  a  stat- 
ute of  that  State  prevented  the  sale  within  the  State 
of  oleomargarine  colored  in  imitation  of  butter,  but 
did  not  prevent  its  sale  in  such  a  character  as  would 
advise  the  purchaser  of  its  real  nature.  The  statute 
was  upheld  as  constitutional,  and  not  a  burden  on  in- 
terstate commerce.  The  case  was  based  entirely  upon 
the  theory  of  the  right  of  a  state  to  prevent  fraud  and 
deception  in  the  sale  of  any  article,  and  it  was  in  the 
fraud  and  deception  contained  in  selling  the  article  for 
what  it  was  not,  and  in  selling  it  so  that  it  should  ap- 
pear to  be  another  and  a  different  article,  that  this 
right  of  the  State  was  upheld. 

To  the  same  effect  see: 

Grossman  v.  Lurman,  171  N.  Y.,  329;  -s.  c.,  192 

U.  S.,  189. 
Arbuckle  v.  Blackburn,  113  Fed.,  516;  s.  c., 

191  U.  S.,  406. 
People  v.  Niagara  Fruit  Co.,  75  App.  Div.,  11 ; 

77  N.  Y.  S.,  805.    Aff 'd.  173  N.  Y.,  629. 
Commonwealth  v.  Kevin,  202  Pa.,  23. 

In  respect  to  requiring  labels  on  the  articles  to  show 
the  quantity  and  percentages  of  the  constituents  of  the 
white  leads  or  mixed  paints,  statutes  have  been  gen- 
erally upheld  which  required  the  component  part  of 
compounds  to  be  shown  on  the  packages. 

In  Palmer  v.  State,  39  Ohio  St.,  236,  it  was  held  to 
be  within  the  power  of  the  legislature  to  prohibit  the 
sale  of  substances  having  a  semblance  to  butter  or 
cheese,  unless  each  package  of  such  substance  should 
have  plainly  stamped  upon  it  the  name  of  each  article 
entering  into  or  used  in  the  composition  of  such  sub- 


706 

stance ;  and  it  was  held  no  defense  to  a  prosecution  that 
the  substances  were  patented. 

In  State  v.  Snow,  81  Iowa,  642,  an  Act  was  held 
valid,  requiring  all  compound  lard  to  have  the  words 
'  *  compound ' '  lard,  together  with  the  name  and  propor- 
tions of  the  ingredients  composing  the  same,  upon  the 
top  or  outer  side  of  the  package  containing  the  same. 
In  State  v.  Aslesen,  50  Minn.,  5,  an  Act  was  held 
valid  as  within  the  police  power  requiring  the  seller 
of  any  article  made  as  a  substitute  for  or  designed  to 
take  the  place  of  lard  to  disclose  to  the  purchaser  by 
label  or  card  the  nature  and  ingredients  of  the  article 
offered  for  sale. 

In  State  v.  Sherod,  80  Minn.,  446,  50  L.  E.  A.,  660,  a 
statute  was  held  constitutional,  requiring  all  manufac- 
turers and  sellers  of  all  compounds  or  mixtures  in- 
tended for  use  as  a  baking  powder  to  affix  a  label  to 
every  box  or  can,  containing  the  name  and  residence 
of  the  manufacturer,  and  the  words,  "This  baking- 
powder  is  composed  of  the  following  ingredients,  and 
none  other"  (following  the  names  of  the  ingredients). 
The  court  there  said : 

"Appellants  advance  the  argument  that,  if  the 
baking  powders  are  pure  cream  of  tartar  powders, 
there  is  no  reason  requiring  their  ingredients  to 
be  published,  and  it  is  an  unwarranted  interfer- 
ence with  a  manufacturer's  or  dealer's  business  to 
put  him  to  that  expense  and  annoyance.  Further, 
that  the  public  will  receive  no  benefit  from  such 
labels;  that  purchasers  of  such  powders  do  not 
know  the  meaning  of  the  terms  used;  that  it  is 
unjust  to  cause  a  manufacturer  or  dealer  in  pure 
powders  to  submit  to  such  a  law,  for  the  purpose 
of  exposing  those  who  make  or  deal  in  a  harniful 
article ;  that  if  such  a  law  can  be  enforced  against 
baking  powders,  without  reference  to  their  purity, 
then  pure  sugar,  pure  flour,  and  other  pure  staple 
articles  of  food  may  be  likewise  brought  under 
similar  restrictions,  and  to  single  out  baking  pow- 
der in  this  manner  is  class  legislation  and  void. 
There  is  nothing  new  in  all  of  these  objections. 


707 

The  field  has  been  fully  covered  by  decisions  of 
this  court  wherein  the  general  principles  control- 
ling these  cases  have  been  established,  and  it  is 
only  necessity  to  refer  to  them. ' ' 
In  Stolz  v.  Thompson,  44  Minn.,  271,  the  statute  re- 
quiring baking  powders  containing  alum  to  be  marked 
so  as  to  show  that  fact  was  held  constitutional.    The 
court  said: 

' '  The  owner  is  not  deprived  of  his  property,  nor 
denied  the  equal  protection  of  the  laws,  by  being 
required  to  disclose  the  real  nature  or  ingredients 
of  the  commodity  which  he  exposes  for  sale.    No 
man  has  the  right,  protected  by  the  constitution 
from  legislative  interference,  to  keep  secret  the 
composition  of  such  goods  in  order  that  others 
may  be  induced  to  purchase  and  use  what  they 
would  consider  to  be  hurtful,  and  what  they  would 
not  knowingly  purchase  or  use.     The  owner  of 
such  property  may  be  legally  required,  as  a  mat- 
ter of  proper  police  regulation  for  the  benefit  of 
the  people  in  general,  to  sell  it  for  what  it  actually 
is,  and  upon  its  own  merits,  and  is  not  entitled,  as 
a  matter  of  constitutional  right,  to  the  benefit  of 
any  additional  market  value  which  he  may  secure 
by  concealing  its  true  character. ' ' 
Most  of  the  cases  above  quoted  are  cases  involving 
an  article  of  food.     The  principle  is  the  same  as  to 
any  commodity  of  common  use.     The  exercise  of  the 
police  power  is  aimed  to  prevent  fraud,  deception  and 
imposition  upon  the  general  public. 

The  question  as  to  the  constitutionality  of  the  "pure 
linseed  oil"  act  of  Minnesota  was  decided  in  the  case 
of  State  v.  Williams,  100  N.  W.,  641  (Minn.,  July  29, 
1904.)  It  there  appears  that  the  laws  of  1897  pro- 
vided that  no  person  or  corporation  should  manufac- 
ture or  sell  any  linseed  oil  unless  the  same  answered  to 
a  chemical  test  for  purity  recognized  in  the  United 
States  pharmacopeia;  and  it  was  also  provided  for 
stamping  the  packages  in  which  the  commodity  was 
sold,  and  that  it  should  be  sold  under  its  true  name, 
describing  it  as  pure  linseed  oil,  raw  or  pure  linseed 


708 

oil,  boiled.  This  statute  was  subsequently  amended 
by  laws  1901,  providing  that  no  person  or  corporation 
should  manufacture  or  sell  any  linseed  oil  unless  the 
same  answered  to  a  certain  described  test.  These  laws 
prohibiting  the  sale  of  linseed  oil  not  answering  to  a 
certain  chemical  test  were  held  constitutional  and  with- 
in the  police  power.  The  court  here  said: 

"We  may  readily  apply  our  common  knowledge 
of  the  fact  that  the  principal  purposes  of  the  stat- 
ute were  to  protect  the  public,  by  police  regulation, 
against  the  adulteration  of  the  commodity  by  in- 
trusion into  either  the  raw  or  boiled  material  of 
mineral  substances,  the  effect  of  which  in  its  use 
would  be  an  imposition  upon  the  consumers ;  and 
it  was  to  mitigate  and  protect  against  this  evil, 
which  was  within  legislative  information,  which 
was  the  purport  of  both  laws.  We  have,  no  doubt, 
either  than  the  general  practical  use  of  the  oil, 
either  raw  or  boiled,  is  in  painting,  and  that  boiled 
oil  is  used  quite  as  frequently,  and  as  much  the 
subject  of  adulteration,  and  is  as  decidedly  in- 
jurious to  the  consumer  as  the  raw  material,  and 
any  distinction  such  as  that  suggested  would  be 
unreasonable  and  of  no  practical  utility.  We  are 
of  the  view  that  the  law  applies  to  the  commodity 
which  was  exposed  for  sale  in  this  case.  While 
no  restriction  could  be  made  against  foreign  deal- 
ers in  the  sale  of  their  goods  brought  into  this 
state  as  articles  of  commerce.,  yet  the  penalty  pro- 
vided by  the  legislature  against  adulteration  and 
protection  to  consumers  by  penalties  against  fraud 
and  deceit,  and  the  requirement  of  proper  desig- 
nations required  in  these  statutes,  is  clearly  with- 
in the  police  power,  and  not  in  violation  of  the 
constitutional  sanction. ' ' 

The  above  case  is  closely  akin  to  that  under  discus- 
sion. It  was  a  police  regulation,  not  of  a  food  product, 
but  of  a  paint  commodity,  and  was  upheld  as  a  valid 
subject  of  regulation.  The  doctrine  of  the  Minnesota 
courts  on  the  subject  is  this :  The  use  of  compounds  is 
common;  that,  "being  a  compound,  the  people  should 


709 

know  the  contents,  that  they  may  judge  of  the  quality 
before  purchasing;  the  people  are  less  easily  imposed 
upon  when  the  contents  are  thus  made  known."  (80 
Minn.,  446.)  The  decisions  of  the  Minnesota  courts 
are  very  important  in  this  case.  The  pure  food  laws 
of  Minnesota  are  extensive  in  scope  and  have  given 
rise  to  considerable  litigation.  Furthermore,  the  de- 
cisions of  the  Minnesota  Supreme  Court  will  probably 
be  considered  as  precedents  that  would  be  invaluable, 
if  not  almost  conclusive  upon  the  courts  of  the  neigh- 
boring State  of  North  Dakota.  It  must  be  borne  in 
mind  that  the  law  does  not  fix  a  standard  for  pure 
paint.  In  the  first  place,  it  provides  that  all  paints,' 
white  lead  or  compounds  shall  be  labeled  and  shall 
show  the  proper  per  cent  of  their  mineral  ingredients, 
and  where  other  than  linseed  oil  is  used  in  its  prepara- 
tion the  names  and  percentage  of  the  oils  or  substi- 
tutes must  be  shown.  These  provisions  apply  to  all 
paints,  etc.  It  is  then  provided,  in  addition,  that  where 
mixed  paints  or  compounds  contain  any  ingredients 
other  than  pure  linseed  oil,  pure  carbonate  of  lead, 
oxide  of  zinc,  turpentine,  Japan  dryer  and  pure  colors, 
the  same  shall  be  properly  labeled,  showing  the  quan- 
tity or  amount  of  each  and  every  ingredient  used 
therein  and  the  name  and  residence  of  the  manufac- 
turer or  person  for  whom  it  is  manufactured.  The 
above  ingredients  are  not  fixed  as  the  standard  of  pur- 
ity, and  even  paint  containing  such  ingredients  must  be 
properly  labeled  and  its  mineral  ingredients  shown. 
The  law  merely  creates  a  presumption  of  purity  in 
favor  of  particular  ingredients,  and  requires  the  true 
ingredients  to  be  shown  where  they  are  substituted  for 
those  specified.  The  fact  that  the  substituted  in- 
gredients may  be  equally  pure  does  not  alter  the  rule, 
nor  is  the  law  subject  to  attack  merely  because  the  pub- 
lic may  not  be  enlightened  by  a  disclosure  of  the  true 
ingredients. 

The  trend  of  the  decisions  backed,  if  not  brought 
about  by  public  opinion,  is  very  decidedly  in  favor  of 
legislation  of  the  kind  under  consideration,  and  there 
are  some  rather  substantial  reasons  which,  in  the  ab- 


710 

sence  of  the  kind  pointed  out,  might  lend  support  to  a 
contrary  opinion.  I  recognize,  also,  the  force  of  the 
objections  contained  in  the  query  to  which  this  opinion 
is  a  reply. 

I  am  of  the  opinion  that  the  law  in  question  will  be 
upheld  by  the  courts. 

NOTE: — The  Heath  &  Milligan  Co.,  however,  made  an  attack  upon 
the  North  Dakota  law  above  referred  to,  but  it  was  upheld  as  constitu- 
tional and  valid  by  the  United  States  Supreme  Court  on  the  grounds 
above  indicated  in  Heath  fy  Milligan  v.  Worst,  28  Sup.  Ct.,  114,  decided 
by  the  United  States  Supreme  Court  in  December,  1907. — Ed. 


THE  PROVISIONS  OF  THE  FOREIGN  CORPORATION  LAW  OF 
WISCONSIN,  IN  FORCE  OCTOBER  1,  1905,  AND  THE  VALIDITY 
THEREOF. 

(Kuh,  Nathan  &  Fischer  Company,  December  27, 1905.) 
"Will  you  kindly  advise  us  whether  the  general 
counsel  of  the  Association  has  passed  upon  the 
law  of  the  State  of  Wisconsin,  compelling  all  for- 
eign corporations  to  file  copies  of  their  articles  of 
incorporation,  etc.,  and  to  make  an  annual  report! 
This  law,  we  understand,  was  radically  amended 
during  the  session  of  the  last  legislature.     If  he 
has  gone  into  the  matter,  we  would  be  very  glad  to 
have  you  favor  us  with  a  copy  of  his  opinion. ' ' 
The  foreign  corporation  law  of  Wisconsin,  enacted 
June  20,  1905,  and  in  force  from  and  after  October  1, 
1905   (Laws  of  Wisconsin,  1905,  ch.  506),  materially 
amends  the  previous  acts,  and  the  law  now  provides  in 
substance  that 

(2)  No  foreign  corporation  except  railroad,  insurance 
and  charitable  corporations  shall  transact  business 
or  acquire,  hold  or  dispose  of  property  in  Wis- 
consin, without  filing  its  articles  of  incorporation 
with  the  Secretary  of  State. 

(3)  Such  corporation  shall  make  a  report  to  the  Sec- 
retary of  State,  stating  its  name,  location  of  office, 
etc.,  names  and  addresses  of  officers,  and  of  agents 
within  the  State ;  amount  of  capital  stock  paid  in 
money,  property  or  services;  nature  of  business; 


711 

proportion  of  capital  stock  represented  in  Wis- 
consin; shall  constitute  Secretary  of  State  its  at- 
torney for  services  of  process,  summons,  etc. ;  date 
of  incorporation ;  and  agreement  to  abide  by  laws 
as  to  foreign  corporations. 

(4)  Provides  for  license  fees  upon  filing  of  articles 
of  incorporation  of  $25  and  $1  for  every  one  thou- 
sand dollars   of  capital   stock  exceeding  $25,000 
employed,  or  to  be  employed,  in  Wisconsin. 

(5)  Provides  for  filing  amendments  to  charter. 

(6)  All  changes  in  officers  shall  be  filed  with  Secre- 
tary of  State.     If  such  corporation  removes  any 
case  against  it  by  a  citizen  of  Wisconsin  on  a 
cause  of  action  arising  in  Wisconsin,  its  license 
shall  be  revoked. 

(7)  All  foreign  corporations  shall  annually  file  with 
the  Secretary  of  State  during  January,  a  sworn 
report  as  of  January  1,  stating : 

(a)  Name,  address,  principal  office. 

(b)  Names  and  addresses  of  officers. 

(c)  Nature  of  business  during  preceding  year. 

(d)  Amount  of  capital  stock  paid  in  money,  prop- 
erty or  services. 

(e)  Total  amount  of  business  transacted  during 
previous  year  and  true  value  of  all  property 
of  corporation. 

(f)  Total  amount  of  business  transacted  during 
preceding  year  in  Wisconsin. 

(g)  Proportion   of   capital   stock   represented   in 
Wisconsin  by  its  property  located  and  busi- 
ness transacted  therein  during  the  preceding 
year. 

(h)  That  corporation  shall  comply  with  foreign 
corporation  laws.  In  case  said  corporation 
remove  or  attempts  to  remove  to  the  United 
States  Court  any  action  commenced  against 
it  by  any  citizen  of  Wisconsin  upon  cause  of 
action  arising  in  Wiscqnsin,  the  license  issued 
to  such  corporation  shall  be  void. 

(8)  Provides  for  bringing  actions  and  service  of  sum- 
mons. 


712 

(9)  Provides  for  statements  by  corporations  not  hav- 
ing articles  of  incorporation. 

(10)  Provides  that  foreign  corporations,  their  officers 
and  agents  shall  be  subject  to  same  liabilities  and 
restrictions  as  domestic  corporations.   Every  con- 
tract by  foreign  corporations  affecting  its  personal 
liability  or  relating  to  property  within  State,  made 
before  complying  with  these  laws  shall  be  void  on 
its  behalf,  but  enforceable  against  it. 

(11)  Provides  penalties  for  non-compliance  with  act 
of  $500. 

(12)  Provides  that  foreign  corporations  now  licensed 
shall  not  be  required  to  pay  fees  for  new  license. 

Four  new  sections  are  added  to  the  foreign  corpora- 
tion law  and  known  as  1770f,  1770h,  ,1770i,  and  con- 
taining anti-trust  and  monopoly  provisions,  and  pro- 
viding for  revocation  of  license — and  for  filing  of  anti- 
trust affidavits.  The  act  also  provides  for  forfeiture 
of  license  for  removing  an  action  to  the  United  States 
courts  (1770f). 

As  stated  in  my  former  opinions,  it  is  well  settled 
in  law  that  a  corporation  created  by  one  State  can 
transact  business  in  another  State  only  with  the  con- 
sent, expressed  or  implied,  of  the  latter  State,  and 
such  consent  may  be  accompanied  by  such  conditions 
as  the  latter  State  may  think  fit  to  impose,  provided 
they  are  not  repugnant  to  the  constitution  or  laws  of 
the  United  States. 

Cable  v.  U.  S.  Life  Ins.  Co.,  191  U.  S.,  288, 
307. 

And  "conditions  imposed"  (as  authority  to  do  busi- 
ness in  the  state)  "may  be  reasonable  or  unreasonable; 
they  are  absolutely  in  the  discretion  of  the  legislature. 
*  *  *  Corporations  of  one  state  have  no  right  to 
exercise  their  franchises  in  another  state  except  upon 
the  assent  of  such  other  state,  and  upon  such  terms 
as  may  be  imposed  by  the  state  when  their  business  is 
done." 

Insurance  Co.  v.  Raymond,  70  Mich.,  485,  501. 

I  am  of  the  opinion  that  the  laws,  radical  though  they 
are,  are  valid  and  must  be  complied  with  by  foreign 


713 

corporations  "doing  business"  (within  the  meaning 
of  that  term)  in  Wisconsin.  What  constitutes  "doing 
business"  has  been  covered  by  numerous  opinions  here- 
tofore rendered. 


THE  RESPONSIBILITY  OF  EXPRESS  COMPANIES  ON  SHIPMENT 
OF  SEALED  PACKAGES  UPON  WHICH  NO  VALUE  HAS  BEEN 
PLACED,  UNDER  THE  LAW  OF  ILLINOIS. 

(Bockford  Watch  Co.,  Ltd.,  December  27,  1905.) 

"Will  you  kindly  inform  us  whether  Mr.  Levy 
Mayer  has  ever  passed  an  opinion  upon  the  re- 
sponsibility of  express  companies  on  shipments 
of  sealed  packages  through  them  on  which  no 
value  is  mentioned. 

Local  agents  represent  that  according  to  the 
terms  on  their  receipt  books,  they  are  only  liable 
for  $50.00  in  case  of  loss,  irrespective  of  value  of 
the  contents  of  the  package.  In  many  cases  we 
send  out  a  package  containing  $1,000  worth  of 
goods,  on  which  we  do  not  specify  value.  We 
have  been  under  the  impression  that  the  express 
companies  were  liable  for  the  value  of  its  con- 
tents. Are  we  right  or  not?" 

In  Oppenheimer  v.  U.  S.  Express  Co.,  69  111.,  62,  it 
was  held  that  an  express  company  has  the  right  to 
demand  from  a  consignor  such  information  as  will 
enable  it  to  decide  on  the  proper  compensation  to 
charge  for  the  risk,  and  the  degree  of  care  to  bestow 
in  discharging  its  trust;  and  a  limitation  of  its  lia- 
bility not  to  exceed  $50  unless  the  value  of  the  goods 
forwarded  is  truly  stated,  if  brought  to  the  knowledge 
of  the  consignor,  is  reasonable  and  consistent  with 
public  policy.  In  this  case  a  party  forwarded  jewelry 
worth  $3,800  in  a  box,  by  express,  taking  a  receipt 
which  said  that  the  company  would  not  be  held  liable 
for  any  loss  over  $50  unless  the  true  value  be  stated, 
and  it  was  held  that  the  court  would  be  inclined  to  ex- 
empt the  company  from  liability  on  the  ground  of  good 


714 

faith  in  not  disclosing  the  value  of  the  goods.     The 
court  said: 

"A  distinction  exists  between  the  effect  of  those 
notices  by  a  carrier  which  seek  to  discharge  him 
i  from  duties  which  the  law  has  annexed  to  his  em- 
i  ployment,  and  those,  like  the  one  in  question,  de- 
signed simply  to  insure  good  faith  and  fair  deal- 
ing on  the  part  of  his  employer — in  the  former 
case,  notice  alone  not  being  effectual,  without  an 
assent  to  the  attempted  restriction;  while  in  the 
latter  case,  notice  alone,  if  brought  home  to  the 
knowledge  of  the  owner  of  the  property,  delivered 
for  carriage,  will  be  sufficient." 

And  to  similar  effect  is  the  subsequent  case  of  Bos- 
cowitz  v.  Adams  Express  Co.,  93  111.,  523. 

It  is  also  the  general  rule  elsewhere  that  an  express 
company  may  stipulate  in  its  contract  of  carriage  that 
liability  in  case  of  loss  or  damage  may  be  limited  to 
a  certain  amount,  unless  the  true  value  of  the  goods  is 
disclosed. 

12  Am.  Eng.  Ency.  (second  ed.),  565,  citing 

cases. 

Whether  such  a  limitation,  however,  can  be  given 
effect  where  the  loss  was  occasioned  by  the  carrier's 
negligence,  is  a  question  upon  which  the  courts  are  not 
in  harmony. 

Hutchinson  on  Carriers  (second  ed.),  sec.  250. 
In  Illinois  the  express  company  will  still  be  liable 
for  the  full  value  if  the  loss  is  occasioned  by  the  actual 
negligence  of  the  express  company. 

Oppenheimer  v.  U.  S.  Express  Co.,  69  111.,  62. 
C.  &  N.  W.  Ry.  Co.  v.  Chapman,  133  111.,  96, 

106. 

Adams  Express  Co.  v.  Stettaners,  61  111.,  184. 
Boscowitz  v.  Adams  Express  Co.,  93  111.,  523. 
And  in  the  majority  of  states  the  express  company 
would  still  be  liable  for  gross  negligence  or  fraud.  But 
in  New  York  liability  for  negligence  may  be  limited. 
In  Bernstein  v.  Weir,  40  Misc.,  635,  83  N.  Y.  S.,  48, 
a  receipt  issued  by  the  Adams  Express  Company  stipu- 
lated that  it  should  not  be  liable  for  damages  from 


715 

certain  causes,  unless  the  result  of  gross  negligence 
or  fraud,  and  that  the  shipper  should  not  demand  more 
than  $50  unless  otherwise  expressed  in  the  receipt.  A 
shipper  made  no  statement  of  value  and  the  employe 
of  the  express  company  stamped  the  package,  "Value 
asked  and  not  given."  It  was  held  that  the  shipper 
could  recover  no  more  than  $50,  where  the  loss  resulted 
from  ordinary  negligence. 

In  Rowan  v.  Wells,  Fargo  &  Co.,  80  App.  Div.,  31, 
80  N.  Y.  S.,  226,  it  was  held  that  when  the  receipt  is- 
sued by  an  express  company  provides  that  it  shall  not 
be  liable  "for  an  amount  exceeding  $50  on  any  ship- 
ment unless  its  true  value  is  herein  stated,"  and  the 
value  of  the  package  was  not  given  by  the  shipper, 
and  if  it  had  been,  an  additional  charge  would  have 
been  made,  the  express  company  was  not  liable  in 
excess  of  $50,  unless  some  act  of  wrong  doing  on  its 
part  was  proved  and  that  proof  of  mere  ordinary 
neglect  was  insufficient. 

To  the  same  effect  is  Royal  Costume  Co.  v.  Weir,  95 
N.  Y.  S.,  575  (Nov.  3,  1905). 

In  Hayes  v.  Adams  Express  Co.,  62  Atl.,  284  (N.  J., 
Nov.,  1905),  where  on  delivering  to  a  carrier  a  drop 
curtain,  the  shipper  received  an  instrument  stating 
that,  where  the  snipper  omits  to  declare  the  value  of 
the  goods,  he  agrees  that  it  does  not  exceed  $§0,  it  was 
held  that  the  responsibility  of  the  carrier  for  the  real 
value  in  case  of  loss  was  not  thereby  restricted,  even 
though  the  shipper  had  knowledge  of  the  condition. 
The  shipper  must  expressly  assent  to  the  condition. 

I  am  of  the  opinion  that  in  Illinois  the  failure  to  dis- 
close value  when  asked  releases  the  express  company 
from  its  common  law  liability  as  insurer  in  excess  of 
$50,  but  that  the  express  company  is  still  liable  for  the 
full  value  of  the  shipment  when  loss  or  injury  is  caused 
by  the  actual  negligence  of  itself  or  of  the  railroad 
company,  which  in  law  is  the  agent  of  the  express 
company.  (Boscountz  v.  Adams  Express  Co.,  supra.} 
And  this  is  the  rule  in  the  majority  of  states.  And 
in  such  case  the  burden  of  proving  that  the  express 
company  has  used  reasonable  care  is,  in  Illinois,  upon 


716 

the  carrier.  (Adams  Express  Co.  v.  Stettaners,  61 
111.,  184;  C.  &  0.  R.  R.  Co.  v.  Radbourne,  52  111.  App., 
203.) 


THE  LIABILITY  OF  A  FIRM  FOE  INJURIES  SUSTAINED  BY  A 
POLICE  OFFICER  DURING  A  STRIKE  WHILE  ON  A  WAGON 
BELONGING  TO  THE  COMPANY. 

(Chicago  Flour  Company,  December  28,  1905.) 

"There  has  been  a  matter  come  up  with  us  re- 
sulting from  the  late  Teamsters'  strike,  which  we 
think  will  be  of  common  interest  to  all  members 
of  the  Illinois  Manufacturers'  Association  who 
were  involved  in  that  struggle. 

The  case  in  question  is  where  a  police  officer  of 
the  city,  detailed  to  protect  one  of  our  teams,  was 
injured  while  riding  on  one  of  our  loads  by  the 
same  being  overturned  on  account  of  the  collapse 
of  a  wheel.     Without  going  into  technical  points 
bearing  on  the  accident,  please  advise  us  as  to  our 
responsibility  for  injuries  an  officer  might  sustain 
while  riding  on  one  of  our  wagons,  not  by  our 
orders  but  by  order  of  some  higher  city  official.'' 
Assuming  that  the  overturning  of  the  wagon  was 
due  to  the  negligence  of  the  Flour  Company,  the  lia- 
bility of  that  company  for  the  injury  resulting  there- 
from will  depend  upon  whether  it  owed  to  the  police- 
man any  duty  of  care.    The  answer  of  the  latter  ques- 
tion will  depend  in  turn  upon  whether  the  policeman 
is  to  be  regarded  as  an  invited  person  or  a  mere  li- 
censee.   The  law  is  well  settled  that  "a  person  assumes 
no  duty  to  one  who  is  on  his  premises  by  permission 
only,  and  as  a  mere  licensee,  except  that  he  will  re- 
frain from  wilful  or  affirmative  acts  which  are  in- 
jurious." 

In  Gibson  v.  Leonard,  143  111.,  182,  a  member  of  the 
fire  patrol  in  the  discharge  of  his  duty  as  a  fireman, 
went  upon  the  premises  of  the  defendant,  and  was 
injured  by  the  falling  of  an  elevator.  The  Supreme 


717 

Court,  in  holding  that  the  defendant  was  not  liable  for 

the  injury,  said : 

"Appellant,  when  he  entered  the  building,  was, 
by  the  rules  of  the  common  law,  a  mere  naked 
licensee,  under  a  license  given  by  the  law  itself,  in 
no  way  emanating  from  appellee,  and  by  virtue  of 
which  he  would  have  had  a  right  of  entry — even 
in  the  teeth  of  an  express  prohibition  on  the  part 
of  appellee.  It  is  the  well  settled  doctrine  that  a 
mere  naked  license  or  permission  to  enter  prem- 
ises does  not  impose  an  obligation  on  the  owner 
or  person  in  possession  to  provide  against  the 
dangers  of  accident,  and  it  surely  can  not  detract 
from  the  applicability  of  the  rule  that  the  license 
or  permission  has  its  origin  in  a  source  other  than 
such  owner  or  person  in  possession." 
And  in  I.  C.  R.  R.  Co.  v.  Hopkins,  100  111.  App.,  594, 

the  court  said: 

''Appellee  was  on  appellant's  platform  in  the 
prosecution  of  her  own  business,  which  was  to 
furnish  meals  to  the  railway  mail  clerks  carrieH 
on  appellant's  train.  She  had  done  this  for  eight 
years.  It  is  fair  to  presume  from  this  length  of 
time  that  it  was  done  with  appellant's  knowledge. 
To  a  mere  licensee,  on  a  platform,  without  busi- 
ness or  invitation,  a  railroad  company  owes  no 
duty.  To  one  who  is  there  by  invitation,  express 
or  implied,  or  who  has  business  with  the  company, 
it  owes  the  duty  of  keeping  its  platform  free  from 
dangerous  obstructions." 
The  court  then  reviews  the  authorities  at  length,  and 

quotes  from  Wooliwles  v.  R.  R.  Co.,  36  W.  Va.,  335,  as 

follows  (p.  597) : 

"Upon  careful  examination  of  the  above  and 
other  cases,  however,  it  will  be  found  that  the 
authorities  may  be  classed  under  three  heads, 
to-wit:  (1)  bare  licensees  or  volunteers;  (2)  those 
who  are  expressly  invited  or  induced  by  active 
conduct  of  the  owner  to  go  upon  his  premises; 
(3)  customers  and  others  who  go  there  on  busi- 
ness with  the  occupier.  The  general  rule  will  then 


718 

be  that  in  those  cases  that  fall  under  the  first  head 
the  party  injured  has  no  right  of  action  against 
the  occupant  of  the  premises ;  and  the  contrary  in 
cases  falling  under  the  second  and  third  heads." 

Reference  is  also  made  to  Tobin  v.  R.  R.  Co.,  59  Me., 
188,  where  the  court  said : 

"The  hackman,  conveying  passengers  to  a  rail- 
road depot  for  transportation,  and  aiding  them  to 
alight  upon  the  platform  of  the  corporation,  is  as 
rightfully  upon  the  same  as  the  passenger  alight- 
ing. It  would  be  absurd  to  protect  the  one  from 
the  consequences  of  corporate  negligence  and  not 
the  other.  The  hackman  is  there  in  the  course  of 
his  business ;  but  it  is  a  business  important  to  and 
for  the  convenience  and  profit  of  the  defendants. 
The  general  principle  is  well  settled,  that  a  per- 
son injured,  without  neglect  on  his  part,  by  a  de- 
fect or  obstruction  in  a  way  or  passage  over  which 
he  has  been  induced  to  pass,  for  a  lawful  purpose, 
by  an  invitation  express  or  implied,  can  recover 
damages  for  the  injuries  sustained  against  the  in- 
dividual so  inviting  and  being  in  fault  for  the  de- 
fect. Barret  v.  Black,  56  Maine ;  Carleton  v.  Fran- 
coma  Iron  &  Steel  Co.,  99  Mass.,  216." 

The  court  then  concludes : 

"Assuming  these  statements  of  the  law  to  be 
correct,  it  is  important  to  consider  the  relation  of 
appellee  to  appellant  in  what  she  was  doing  at 
the  time  of  her  injury.  If  for  eight  years  appellee 
had  furnished  meals  on  board  appellant's  train 
to  its  passengers,  thereby  adding  to  their  comfort 
and  in  this  way  making  appellant 's  road  more  ac- 
ceptable and  inviting  to  passengers,  what  she  had 
done  would  have  been  to  appellant's  interest  as 
well  as  to  her  own.  In  a  sense  it  would  have  been 
doing  business  in  connection  with  appellant's  busi- 
ness for  mutual  profit.  Railway  mail  clerks  are 
in  a  sense  passengers  on  appellant's  train.  The 
government  pays  for  carrying  the  mail  and  mail 
clerks.  The  facilities  and  accommodations  which 
railroads  furnish  for  these  purposes  are  factors  in 


719 

securing   contracts   with    the    government.      The 
services  which  appellee  did  for  the  mail  clerks  on 
appellant's  train  were  in  effect  rendered  to  appel- 
lant's passengers,  thereby  making  its  train  more 
convenient  and  acceptable  to  them.    A  jury  might 
probably  infer  from  a  continuance  of  such  services 
for  eight  years,  that  they  were  rendered  upon  an 
implied  invitation  at  least.     If  so  rendered,  ap- 
pellee was  more  than  a  mere  licensee,  and  appel- 
lant owed  her  the  duty  of  keeping  its  platform 
free  from  dangerous  obstructions,  and  reasonably 
safe  for  those  entitled  to  use  it." 
In  Parker  v.  Barnard,  135  Mass.,  116,  the  plaintiff, 
a  policeman,   while   inspecting   defendant's   building, 
found  open  in  the  night  time,  fell  down  an  elevator 
well  which  negligently  had  been  left  unguarded.    The 
court,  though  holding  that  the  defendant  was  liable 
under  a  certain  statute  requiring  elevator  wells  to  be 
guarded,  implied  that  the  plaintiff  was  a  bare  licensee 
and  could  not  have  prevailed  in  the  absence  of  the 
statute. 

But  in  the  later  case  of  Learoyd  v.  Godfrey,  138 
Mass.,  315,  it  was  held  that  the  owner  of  certain  prem- 
ises was  liable  for  an  injury  to  a  policeman  by  falling 
into  an  open  space  on  such  premises,  where  the  police- 
man was  invited  by  the  occupant  of  the  premises  to 
make  an  arrest,  and  from  the  appearance  of  the  prem- 
ises they  are  apparently  safe. 

In  Vol.  2,  Shearman  &  Eedfield  on  Negligence  (5th 
ed.),  Sec.  705,  it  is  said: 

'  *  An  officer  of  the  law  who  enters  upon  premises 
in  the  performance  of  his  duty,  is  not  a  mere 
licensee,  and  may  maintain  an  action  for  their  de- 
fective condition.    But  a  fireman,  not  being  such 
an  officer,  and  entering  not  as  of  right  or  by  invi- 
tation, is  a  licensee  only.    And  so  is  a  constable 
entering  to  serve  a  civil  writ." 
Citing  138  Mass.,  315,  supra. 
See,  also: 

Low  v.  Railway  Co.,  72  Me.,  313. 
Plummer  v.  Dill,  156  Mass.,  426. 


720 

Metcalfe  v.  S.  S.  Co.,  147  Mass.,  66. 

Gordon  v.  Cummings,  152  Mass.,  513. 

2  Shearman  &  Bedfield  on  Negligence,  Sees. 
704-705-706. 

Woodruff  &  Boiven,  136  Ind.,  431. 

Beehler  v.  Daniels,  18  R.  L,  563. 

New  Omaha  Co.  v.  Anderson,  102  N.  W.,  89 
(Neb.). 

•Kelly  v.  Henry  Muhs  Co.,  59  Atl.,  23  (N.  J.). 

Eckes  v.  Stether,  90  N.  Y.  Supp.,  473. 
On  the  other  hand,  in  Anderson  &  Nelson  Distilling 
Co.  v.  Hair,  44  S.  W.,  659  (Ky.),  it  was  held  that  a 
United  States  revenue  storekeeper  on  duty  at  a  pri- 
vate distillery,  and  required  daily  to  inspect  all  parts 
of  it,  is  present  at  the  implied  invitation  of  the  distiller, 
and  is  not  a  mere  trespasser.  And  therefore  the  owner 
of  the  distillery  was  held  liable  for  any  injury  to  such 
storekeeper. 

In  Moffatt  v.  Bateman,  L.  E.  3  C.  P.,  115,  it  was 
held  that  a  man  who  offers  a  seat  in  a  carriage  is  not 
answerable  for  an  accident  due  to  a  defect  in  the  car- 
riage of  which  he  was  not  aware. 
See  also  Pollock  on  Torts,  p.  427. 
The  question  resolves  itself  into  one  of  fact.  If  the 
policeman  was  a  mere  licensee  there  is  no  liability.  If 
he  was  on  the  wagon  at  the  express  or  implied  invita- 
tion of  the  owner  or  his  authorized  agents,  the  owner 
is  liable,  assuming  there  is  negligence.  Where  there 
is  evidence  tending  to  prove  that  the  policeman  was  on 
the  wagon  at  the  express  or  implied  invitation  of  the 
owner,  the  question  is  for  the  jury.  If,  for  instance, 
the  owner  asked  for  police  protection  in  the  moving 
of  his  wagons  and  this  particular  policeman  was  de- 
tailed to  escort  such  wagons,  and  in  furtherance  of  this 
duty  he  rode  upon  the  wagon  at  the  request  of  the 
owner  or  his  servants  (and  if  there  was  negligence  on 
the  part  of  the  owner  or  his  servants),  I  am  of  the 
opinion  that,  under  the  doctrine  of  Learoyd  v.  God- 
frey, 138  Mass.,  315,  supra,  the  company  would  be 
liable.  In  the  recent  strike  the  policemen  were  per- 
mitted to  ride  upon  the  wagons  by  their  superiors  at 


the  request  of  the  Employers'  Association,  represent- 
ing the  various  employers.  The  city  and  its  police 
department  could  probably  not  have  been  compelled 
by  any  known  legal  proceeding  to  put  policemen  on 
the  wagons. 

In  such  a  case  policemen  would  be  on  the  wagons 
upon  the  invitation  of  the  owner,  and  if  injury  re- 
sulted from  the  negligence  of  the  owner  he  would  be 
liable.  In  Gibson  v.  Leonard,  143  111.,  182,  the  court, 
at  page  191,  emphasizes  the  distinction  that  the  "ap- 
pellant (fireman)  was  not  invited  or  induced  by  ap- 
pellee to  go  into  the  building,"  etc.  As  I  have  stated, 
the  question  depends  upon  all  the  facts  and  circum- 
stances. 


WHETHER  THEEE  IS  REDRESS  WHERE  A  FOOD  COMMIS- 
SIONER, IN  GOOD  FAITH,  MAKES  AND  PUBLISHES  AN  IN- 
CORRECT ANALYSIS. 

(William  H.  Bunge  Co.,  December  28,  1905.) 

"Will  you  kindly  advise  us  if,  to  your  knowl- 
edge, any  of  the  manufacturers  of  our  association 
have  had  any  difficulty  with  the  food  commissioner 
of  the  State  of  Minnesota,  in  the  way  of  their 
goods  coming  up  to  the  proper  requirements  of 
the  law? 

We  shipped  a  carload  of  vinegar  to  a  Minnesota 
jobber,  who  forwarded  a  sample  to  the  food  com- 
missioner, and  he  pronounced  it  as  illegal,  not 
coming  up  to  the  requirements  in  the  way  of 
strength.  We  have  always  been  very  particular 
in  this  regard,  and  retain  a  sample  of  every  car 
we  ship.  This  sample  we  tested  upon  receipt  of 
their  communication,  and  found  that  it  is  stronger 
than  it  need  be,  and  thereon  requested  the  con- 
signee to  send  us  a  sample  taken  from  one  of  the 
barrels,  and  at  the  same  time  suggested  that  they 
send  another  sample  to  the  commissioner,  claim- 
ing that  an  error  must  be  made.  This  sample  also 


722 

tested  all  right  and  we  had  our  test  verified  by 
the  Columbus  Food  Laboratories  of  this  city, 
whose  tests  agreed  with  ours.  The  commissioner, 
however,  still  claims  it  to  be  a  trifle  short  of  re- 
quirements, though  he  has  informed  the  consignee 
that  they  would  pass  it.  Thinking  that,  possibly, 
similar  occasions  had  come  to  your  notice  through 
other  manufacturers,  if  such  is  the  case,  we  will 
ask  you  to  kindly  inform  us,  at  your  earliest  con- 
venience as  to  the  outcome  of  such  dispute. 

It  seems  to  us  that  there  certainly  should  be 
some  recourse  for  the  manufacturer  on  occasions 
of  this  kind,  where  it  is  proven  by  a  disinterested 
party  that  the  goods  so  meet  the  requirements. 

We  understand  that  the  commissioner  has  pub- 
lished the  result  of  the  first  analysis  in  his  monthly 
bulletin;  which  analysis,  according  to  this  report 
after  analyzing  it  a  second  sample,  is  incorrect, 
though  he  still  claims  that  it  does  not  quite  come 
up  to  requirements. 

Any  information  or  pointers  that  you  may  be 
able  to  give  us  will  be  greatly  appreciated." 
The  right  to  take  samples  without  the  consent  of 
the  owner  can  be  justified  only  by  an  act  of  the  legis- 
lature regulating  a  business  which  otherwise  might  be- 
come injurious  to  the  public  health. 

Commonwealth  v.  Smith,  141  Mass.,  135. 
Where  a  sample  of  vinegar  is  taken  from  a  dealer 
for  the  purpose  of  testing  it  to  see  if  it  conforms  to 
the  standard  required  by  law,  it  is  not  necessary  that 
a  sample  be  left  with  the  dealer. 

People  v.  Warden  Grocery  Co.,  118  Mich.,  604; 

77  N.  W.,  315. 

The  laws  of  Minnesota  prescribe  a  standard  for  pure 
vinegar;  and  provide  for  a  state  chemist  and  a  dairy 
commissioner.  It  is  made  the  duty  of  the  commis- 
sioner to  attend  to  the  enforcement  of  all  the  laws 
against  adulteration  or  impurities  in  food  products; 
and  to  employ  such  chemists,  inspectors,  etc.,  as  he 
might  deem  necessary  for  the  proper  enforcement  of 
the  laws;  and  it  is  also  made  his  duty  to  inspect  ar- 


723 

tides  of  food  for  sale  and  to  sample  and  test  same, 
and  to  prosecute  violations  of  the  law. 

1894  General  Statutes  of  Minnesota,  Vol.  2, 

Sees.  7015,  et  seq. 

A  public  officer  charged  by  law  with  discretionary 
duties  is  not  liable  for  an  erroneous  performance 
through  error  of  judgment  unless  guilty  of  wilful 
wrong,  malice  or  corruption. 

Schooler  v.  Arrington,  81  S.  W.,  468  (Mo.). 
Hardwick  v.  Franklin,  85  S.  W.,  709  (Ky.). 
State  v.  Hastings,  37  Neb.,  96;  55  N.  W.,  774. 
Wetmore  v.  Burns,  21  J.  L.,  48. 
Rochester  White  Lead  Co.  v.  Rochester,  3  N. 

Y.,  463. 

Donohue  v.  Richards,  38  Me.,  379. 
Jackson  v.  Waldon,  11  Johns,  114. 
McCormick  v.  Burt,  95  111.,  263,  266. 
People  v.  Bartels,  138  111.,  322. 
Churchill  v.  Tewkes,  13  111.  App.,  520. 
Summers  v.  People,  109  111.  App.,  430,  433. 
Nor  is  he  liable  where  the  duties  are  in  their  nature 
judicial.     Official  action  is  judicial  where  it  is  the  re- 
sult of  judgment  or  discretion.        • 

People  v.  Bartels,  138  111.,  322,  328. 
In  the  performance  of  the  duties  imposed  upon  him 
by  law  the  food  commissioner  of  Minnesota  in  testing 
vinegar  must  exercise  judgment  and  discretion.  If  he 
is  acting  in  good  faith  he  is  not  to  be  held  liable  for 
an  erroneous  judgment  in  the  matter  in  which  he  acts 
in  a  manner  judicially. 

In  Path  v.  Koeppel,  72  Wis.,  289  (1888),  it  was  held 
that  the  powers  and  duties  of  a  fish  inspector  to  in- 
spect fish  offered  for  sale  in  a  city  and  to  destroy  all 
such  as  are  unwholesome  and  unsuitable  to  be  eaten, 
are  judicial  in  their  nature ;  and  he  can  not  be  held 
liable  for  the  careless,  improper,  or  erroneous  per- 
formance of  such  duties. 

The  court  then  said  (p.  293) : 

' '  The  powers  conferred  on  the  defendant  by  law, 
according  to  the  complaint,  are  plainly  and  clearly 
judicial,  and  of  great  importance.  lie  is  vested 


724 

with  power  to  determine  the  quality  and  healthful- 
ness  of  fish  in  market,  and,  if  unwholesome  or 
unfit  to  be  eaten,  to  condemn  and  destroy  them. 
This  is  a  high  and  responsible  judicial  power,  as 
it  concerns  the  public  health,  and  as  it  may  affect 
the  rights  of  property;  and  the  officer  exercising 
such  a  power  is  within  the  protection  of  that  prin- 
ciple, that  a  judicial  officer  is  not  responsible  in 
an  action  for  damages  to  any  one  for  any  judg- 
ment he  may  render,  however  erroneously,  negli- 
gently, ignorantly,  corruptly,  or  maliciously  he 
may  act  in  rendering  it,  if  he  act  with  his  jurisdic- 
tion. This  principle  is  stated  and  given  force  in 
Steele  v.  Dunham,  26  Wis.,  393,  by  the  present 
chief  justice,  to  shield  from  liability  members  of 
an  equalizing  board  or  board  of  review  of  assess- 
ments, who  are  charged  with  liability  for  dam- 
ages to  the  plaintiff  for  corruptly  and  oppressively 
increasing  the  valuation  of  certain  rjroperty  with- 
out proof.  Much  more  should  this  principle  pro- 
tect from  actions  for  private  damages  an  inspec- 
tor of  fruits  and  meats  acting  in  the  interest  of 
the  public  health.  This  principle  protects  all  offi- 
cers exercising  judicial  powers,  whatever  they  may 
be  called.  It  is  'a  judicial  privilege,'  and  has  'a 
deep  root  in  the  common  law,'  and  is  found  'as- 
serted in  the  earliest  judicial  records,  and  it  has 
been  steadily  maintained  by  an  undisturbed  cur- 
rent of  decisions.'  Yates  v.  Lansing,  5  Johns., 
291.  It  is  a  discretionary  authority,  where  the 
determination  partakes  of  the  character  of  a  ju- 
dicial decision.  Druecker  v.  Salomon,  21  Wis., 
621;  Salem  v.  E.  R.  Co.,  96  Mass.,  431.  It  has 
application  to  a  board  of  health  (Raymond  v. 
Fish,  51  Conn.,  80) ;  and  to  an  inspector  of  pro- 
visions (Seaman  v.  Patten,  2  Caines,  312) ;  and 
to  a  board  of  pilot  commissioners  (Downer  v.  Lent, 
6  Cal.,  94)." 

In  Seaman  v.  Patten,  2  Caines  (N.  Y.),  311,  an  ac- 
tion was  brought  against  the  inspector  general  of  pro- 


725 

visions  to  recover  the  value  of  certain  beef  condemned 
by  him  as  unmarketable.    The  court  said : 

"When  persons  in  a  public  capacity  act  upon 
oath,  in  matters  too  which  require  skill  and  ex- 
perience, and  in  which  men  may  honestly  differ  in 
opinion,  it  seems  cruel  not  to  protect  them  when 
they  conduct  themselves  with  integrity,  and  with- 
out abusing  their  authority,  or  manifesting  any 
symptoms  of  malice. ' ' 

The  court  then  refers  to  the  English  case  of  Warne 
v.  Varley,  and  says  (p.  315) : 

' '  The  defendant  there  pleaded  that  he  had  seized 
the  leather  became,  'in  his  judgment,  the  same 
was  not  well  dried.'  But  the  act  of  parliament 
had  not  given  him  authority  to  seize,  what,  in  his 
judgment,  was  not  sufficiently  dried,  but  only  gen- 
erally to  seize  leather  of  that  description,  without 
referring  to  his  judgment  at  all.  If  it  had,  Lord 
Kenyon  would  not  have  held  him  liable.  'It  seems 
reasonable,'  says  he,  'that  if  these  searchers  exer- 
cise their  authority  bona  fide,  and  only  seize  such 
leather  as  in  their  judgment  ought  to  be  examined 
they  should  be  protected,  but  the  act  of  parliament 
affords  them  no  such  protection.'  From  this  mode 
of  expression,  as  well  as  from  the  reason  of  the 
thing,  it  is  clear,  that  were  the  judgment  or  opin- 
ion of  the  officer  expressly  referred  to  by  law,  as 
the  rule  of  his  conduct,  he  can  not  and  ought  not, 
to  be  answerable  for  an  upright  use  of  it,  but 
is  as  much  protected  by  a  clause  of  this  kind  as 
by  those  which  are  usually  introduced  for  this 
purpose." 
And  again: 

"The  fourth  section  authorizes  him  to  remove 
without  the  city  all  such  beef  and  pork  as  shall 
appear  to  him  to  be  in  danger  of  spoiling,  etc.  Will 
it  be  said  that  he  would  also  be  liable,  if  he  should 
bona  fide  order  any  of  these  articles  to  be  re- 
moved, if  it  turned  out  that  they  were  in  no  dan- 
ger of  spoiling?  Shall  it  be  his  duty  to  remove 


726 

these  articles ;  shall  he  swear  that  he  will  perform 
his  duty;  nay,  shall  he  be  liable  for  a  heavy  pen- 
alty for  neglect,  and  shall  his  own  opinion  be  made 
the  only  criterion  of  the  necessity  or  propriety, 
and  shall  he  not  dare  to  exercise  it?  So,  again,  in 
the  same  section,  he  is  to  order  beef  or  pork,  in 
a  putrid  state,  to  be  removed,  if  in  his  opinion 
the  removal  be  necessary.  Surely,  it  would  be  a 
satisfactory  defense  to  an  action,  on  this  part  of 
the  statute,  to  say  that  the  removal  in  his  opinion 
was  necessary.  Why  vest  such  power  in  him,  as 
a  security  for  the  health  of  the  city,  if  he  be  not 
to  use  it?  If  too  latitudinary,  the  legislature,  and 
not  he,  is  to  blame.  Again,  by  the  first  section  he 
may  remove  certain  provisions,  if  in  his  judgment 
it  be  proper.  The  eleventh  section,  in  like  manner 
(and  this  applies  more  immediately  to  the  pres- 
ent action),  declares  that  the  barrels,  in  which 
beef  shall  be  repacked,  (which  must,  of  course,  be 
judged  of  before  they  can  be  inspected),  shall,  in 
the  opinion  of  the  inspector  general,  be  every  way 
strong,  and  tight  enough  to  prevent  the  pickle 
from  leaking  out.  Now,  if  this  be  an  action 
for  not  inspecting  the  beef,  and  it  can  be  no  other, 
notwithstanding  the  inaccuracy  of  the  return,  call- 
ing it  an  action  for  condemning  the  property,  which 
the  inspector  could  not  do,  who  can  say  that  the 
plaintiff  was  of  the  opinion  that  the  barrel  was  as 
tight  and  strong  as  it  ought  to  be  ?  If  he  were  not, 
it  was  his  duty,  however,  incorrect  the  opinion  may 
have  been,  to  refuse  its  inspection;  for  it  must  be 
an  incontrovertible  position,  that  when  by  law  it 
is  made  the  duty  of  a  public  agent,  however  high 
or  low  his  station,  to  do  a  thing,  if  in  his  opinion 
certain  requisites  are  complied  with,  he  can  never 
be  liable  for  omitting  to  act  (which  it  is  attempted 
to  make  him  here),  without  proving  corruption, 
malice  or  some  misbehavior.  It  does  not  appear 
why  the  beef  was  refused.  It  may  have  been  for 
the  very  cause  just  mentioned,  which  would  be  Q, 
complete  defense." 


727 

And  the  court  concluded: 

' l  But  without  pursuing  this  inquiry,  our  opinion 
is,  that  an  officer,  acting  under  a  commission  from 
government,  who  is  enjoined  by  law  to  the  per- 
formance of  certain  things,  if  in  his  judgment  or 
opinion  the  requisites  therein  mentioned  have 
been  complied  with;  and  inhibited,  under  the  like 
exercise  of  his  own  discretion,  from  doing  other 
things;  who  is  sworn  to  discharge  these  duties  to 
the  best  of  his  ability,  and  exposed  also  to  pen- 
alties as  well  for  negligence  as  for  acting  where 
he  ought  not,  is  not  answerable  to  a  party,  who 
may  conceive  himself  aggrieved  for  an  omission 
arising  from  mistake  or  mere  want  of  skill,  if  there 
be  no  bad  faith,  corruption,  malice  or  some  misbe- 
havior, or  abuse  of  power." 

In  Raymond  v.  Fish,  51  Conn.,  80,  the  plaintiff  was 
the  owner  of  certain  oyster  beds.  The  beds  were  de- 
stroyed by  the  order  of  the  board  of  health  on  the 
ground  that  such  beds  were  believed  to  be  the  cause  of 
a  malignant  disease.  The  board  had  statutory  au- 
thority to  remove  that  which  in  their  judgment  en- 
dangered the  public  health.  The  members  of  the  board 
were  sued  for  damages.  It  was  proven  that  the  oyster 
beds  were  not  the  origin  or  producing  cause  of  the 
disease  in  question.  The  court  said : 

1 '  The  statute  does  not  mean  to  destroy  prop- 
erty which  is  not  in  fact  a  nuisance,  but  who  shall 
decide  whether  it  is  so?  All  legal  investigations 
require  time,  and  can  not  be  thought  of.  If  the 
board  of  health  are  to  decide  at  their  peril,  they 
will  not  decide  at  all.  They  have  no  greater  in- 
terest in  the  matter  than  others,  further  than  to 
do  their  duty;  but  duty,  hampered  by  a  liability 
for  damages  for  errors  committed  in  its  discharge, 
would  become  a  motive  of  very  little  power. 

It  would  seem  to  be  absolutely  necessary  to  con- 
fer upon  some  constituted  body  the  power  to 
decide  the  matter  conclusively,  and  to  do  it  sum- 
marily, in  order  to  accomplish  the  object  the  stat- 
ute has  in  view.  We  think  this  has  been  done.  We 


728 

think  the  board  of  health  of  the  town  of  Groton 
had  the  power  to  decide  conclusively,  in  the  ap- 
parent necessities  of  the  case,  that  the  brush  in 
Pequonock  river  was  a  nuisance,  endangering  the 
life  and  health  of  the  inhabitants  of  the  village." 
And  again : 

' l  The  powers  of  the  board  in  these  respects  can 
not  be  questioned,  for  they  are  expressly  con- 
ferred; and  if  they  are  exercised  in  good  faith, 
and  with  proper  care  and  prudence,  in  the  manner 
prescribed,  by  the  statute,  the  board  can  not  be 
made  responsible  for  mere  errors  of  judgment, 
whatever  may  be  the  consequence.  *  *  *  Here 
power  is  expressly  given  to  decide  what  consti- 
tutes filth,  and  if  they  merely  err  in  judgment  there 
can  be  no  redress." 

In  Arbuckle  v.  Blackburn,  113  Fed.,  616,  51  C.  C. 
A.,  122,  65  L.  E.  A.,  864  (appeal  dismissed  in  191  U. 
S.,  405),  it  appears  that  the  case  was  brought  by  Ar- 
buckle Brothers  to  restrain  Joseph  E.  Blackburn, 
dairy  and  food  commissioner  of  Ohio,  from  prosecut- 
ing the  vendors  of  Ariosa  coffee,  an  article  sold  by 
the  complainants  to  many  dealers  in  Ohio,  because  of 
alleged  violations  of  pure  food  laws  of  Ohio,  and  from 
publishing  that  Ariosa  coffee  was  within  the  prohi- 
bition of  the  pure  food  law.  It  was  there  claimed  that 
the  food  commissioner  was  acting  erroneously  in  de- 
ciding that  Ariosa  was  a  coated  compound  within  the 
prohibition  of  the  law. 

The  court  held  that  no  action  could  be  maintained 
to  restrain  judicial  officers  from  bringing  actions  where 
such  officers  were  proceeding  under  a  valid  state  stat- 
ute, and  that  such  a  suit  would  be  a  suit  against  the 
state.  The  court  there  said: 

'  *  Upon  the  authority  of  this  case  and  others  de- 
cided in  the  Supreme  Court  it  seems  clear  that 
this  action  can  not  be  maintained  consistently 
with  the  eleventh  amendment  to  the  Constitution, 
withholding  the  judicial  power  of  the  United 
States  from  suits  in  law  or  equity  commenced  or 
prosecuted  against  one  of  the  United  States  by 


729 

citizens  of  another  State,  or  citizens  or  subjects 
of  any  foreign  State.  In  Poindexter  v.  Greenhow, 
114  U.  S.,  270-287,  29  L.  ed.,  185-191,  5  Sup.  Ct. 
Rep.,  903,  962,  quoted  with  approval  in  re  Ayers, 
123  U.  S.,  443,  497,  31  L.  ed.,  216,  226,  8  Sup.  Ct. 
Rep.,  179,  it  was  said,  'that  the  question  whether 
a  suit  is  within  the  prohibition  of  the  eleventh 
amendment  is  not  always  determined  by  reference 
to  the  nominal  parties  to  the  record. '  In  the  Ayers 
case  the  suit  for  injunction  which  the  court  held 
could  not  be  entertained,  was  brought  against  the 
attorney  general  and  treasurers  of  counties,  cities 
and  towns  in  Virginia,  just  as  the  present  case  is 
brought  against  Joseph  E.  Blackburn,  dairy  and 
food  commissioner  of  Ohio.  The  injunction  sought 
is  against  the  prosecution  of  suits  in  the  Ohio 
courts  which  are  about  to  be  instituted  by  Black- 
burn, not  in  his  individual  capacity,  but  as  an 
officer  of  the  State." 

In  reference  to  the  publication  that  the  product  of 
the  complainants  violated  the  law,  the  court  said : 

"Nor  do  we  think  that  there  is  ground  for  in- 
junction in  the  allegations  of  the  bill  that  the  food 
commissioner  is  publishing  the  fact  that  the  prod- 
uct of  the  complainant  is  within  the  prohibition  of 
the  law.  If  this  publication  is  made  to  those  deal- 
ing in  the  article,  it  would  be  within  the  duty  of 
the   commissioner,   in   advising   of   contemplated 
prosecutions.     If  such  publications  are  libelous, 
the  law  affords  other  means  of.  redress." 
I  am  of  the  opinion  that  the  commissioner  is  not 
liable  for  mere  errors  of  judgment,  and  that,  subject 
to  the  limitations  referred  to  in  the  cases  above  cited, 
there  is  no  redress  where  the  food  commissioner  in 
good  faith  makes  an  incorrect  analysis.    If  the  com- 
missioner acts  maliciously  or  is  guilty  of  gross  negli- 
gence, which  amounts  to  bad  faith,  an  entirely  differ- 
ent question  would  arise,  and  in  such  case  it  is  my 
opinion  that  he  would  be  liable  in  an  appropriate  pro- 
ceeding. 


730 


THE    VALIDITY    OF    THE    ACTION    OF    CARRIERS    IN    CHARGING 
FOR  WEIGHING  CARS. 

(Hartman,  Hay  &  Eeis,  December  28,  1905.) 

"  Enclosed  we  hand  you  letter  from  the  L.  & 
N.  E.  E.  relative  to  a  charge  of  $1.00  per  car  for 
weighing  cars.  Will  you  kindly  get  the  opinion 
of  Mr.  Mayer,  as  to  whether  the  railroad  can  im- 
pose such  a  charge? 

We  take  the  stand  that  a  railroad  company  re- 
ceiving freight  from  a  connecting  line  can  not  ab- 
solutely say  that  the  weight  as  determined  by  that 
line  is  correct,  and  that  before  they  can  assess 
the  correct  amount  of  freight  to  be  charged  they 
must  first  determine  by  their  own  scales  the  weight 
of  the  contents  of  the  car.  There  are  several  rea- 
sons why  this  should  be  done.  It  is  possible  that 
some  of  the  material  might  have  been  abstracted 
from  the  car  en  route.  There  is  very  apt  to  be  a 
difference  between  the  marked  tare  of  the  car  and 
the  actual  weight  of  the  car.  We  have  known  the 
weight  of  the  marked  tare  to  vary  as  much  as 
3,000  pounds  from  the  actual  tare.  Again  the  rail- 
road receiving  the  freight  at  destination  has  no 
assurance  that  the  road  receiving  the  freight  at 
point  of  shipment  has  not  made  a  mistake  in 
weighing  the  car. 

Kindly  let  us  have  the  opinion  of  Mr.  Mayer  as 
soon  as  possible  and  oblige." 

The  Eailroad  and  Warehouse  Act  of  Illinois,  Sec. 
138,  provides  as  to  shipments  of  grain  that  the  car- 
rier receiving  grain  for  shipment  shall  correctly  weigh 
the  same,  and  shall  also  weigh  out  and  deliver  to  the 
consignee  the  full  amount  of  such  grain.  It  is  also 
provided  (Sec.  139)  that  such  railroad  companies  shall 
maintain  track  scales  for  weighing  grain  at  all  sta- 
tions where  more  than  50,000  bushels  of  grains-were 
shipped  the  previous  year.  Under  these  sections  I 
am  of  the  opinion  that  the  railroad  company  can  make 
no  charge  for  weighing  cars  of  grain. 


731 

But,  as  to  weights  ascertained  by  the  delivering  car- 
rier at  the  request  of  the  consignee,  such  service  is 
properly  an  "accessorial"  service,  and  I  am  of  the 
opinion  that  a  reasonable  charge  may  be  made  there- 
for. 

In  Norfolk  &  P.  Belt  Line  R.  Co.  v.  Commonwealth, 
49  S.  E.,  39  (Va.,  Dec.  1,  1904),  it  appears  that  the 
State  Corporation  Commission  of  Virginia  fixed  the 
charges  for  placing  cars  in  position  to  be  weighed  on 
consignee's  or  shipper's  individual  track  scales,  lo- 
cated on  sidings  leading  to  industries  along  the  line  of 
the  N.  &  P.  B.  L.  R.  E.  Co.  at  25  cents  per  car  each 
car,  loaded  or  empty,  so  placed  in  position  and 
weighed.  It  was  urged  by  the  railroad  company  that 
placing  cars  on  private  track  scales  in  position  to  be 
weighed  was  a  matter  of  private  contract,  involving  a 
non-public  service,  for  which  the  State  Corporation 
Commissioner  could  not  fix  the  charges.  The  court 
said: 

1 '  The  service  here  is  not  an  independent  service, 
but  is  merely  ancillary  to  the  public  duty  of  de- 
livering freight  to  consignees  with  whom  the  rail- 
road company  has  established  switching  connec- 
tions— an  incident  to  the  public  service,  not  sev- 
erable,  and  essential  to  the  due  performance  of 
that  service.  The  establishment  and  operation  of 
track  scales  such  as  are  used  by  the  guano  com- 
pany in  this  case,  are  a  necessity  of  modern 
commerce  of  which  the  service  of  the  railroad 
company  in  that  connection  is  an  indispensable 
feature.  The  case  is  analogous  to  that  of  a  com- 
mon carrier  of  live  stock,  whose  business  of  trans- 
porting the  stock  involves  the  incidental  duty  of 
furnishing  suitable  and  safe  facilities  for  loading 
and  unloading  the  animals  and  for  feeding  and 
watering  them  while  in  transit." 
The  court  was  of  opinion  that  the  service  in  ques- 
tion was  cognate  to  and  so  intimately  connected  with 
the  carriage  and  delivery  of  freight,  as  to  constitute 
part  of  such  service  and  consequently  subject  to  gov- 


732 

ernmental  control.    And  it  was  held  that  the  charge  of 
25  cents  per  car  was  reasonable  and  just. 

In  London  &  Northwestern  Ry.  Co.  v.  Price,  11  Q. 
B.  D.,  485  (1883),  it  was  held  that  weighing  coal  car- 
ried on  a  railway  at  a  railway  station  for  the  con- 
venience of  the  consignee  in  selling  the  same,  is  inci- 
dental to  the  statutory  powers  of  the  railroad  company, 
not  ultra  vires,  and  that  an  action  could  be  maintained 
by  the  company  to  recover  a  reasonable  charge  for  the 
weighing. 

It  has  been  held  that  a  carrier  may  divide  its  charges 
and  impose  a  terminal  charge,  as  for  example  the 
terminal  charge  of  $2  per  car  made  by  carriers  for  de- 
livery in  the  Union  Stock  Yards  at  Chicago.  But  such 
charge  must  be  reasonable. 

Inter.  Com.  Commas 'n  v.  C.  B.  &  Q.  R.  Co.,  186 
U.  S.,  320  (1902). 

The  weighing  charges  are  also  subject  to  the  rule  in 
reference  to  unreasonableness  and  unlawful  discrimi- 
nation. 

Detroit  &  H.  &  M.  Ry.  Co.  v.  Inter.  Com. 
Com'n,  74  Fed.,  803,  812,  aff'd  167  U.  S., 
633. 

I  am  inclined  to  the  opinion  that  prima  facie  a 
charge  of  $1  per  car  for  weighing  is  unreasonable. 
The  charge  is  the  same  as  that  made  for  demurrage, 
$1  per  day  after  48  hours.  The  service  of  weighing 
cars  does  not  seem  of  a  value  equivalent  to  a  demur- 
rage or  storage  charge  for  one  day's  use  of  the  car. 
In  the  Virginia  case,  heretofore  quoted,  a  charge  of 
25  cents  per  car  for  placing  the  cars  upon  scales  to  be 
weighed  was  deemed  reasonable,  and  the  service  here 
rendered  is  of  little  more  value. 

Again,  the  charge  can  not  be  said  to  beMliscrimina- 
tion  unless  the  service  is  performed  for  some  shippers 
without  charge.  The  service  must  be  performed  for 
another  at  the  same  charge. 

Cowan  v.  Bond,  39  Fed.,  54. 

With  respect  to  the  clause  of  the  bill  of  lading  which 
specifies  the  quantity  of  goods  shipped  the  usual  bill  of 
lading  is  but  a  receipt,  and  as  between  the  parties  is 


733 

merely  prima  facie  evidence  of  the  quantity  or  weight 
shipped;  and  either  the  carrier,  shipper  or  consignee 
may  show  by  parol  evidence  that  either  a  less  or  larger 
quantity  was  delivered  by  the  carrier. 

4  Am.  Eng.  Ency.  (second  ed.),  527,  528. 
Bissel  v.  Price,  16  111.,  408. 
I.  C.  R.  R.  Co.  v.  Cobb,  72  111.,  148. 
Wallace  &  Kingman  v.  Long,  8  111.  App.,  504. 
Tibbits  v.  R.  I.  &  P.  Ry.  Co.,  49  111.  App.,  567. 
It  is  to  be  noted  that  the  Uniform  Bill  of  Lading  and 
many  bills  of  lading  in  use  contain  the  following  condi- 
tion: 

"Owner  or  consignee  shall  pay  freight  at  the 
rate  here  stated,  and  all  other  charges  accruing 
on  said  property,  before  delivery,  and  according 
to  weights  as  ascertained  by  any  carrier  here- 
under;  and  if  upon  inspection  it  is  ascertained 
that 'the  articles  shipped  are  not  those  described 
in  this  bill  of  lading,  the  freight  charges  must  be 
paid  upon  the  articles  actually  shipped,  and  at  the 
rates  and  under  the  rules  provided  for  by  pub- 
lished classifications. ' ' 

The  delivery  carrier  in  the  case  presented  can  unde- 
niably charge  freight  on  the  weight  specified  in  the 
bill  of  lading  issued  by  the  connecting  line.  If  such 
specified  weight  varies  from  the  actual  weight,  the  con- 
signee may  show  this  by  evidence,  and  pay  freight  on 
the  actual  weight.  The  consignee  may  be  under  diffi- 
culties to  prove  the  actual  weight,  but  the  fact  that  a 
charge  is  made  by  the  railroad  company  for  weighing 
and  thus  determining  the  actual  weight,  is  of  no  im- 
portance in  determining  the  actual  weight.  Prima 
facie  the  weight  stated  in  the  bill  of  lading  is  correct, 
and  the  burden  is  on  the  consignee  to  show  its  falsity. 
The  charge  for  weighing  is  a  separate  one,  and  is  valid, 
so  long  as  it  is  reasonable  under  the  circumstances. 


734 


DISCRIMINATION  IN  THE  MATTER  OF  FORWARDING  CARS  IN 
RELIEVING  A  CONGESTION  AT  A  JUNCTION  POINT  AS  A 
RESULT  OF  AN  EMBARGO,  AND  THE  RIGHT  TO  RELIEF 
THEREFOR. 

(O'Gara  Coal  Co.,  December  28,  1905.) 
"We  have  noted  Mr.  Levy  Mayer's  opinion 
under  date  of  September  29th,  same  bearing  on 
liability  of  carrier  for  delay  in  shipment,  and 
same  is  of  great  interest  to  us  inasmuch  as  we  have 
several  unsettled  claims  of  a  very  similar  nature 
to  the  one  mentioned;  and  we  would  therefore 
greatly  appreciate  a  supplementary  opinion,  same 
relating  to  the  liability  of  a  railroad  in  an  instance 
where  a  large  number  of  carload  shipments  might 
be  tied  up  at  a  junction  point  on  account  of  the 
inability  of  the  connecting  line  to  accept,  the  de- 
livering line — when  embargo  might  be  raised- 
rushing  into  connecting  line  recently  arrived  cars 
on  account  of  their  being  still  under  steam,  in 
preference  to  delivering  cars  which  had  been  pre- 
viously received  and  side  tracked  at  the  junction 
point. 

We  understand  this  action  has  been  taken  in 
many  instances  in  order  to  more  promptly  relieve 
the  railroad  companies  themselves,  and  in  this 
manner,  of  course,  some  shipments  are  discrimi- 
nated against  in  favor  of  others,  the  railroad  com- 
pany maintaining  they  had  taken  action  to  give 
benefit  to  the  greatest  number  concerned,  to  the 
detriment  of  the  few." 

In  my  opinion  of  May  19,  1904,  for  the  Mathis  Bros. 
Company  and  of  March  17,  1905,  for  the  Manierre-Yoe 
Syrup  Company,  I  discussed  the  nature  and  effect  of 
an  embargo  with  reference  to  a  claim  for  damages 
against  the  carrier.  To  these  opinions  I  refer. 

A  common  carrier  is  not  in  the  absence  of  a  special 
contract  bound  to  carry  within  any  given  period  of 
time,  but  only  within  a  time  which  is  reasonable  re- 
garding all  the  circumstances  of  the  case,  and  he  is 


735 

not  responsible  for  the  consequences  of  delay  arising 
from  causes  beyond  his  control. 

Taylor  v.  G.  N.  Ey.,  L.  E.,  1  C.  P.,  385. 
Where  an  embargo  is  laid  by  a  connecting  carrier 
as  in  this  instance,  a  reasonable  preference  in  for- 
warding may  be  given  certain  goods  over  other  goods. 
Thus  a  preference  may  be  given  to  perishable  freight. 
Mushall  v.  N.  Y.  Cent.  R.  Co.,  45  Barb.,  502 

(N.Y.). 

Peet  v.  C.  &  N.  W.  R.  R.,  20  Wis.,  624. 
In  Daish  v.  R.  R.  Co., -9  Inter.  Com.  Epts.,  520  (in- 
volving an  embargo  laid  by  the  Baltimore  &  Ohio  E. 
E.  Co.  in  1902),  the  Interstate  Commerce  Commission 
said: 

"It  was  also  proper  that  embargo  notices  should 
be  given  such  connecting  lines  so  as  to  avoid  the 
further  congestion  of  freight  in  junction  freight 
yards;  and  in  the  forwarding  of  freight  received 
from  connecting  lines  it  was  proper  that  cars 
should  be  forwarded  as  far  as  practicable  in  the 
order  of  their  receipt,  so  that  there  should  be  no 
unreasonable  discrimination  or  preference  which 
might  be  avoided." 

When  an  embargo  is  lifted  by  the  connecting  carrier 
it  is  the  duty  of  the  other  carrier  to  relieve  the  conges- 
tion of  traffic  at  the  junction  point.  It  is  the  duty  of 
the  carrier  to  take  every  means  to  relieve  the  impedi- 
ment as  soon  as  possible.  While  cars  should,  as  far 
as  possible,  be  forwarded  in  the  order  of  receipt,  yet 
forwarding  of  trains  still  under  steam  will  relieve  the 
congestion  of  cars  so  much  more  quickly  than  if  these 
trains  were  sidetracked  so  as  to  still  further  tie  up 
traffic,  that  I  am  of  the  opinion  that  such  action  can 
not  be  said  to  constitute  unjust  discrimination  or  an 
undue  preference.  Of  course,  circumstances  might 
exist  to  show  a  wilful  discrimination,  but  the  mere 
fact  of  giving  preference  to  trains  still  under  steam  to 
facilitate  traffic,  and  to  relieve  the  congestion,  is  not  an 
unjust  discrimination.  I  am  of  the  opinion  that  the 
carrier  is  not  liable  for  such  delay. 

As  to  the  liability  of  a  carrier,  knowing  of  an  em- 


736 

bargo  on  connecting  lines,  accepting  goods  without  no- 
tifying the  consignor,  I  refer  to  my  opinion  of  May  19, 
1904,  for  the  Mathis  Bros.  Company. 

In  this  connection  it  should  be  noted  that  it  has  been 
held  in  respect  to  the  clause  usually  in  bills  of  lading 
and  especially  in  the  uniform  bill  of  lading  that  "no 
carrier  or  party  in  possession  of  all  or  any  of  the 
property  herein  described  shall  be  liable  for  any  loss 
thereof  or  damage  thereto,  by  causes  beyond  its  con- 
trol," that  this  clause  does  not  include  loss  due  to 
delay  in  carrying  the  goods. 

Johnson  v.  M.  K.  &  R.  Ry.,  95  N.  Y.  S.,  182, 
186  (Aug.  31,  1905). 


WHETHER  AN  ILLINOIS  CORPORATION  CAN  PREVENT  A  FOR- 
EIGN CORPORATION  FROM  USING  A  NAME  SIMILAR  TO  THAT 
OF  THE  ILLINOIS  CORPORATION. 

(Climax  Manufacturing  Co.,  December  29,  1905.) 

"We  would  like  an  opinion  from  your  attorney, 
Mr.  Levy  Mayer,  as  to  whether  or  not  we  would 
be  able  to  prohibit  another  concern  from  using 
our  name  in  Illinois.  The  facts  are  as  follows: 
We  are  incorporated  under  the  laws  of  the  State 
of  Illinois  and  it  was  recently  brought  to  our 
notice  that  there  was  another  concern  in  Chicago 
that  had  assumed  the  same  name  and  was  receiv- 
ing our  mail  and  opening  it.  We  find  that  they 
have  a  charter  issued  at  Washington,  D.  C.,  and 
claim  that  they  do  not  have  to  change  their  name 
and  that  they  will  not  do  so." 

In  Neiv-by  v.  Oregon  Central  Ry.,  Deady  609,  s.  c. 
Fed.  Cas.  No.  10,144,  the  court  (Deady,  J.)  in  its  opin- 
ion, said: 

"The  corporate  name  of  a  corporation  is  a 
trade  mark  from  the  necessity  of  the  thing,  and 
upon  every  consideration,  of  private  justice  and 
public  policy  deserves  the  same  consideration  and 
protection  from  a  court  of  equity." 
In  that  case  the  suit  was  brought  to  prevent  the  cor- 


737 

porate  name  of  a  corporation  from  being  infringed  by 
the  defendant  which  knowingly  took  the  same  name. 
The  language  above  quoted  was  entirely  obiter,  as  the 
bill  was  dismissed  on  demurrer  for  want  of  proper 
parties.  Thereafter  the  bill  was  amended  and  a  plea 
interposed  that  the  plaintiff  (a  mere  bondholder)  could 
not  maintain  the  suit,  which  was  sustained  and  the  bill 
dismissed. 

Yet  this  dictum  of  Judge  Deady  has  been  approv- 
ingly quoted  in  a  number  of  later  cases.     See 
Pub.  Co.  v.  DoUnson,  72  Fed.,  603. 
Hopkins   on  Trade-marks    (second  ed.),  pp. 

150,  151. 

In  Hopkins  on  Trade-marks  (2d  ed.),  p.  151,  the 
author  says : 

"The  courts  are  confused  in  their  phraseology 
with  reference  to  the  character  of  corporate 
names.  There  can  be  no  trade-mark  right  in  a 
corporate  name,  for  the  conclusive  reason  that  it 
is  not,  as  such,  applied  to  the  subject  matter  of 
commerce.  In  an  early  case  Judge  Deady,  of  Ore- 
gon, said :  '  The  corporate  name  of  a  corporation 
is  a  trade-mark  from  the  necessity  of  the  thing,' 
and  this  very  phrase,  with  other  dicta,  has  been 
quoted  with  approval  in  a  more  recent  case.  The 
author  has  in  a  former  section  collected  the  judi- 
cial definitions  of  a  trade-mark,  and  it  is  a  scien- 
tific impossibility  to  bring  Judge  Deady 's  dictum 
within  the  scope  of  either  of  those  definitions,  or 
to-  extend  the  definitions  to  include  that  dictum. 
Mr.  Justice  Clifford's  definition  may  be  referred 
to  as  making  the  author's  position  clearer.  It  is 
entirely  erroneous  to  treat  a  corporate  name  as 
being  a  trade-mark." 

And  reference  to  the  numerous  decisions  upon  the 
subject  demonstrates  that  there  is  an  endless  confusion 
upon  this  particular  question. 

In  general  courts  of  equity  interfere  to  restrain  in- 
fringement of  names  or  trade-marks  in  two  classes  of 
cases:  (1)  to  protect  a  technical  trade-mark  or  trade 
name,  and  (2)  to  restrain  unfair  competition,  as  where 


738 

one  party  simulates  the  marks,  signs  or  labels  of  an- 
other. 

If,  therefore,  a  corporate  name  constitutes  a  tech- 
nical trade-mark  the  court  will  award  it  protection, 
irrespective  of  whether  the  action  of  the  infringer 
is  fraudulent  and  intentional  or  otherwise.  "While 
fraud  is  presumed  from  the  fraudulent  use  of  a  trade- 
mark, it  must  be  proven,  directly  or  by  inference,  in 
all  cases  of  unfair  competition  which  do  not  involve  a 
technical  trade-mark. ' ' 

Hopkins  on  Trade-marks  (second  ed.),  p.  44. 
In  Vitascope  Co.  v.  U.  S.  Phonograph  Co.,  83  Fed., 
30,  32,  the  court  lays  down  the  rule  as  to  when  courts 
will  interfere  in  cases  of  unfair  competition,  thus: 

"The  court  is  always  willing  to  restrain  unfair 
competition  in  trade,  but  the  ground  upon  which 
such  relief  is  granted  rests  upon  principle — either 
that  the  means  used  are  dishonest,  or  that  by  imi- 
tation of  name  or  device,  there  is  a  tendency  to 
create  confusion  in  the  trade,  and  enable  the  seller 
to  pass  off  upon  the  unwary  his  goods  as  those  of 
another,  and  thereby  deceive  the  purchaser;  or 
that,  by  false  representation,  it  is  intended  to  mis- 
lead the  public,  and  induce  them  to  accept  a  spu- 
rious article  in  the  place  of  one  they  have  been 
accustomed  to  use." 

It  is  apparent,  therefore,  that  relief  can  only  be  had 
by  reference  to  the  principles  of  unfair  competition 
in  trade. 

If,  however,  a  corporate  name  is  applied  or  used  to 
designate  particular  goods,  or  is  used  in  connection 
with  the  manufacture  or  sale  of  any  such  goods,  such 
name  may  be  protected  upon  the  principles  applicable 
to  technical  trade-marks,  as  in  the  case  of  Celluloid 
Mfg.  Co.  v.  Cellonite  Mfg.  Co.,  32  Fed.,  94.  In  the 
latter  case  the  court  said: 

"First.  As  to  the  imitation  of  the  complain- 
ant's name.  The  fact  that  both  are  corporate 
names  is  of  no  consequence  in  this  connection. 
They  are  the  business  names  by  which  the  parties 
are  known,  and  are  to  be  dealt  with  precisely  as  if 


739 

they  were  the  names  of  private  firms  or  partner- 
ships. The  defendant's  name  was  of  its  own 
choosing,  and,  if  an  unlawful  imitation  of  the  com- 
plainant's,  is  subject  to  the  same  rules  of  law  as 
if  it  were  the  name  of  an  unincorporated  firm  or 
company.  It  is  not  identical  with  the  complain- 
ant's name.  That  would  be  too  gross  an  invasion 
of  the  complainant's  right.  Similarity,  not  iden- 
tity, is  the  usual  recourse  when  one  party  seeks 
to  benefit  himself  by  the  good  name  of  another. 
What  similarity  is  sufficient  to  effect  the  object 
has  to  be  determined  in  each  case  by  its  own  cir- 
cumstances. We  may  say,  generally,  that  a  sim- 
ilarity which  would  be  likely  to  deceive  or  mislead 
an  ordinary  unsuspecting  customer  is  obnoxious 
to  the  law.  Judged  by  this  standard,  it  seems  to 
me  that  considering  the  nature  and  circumstances 
of  this  case,  the  name  'Cellonite  Manufacturing 
Company'  is  sufficiently  similar  to  that  of  the  'Cel- 
luloid Manufacturing  Company'  to  amount  to  an 
infringement  of  the  complainant's  trade  name. 
The  distinguishing  words  in  both  names  are  rather 
unusual  ones,  but  supposed  to  have  the  same 
sense.  Their  general  similarity,  added  to  the 
identity  of  the  other  parts  of  the  names,  makes 
a  whole  which  is  calculated  to  mislead." 
It  must  be  noticed,  however,  that  in  the  case  cited 
there  was  evidence  tending  to  show  that  the  defend- 
ant's name  was  adopted  on  account  of  its  similarity 
to  the  complainant's  name. 

And  in  Higgins  Co.  v.  Higgins  Soap  Co.,  144  N.  Y., 
462,  the  same  doctrine  is  announced.  The  complain- 
ant's name  had  been  used  to  designate  the  article  it 
manuf ectured.  The  court  there  said : 

"In  respect  to  corporate  names  the  same  rule 
applies  as  to  the  names  of  firms  or  individuals, 
and  an  injunction  lies  to  restrain  the  simulation 
and  use  by  one  corporation  of  the  name  of  a  prior 
corporation  which  tends  to  create  confusion  and 
to  enable  the  later  corporation  to  obtain,  by  rea- 
son of  the  similarity  of  names,  the  business  of  the 


740 

prior  one.  The  courts  interfere  in  these  cases,  not 
on  the  ground  that  the'  State  may  not  affix  such, 
corporate  names  as  it  may  elect  to  the  entities  it 
creates,  but  to  prevent  fraud,  actual  or  construc- 
tive." 
And  the  court  concludes: 

"The  cases  are  not  infrequent  in  which  the  use 
of  corporate  names  has  been  restrained  on  the 
principle  of  the  trade-mark  cases." 
The  court  then  says: 

"Whether  the  court  will  interfere  in  a  particu- 
lar case  must  depend  upon  circumstances;  the 
identity  or  similarity  of  the  names ;  the  identity 
of  the  business  of  the  respective  corporations; 
how  far  the  name  is  a  true  description  of  the  kind 
and  quality  of  the  articles  manufactured  or  the 
business  carried  on;  the  extent  of  the  confusion 
which  may  be  created  or  apprehended,  and  other 
circumstances  which  might  justly  influence  the 
judgment  of  the  judge  in  granting  or  withholding 
the  remedy.  Whether  upon  the  equitable  prin- 
ciples the  remedy  should  have  been  awarded  in 
this  case  upon  the  facts  proved  and  found  in  the 
question  in  this  case.  If  the  right  of  the  plain- 
tiff to  relief  depended  exclusively  upon  the  com- 
parison of  the  corporate  names  of  the  partie*,  and 
the  inferences  to  be  drawn  from  such  comparison 
alone  .and  without  reference  to  any  extrinsic  facts, 
it  might  well  be  doubted  whether  the  names  are 
so  similar  that  the  court  could  find  that  confusion 
and  injury  would  be  likely  to  arise.  But  the  case 
does  not  rest  alone  upon  the  inferences  from  such 
comparison. ' ' 

The  court  then  points  out  that  the  name  of  the  com- 
plainant had  been  used  in  connection  with  its  product 
and  says: 

"The  inference  seems  irresistible  that  the  de- 
fendant assumed  its  corporate  name  so  that  it 
should  carry  the  impression  that  it  was  the  manu- 
facturer of  'Higgins'  Soap,'  so  well  known  to  the 
public.  But  if  the  name  was  assumed  in  good  faith 


741 

and  without  design  to  mislead  the  public  and  ac- 
quire the  plaintiff's  trade,  the  defendant,  knowing 
the  facts,  must  be  held  to  the  same  responsibility 
as  if  it  acted  under  the  honest  impression  that  no 
right  of  the  plaintiff  was  invaded. ' ' 
Whether  or  not  one  corporation  may  restrain  an- 
other corporation,  having  the  same  or  a  similar  name 
as  the  first  corporation,  from  using  its  name,  where 
the  name  in  question  is  not  used  in  connection  with 
the  sale  or  manufacture  of  goods,  presents  a  more 
difficult  question.     On  the  one  hand  it  has  been  held 
that  the  use  of  a  corporate  name  similar  to  that  used 
by  another  corporation,  cannot  be  enjoined  if  its  adop- 
tion and  use  are  in  good  faith  and  without  fraudulent 
intent.     See 

Saunders  v.  Sun  Life  Ass'n  Co.,  1  L.  R.,  Ch. 

Div.  (1894),  537. 
Farmers'  L.  &  T.  Co.  v.  Farmers'  L.  &  T.  Co., 

1  N.  Y.  S.,  44. 

Investor  Pub.  Co.  v.  Dobinson,  82  Fed.,  56. 
Hygeia  Water  Ice  Co.  v.  N.  Y.  Hygeia  Ice  Co., 

140  N.  Y.,  96. 

R.  &  B.  Co.  v.  R.  &  M.  Co.,  8  N.  Y.  S.,  52. 
The   Merchants'   Banking   Co.   v.    The   Mer- 
chants' Joint  Stock  Bank,  9  L.  R.,  Ch.  Div., 
560. 
Commercial  Advertiser  v.  Haynes,  49  N.  Y. 

S.,  938. 
Borthwick  v.  Evening  Post,  L.  R.,  37  Ch.  Div., 

449. 
Nebraska  Loan  &  Trust  Co.  v.  Nine,  43  N.  W., 

348;  27  Neb.,  507. 

Employers'  Co.  v.  Ins.  Co.,  10  N.  Y.  S.,  845. 
Hygeia  Water  Co.  v.  Ice  Co.,  45  Atl.,  957 

(Conn.). 
Continental  Ins.  Co.  v.  Fire  Assn.,  101  Fed., 

256. 
L.  &  P.  L.  A.  Society  v.  Assurance  Co.,  17  L. 

J.  Ch.,  37. 

London  Assurance  v.  L.  &  W.,  a  Corp.,  Lim., 
32  L.  J.  Ch.,  664. 


742 

Colonial  Co.  v.  Home  Assn.  Co.,  33  Beav.,  548. 

Plant  Seed  Co.  v.  Michel  Plant  Seed  Co.,  37 
Mo.  App.,  313. 

Vol.  7  Thompson  on  Corporations,  p.  6946. 
In  Farmers'  Loan  &  Trust  Co.  v.  Same,  1  N.  Y.  S., 
44,  the  court  said : 

''The  remaining  question  as  to  whether  or  not 
a  corporation  of  this  State,  by  being  the  first  to 
adopt  a  name  of  this  character  can  preclude  cor- 
porations in  this  or  any  other  city  of  the  United 
States  from  adopting  the  same  or  a  similar  name, 
in  cases  where  both  corporations  are  engaged  in 
business  in  different  States,  is  a  much  more  diffi- 
cult question.  This  difficulty  is  increased  by  the 
apparent  conflict  in  the  decisions  as  to  how  far 
and  in  what  instances  the  use  of  corporate  names 
may  be  enjoined.  Although  not  technically  a  trade- 
mark, the  authorities  are  in  favor  of  holding  that 
a  corporate  name  deserves  the  same  considera- 
tion as  a  trade-mark;  some  even  g9ing  so  far  as 
to  hold  that  it  is  a  trade-mark,  anbl  will  be  pro- 
tected as  such.  In  most  of  these  cases,  however, 
it  will  be  found  that  the  use  of  the  name  was  con- 
nected with  some  article  of  merchandise,  and  was 
adopted  and  used  by  a  manufacturer,  merchant, 
or  corporation  in  order  to  designate  the  goqds 
that  they  manufactured  or  sold,  and  to  distin- 
guish them  from  those  manufactured  or  sold  by 
others,  to  the  end  that  they  might  be  known  in 
the  market  as  his.  Where  a  person,  firm  or  cor- 
poration, therefore,  in  the  same  or  a  similar  busi- 
ness, endeavors  to  appropriate  the  name,  or  the 
good-will  connected  therewith,  which  has  been  ren- 
dered valuable,  the  courts  have  enjoined  such  use. 
But  it  will  be  noticed  that  the  principle  underly- 
ing these  decisions  is  based  upon  two  elements: 
First,  the  injury  to  the  public,  by  leading  them  to 
suppose  that  the  goods  of  one  are  the  goods  of 
the  other;  and,  second,  the  injury  to  the  owner 
of  the  trade-mark  or  name  by  the  diversion  of  his 


743 

trade  into  other  channels,  by  the  belief  of  the  pub- 
lic that  they  are  obtaining  his  goods." 
On  the  other  hand  it  has  been  held  that  a  court  of 
equity  will  protect  a  corporation  in  the  use  of  its  name 
upon  the  principles  applicable  to  trade-marks. 

See  American  Clay  Mfg.  Co.  v.  Same,  198  Pa., 

189. 
North  Cheshire,  etc.,  Bry.  Co.  v.  Manchester 

Bry  Co.,  L.  E.  App.,  Cas.  (1899),  83. 
Holmes  et  al.  v.  Holmes  et  al.  Mfg.  Co.,  37 

Conn.,  278. 
Celluloid  Mfg.  Co.  v.  Cellonite  Mfg.  Co.,  32 

Fed.,  94. 

State  v.  McGrath,  92  Mo.,  357. 
Newby  v.  Railroad  Co.,  Fed.  Cas.,  No.  10,  144. 
Rogers  v.  Rogers,  11  Fed.,  495. 
Investor  Pub.  Co.  v.  Dobinson,  72  Fed.,  603. 
Ex  parte  Walker,  1  Tenn.,  Ch.,  97. 
American  Grocer  v.  Grocer,  25  Hun.,  398. 
1  Thompson  on  Corporations,  Sees.  296-9. 
7  Thompson  on  Corporations,  Sec.  8192. 
Higgins  v.  Higgins,  144  N.  Y.,  462. 
Brewery  Co.  v.  Same,  L.  R.  App.  Cas.  (1899), 

83. 

Roy  v.  Roy,  58  N.  Y.  S.,  979. 
Brooklyn  &  White  Lead  Co.  v.  Masury  Co., 

Cox  Trade-mark  Cases,  210. 

And  see  full  list  of  cases  cited  in  brief  of  counsel  in 
International  Trust  Co.  v.  International  Loan  &  Trust 
Co.,  10  L.  E.  A.,  759. 

In  the  American  Clay  case,  supra,  the  court  said : 

"The  first  question  for  consideration  therefore 
is  whether  a  fraudulent  intent  is  the  essential 
basis  of  relief.  In  ordinary  cases  of  trade-mark 
and  in  cases  involving  an  individual's  use  of  his 
own  name,  it  is  no  doubt  the  controlling  factor, 
but  it  is  not  always  essential.  There  are  two 
classes  of  cases  involving  judicial  interference 
with  the  use  of  names,  first,  where  the  intent  is 
to  get  an  unfair  and  fraudulent  share  of  another's 


744 

business,  and,  second,  where  the  effect  of  defend- 
ant's action,  irrespective  of  his  intent,  is  to  pro- 
duce confusion  in  the  public  mind  and  consequent 
loss  to  the  complainant.  In  both  cases  the  courts 
of  equity  administer  relief  without  regard  to  the 
existence  of  a  technical  trade-mark," 
citing  cases. 

In  Philadelphia  Trust  Co.  v.  Same,  123  Fed.,  534, 
the  authorities  are  reviewed  and  the  court  held  that 
the  adoption  by  a  Delaware  corporation  of  the  name 
''Philadelphia  Trust  Co.,"  was  a  violation  of  the  rights 
of  a  Pennsylvania  company  organized  under  the  name 
of  "Philadelphia  Trust  Safe  Deposit  &  Insurance 
Co.,"  and  which  was  commonly  known  as  the  "Phila- 
delphia Trust  Co."  The  court  bases  its  ruling  upon 
the  fact  that  the  use  of  the  name  "Philadelphia  Trust 
Co. ' '  by  the  Delaware  corporation  would  produce  con- 
fusion and  mislead  the  public.  The  defendant  in  its 
answering  affidavits  denied  that  the  adoption  of  the 
name  of  the  defendant  was  for  the  purpose  or  with 
the  intent  of  copying  the  name  for  the  complainant.- 
The  court  said,  however,  that  the  name  of  the  com- 
plainant "was  presumably  known  to  the  incorpora- 
tors"  of  the  defendant. 

The  courts  of  Illinois  have  passed  upon  the  ques- 
tions under  discussion. 

In  Elgin  Butter  Company  v.  Elgin  Creamery  (Com- 
pany, 155  111.,  127,  the  Elgin  Butter  Company,  a  cor- 
poration, filed  a  bill  to  restrain  the  Elgin  Creamery 
Co.  from  using  its  name.  Both  concerns  were  engaged 
in  the  same  business.  The  court  said: 

"  It  is  not  charged  or  claimed  in  the  bill  that  the 
promoters  of  or  the  owners  of  the  stock  in  the 
Elgin  Creamery  Company  adopted  the  corporate 
name  by  which  it  was  incorporated,  for  the  pur- 
pose of  misleading  or  deceiving  or  otherwise 
wronging  or  injuring  either  its  own  customers,  or 
the  public,  or  the  Elgin  Butter  Company,  com- 
plainant herein.  No  fraud  and  no  wrongful  in- 
tention are  alleged  in  the  bill,  and  no  facts  are 
stated  from  which  any  inference  of  fraud  natur- 


745 

ally  and  necessarily  arises.  Fraud  must  always 
be  alleged  and  proven.  It  is  never  presumed.  Fair 
and  healthy  competition  in  business  is  beneficial 
to  the  public,  and  redounds  to  the  welfare  of  the 
State.  It  is  not  justly  to  be  regarded  as  an  index 
of  fraud.  The  case  at  bar,  then,  is  to  be  consid- 
ered as  free  from  any  question  of  fraud. 

The  gist  of  the  complaint  seems  to  be,  that  the 
use  by  the  Elgin  Creamery  Company  of  its  cor- 
porate name  in  its  business  of  manufacturing, 
dealing  in  and  selling  butter  has  a  tendency  to, 
and  does,  confuse  and  mislead  dealers  in  the  mar- 
ket and  the  public  at  large,  and  lead  them  into 
the  false  belief  that  the  corporation  incorporated 
as  ' Elgin  Creamery  Company'  is  one  and  the 
same  with  the  corporation  incorporated  as  'The 
Elgin  Butter  Company.'  " 

The  court  then  points  out  that  there  is  not  suffi- 
cient similarity  between  the  two  names  to  deceive  pur- 
chasters,  and  concludes: 

"Even  if  the  corporate  names  of  the  two  cor- 
porations are  somewhat  similar,  yet,  in  the  ab- 
sence of  any  intent,  act  or  artifice  to  mislead  deal- 
ers in  the  market  or  the  public  at  large  as  to  the 
identity  of  the  corporations,  the  Elgin  Creamery 
Company  has  the  same  right  to  use  its  corporate 
name  in  the  transaction  of  its  business  that  the 
Elgin  Butter  Company  has  to  use  its  corporate 
name.  It  would  seem  that  the  same  rule  should 
apply  to  corporations,  in  this  regard,  that  ob- 
tains in  respect  to  natural  persons,  and  in  the  ab- 
sence of  any  fraudulent  or  wrongful  intention  or 
act,  or  any  contract  to  prohibit  it,  every  natural 
person  has  the  absolute  right  to  use  his  own  name 
in  his  own  business.  Meneely  v.  Meneely,  62  N. 
Y.,  427." 

In  Chicago  Landlords  Protective  Bureau  v.  Koebel, 
112  111.  App.,  21,  the  plaintiff  corporation  sued  to  re- 
strain the  defendant  from  using  a  name  similar 
to  the  plaintiff's  corporate  name.  The  court  held  that 
the  imitation  of  a  corporate  name  by  others  in  a  like 


746 

business,  in  a  manner  calculated  to  deceive  the  public, 
will  be  restrained  by  injunction.  It  was  also  held  that 
it  was  not  necessary  that  the  intention  of  the  defend- 
ant in  adopting  the  imitation  name  was  fraudulent 
or  wrongful,  and  that  it  was  no  defense  that  at  the 
time  of  the  adoption  of  such  name  the  defendant  was 
ignorant  of  the  plaintiff's  existence.  The  court  cited 
Newby  v.  R.  R.  Co.,  Deady  609.  The  case  is  decided 
upon  the  principles  of  the  trade-mark  case  and  irre- 
spective of  the  principles  of  unfair  trade.  The  case 
was  affirmed  in  210  111.,  176,  the  court  relying  on  New- 
by v.  R.  R.  Co.,  supra.  It  appeared  that  in  one  in- 
stance the  defendant  had  represented  that  his  concern 
was  a  branch  of  the  business  conducted  by  the  com- 
plainant, although  the  defendant  denied  any  knowl- 
edge of  the  existence  of  the  complainant  and  denied 
that  the  use  of  the  complainant's  name  was  with  a 
fraudulent  intent.  The  Supreme  Court  said: 

"The  law  undoubtedly  is  that  the  complainant 
the  Chicago  Landlords '  Protective  Bureau,  had  no 
right  to  appropriate  to  itself  the  exclusive  use  of 
that  name  to  the  exclusion  of  the  right  of  the  de- 
fendants to  use  the  descriptive  words  'Landlords' 
Protective  Department, '  so  long  as  the  use  of  those 
words  was  with  a  legitimate  and  honest  purpose, 
but  whenever  defendants,  intentionally  or  other- 
wise, took  advantage  of  the  similarity  of  the  name 
adopted  by  them  to  the  one  under  which  the  com- 
plainant was  incorporated  and  had  been  carrying 
on  its  business,  to  mislead  the  public,  or,  without 
explanation,  allowed  their  clients  to  be  misled  into 
the  belief  that  the  two  business  associations  were 
one  and  the  same,  it  violated  the  lawful  rights  of 
the  complainant  and  the  plainest  principles  of 
equity.  Fraud  is  the  gist  of  actions  of  this  kind. 
Courts  of  equity  'will  never  enjoin  the  use  of 
generic  or  descriptive  words  in  a  trade-mark  or 
business  name  except  upon  an  allegation  and  proof 
of  actual  fraud  or  fraud  resulting  from  the  sim- 
ilarity of  the  names,  tending  to  lead  those  dealing 
with  the  parties  to  believe  that  they  are  one  and 


747 

the  same,  even  though  they  use  ordinary  care  to 
discriminate  between  them. ' ' 
citing  cases. 

The  court  then  says: 

' '  We  think  the  true  ground  upon  which  the  juris- 
diction of  a  court  of  equity  to  restrain  the  de- 
fendant, as  prayed  in  this  bill,  rests,  is  that  the 
name  assumed  by  the  defendants  is  so  similar  to 
that  of  the  complainant  as  to  mislead  and  con- 
fuse the  public  mind  in  the  city  of  Chicago  as  to 
the  identity  of  the  business  in  which  the  two  par- 
ties were  engaged." 
citing  cases. 

The  court  then  says : 

"While  it  is  true  that  the  defendant  Campe, 
who  seems  to  have  been  the  active  member  of  the 
defendant  firm  in  the  Landlord's  Protective  De- 
partment, testified  that  he  had  no  knowledge  of 
the  existence  of  the  complainant  corporation  at 
the  time  of  the  organization  of  their  department, 
he  admits  that  he  had  knowledge  of  the  fact  that 
the  similarity  of  the  names  was  calculated  to  mis- 
lead the  public  to  the  injury  of  the  complainant." 

And  again: 

"We  have  already  seen  that  such  confusion  did 
result,  as  is  abundantly  shown  by  the  evidence. 
'Landlords'  Protective  Bureau'  and  'Landlords' 
Protective  Department'  are  manifestly  so  similar 
as  to  almost  necessarily  lead  to  complication  and 
confusion  in  the  business  of  the  two  parties,  and 
it  is  of  no  importance,  in  this  view  of  the  case, 
that  the  defendants  had  no  knowledge  of  the  ex- 
istence of  the  complainant  until  after  they  had 
organized  their  rival  business,  or  had  no  intention 
of  injuring  complainant." 

The  court  concludes : 

"It  may  be  conceded  that  the  evidence  in  this 
record  as  to  the  actual  and  intentional  fraud  is 
conflicting,  and  if  the  determination  of  the  case  de- 
pended upon  that  alone  there  would  be  force  in 
the  argument  that  the  finding  of  the  chancellor, 


748 

who  saw  the  witnesses  and  heard  them  testify, 
should  not  be  disturbed,  but  we  think  the  undis- 
puted facts  that  the  similarity  of  names  resulted  in 
embarrassment  and  injury  to  the  complainant  jus- 
tified the  conclusion  of  the  Appellate  Court,  and 
its  judgment  will  accordingly  be  affirmed." 
See  also 

Allegretti  v.  Chocolate  Cream  Co.,  177  111., 

129. 

Hazleton  Co.  v.  Tripod  Co.,  142  111..  494. 
Int.  Comm.  v.  Y.  W.  C.  A.,  194  111.,  194. 
In  this  connection  it  may  be  noted  that  the  act  of 
May  16,  1905  (Sess.  L.  of   Illinois,  1905,    p.  130),  in 
reference  to  the  organization  of  corporations,  provides 
that  "no  license  shall  be  issued  to  two  companies  hav- 
ing the  same  or  a  similar  name,  nor  shall  any  foreign 
corporation  having  the  same  or  a  similar  name  as  any 
domestic  corporation  be  admitted  to  this  State  under 
any  foreign  corporation  law." 

The  law  is  well  summed  up  in  a  recent  work  (Hop- 
kins on  Trade-marks  (2d  ed.),  p.  150),  where  the  au- 
thorities are  reviewed.  It  is  there  said : 

"The  general  rule  governing  the  supervision  of 
equity  over  the  names  of  corporations  has  been 
comprehensively  stated  as  follows :  '  In  respect  to 
corporate  names,  an  injunction  lies  to  restrain  the 
simulation  and  use  by  one  corporation  of  the  name 
of  a  prior  corporation  which  tends  to  create  con- 
fusion, and  to  enable  the  later  corporation  to  ob- 
tain, by  reason  of  the  similarity  of  names,  the 
business  of  the  prior  one.  The  courts  interfere 
in  these  cases,  not  on  the  ground  that  the  State 
may  affix  such  corporate  names  as  it  may  elect  to 
the  entities  it  creates,  but  to  prevent  fraud,  actual 
or  constructive.'  " 
And  again: 

"Probable  confusion  of  business  is  usually  a 
prominent  factor  in  the  disposition  of  cases  of  this 
class." 
It  is  apparent  that  the  question  is  not  at  all  free 


749 

from  doubt,  as  the  authorities  are  in  conflict.  I  am 
not  familiar  with  all  of  the  facts  in  the  present  case, 
and  therefore  can  express  no  definite  opinion.  If  there 
is  any  evidence  of  fraud  or  unfair  dealing,  or  if  the 
name  of  the  Illinois  company  was  simulated  for  the 
purpose  of  deceiving  the  public  and  selling  the  goods 
and  wares  of  the  infringing  company  as  the  goods  and 
wares  of  the  Illinois  company,  the  courts  will  interfere 
by  injunction.  I  am  inclined  to  the  opinion  that  the 
identity  of  names,  with  proof  that  their  use  leads,  or 
tends  to  lead,  to  confusion  in  the  mind  of  the  purchas- 
ing public,  is  sufficient  to  obtain  relief.  In  the  case  of 
Koebel  v.  Landlords'  Protective  Bureau,  supra,  the 
Supreme  Court  of  Illinois  goes  a  long  way  toward 
establishing  that  proposition.  True  in  that  case,  al- 
though the  evidence  was  conflicting,  there  was  some 
evidence  of  a  fraudulent  purpose,  and  the  language 
of  the  court  should  perhaps  be  read  in  that  connec- 
tion. If  the  two  companies  are  engaged  in  an  entirely 
different  business  there  can  be  no  attempt  to  sell  the 
goods  of  one  company  as  those  of  the  other,  and  there- 
fore no  relief  could  be  had.  But  if  the  business  of  the 
two  corporations  is  the  same  and  the  identity  of  names 
results  in  confusion  and  induces  the  public  to  believe 
that  the  business  of  the  one  company  is  the  same  as  the 
other ;  if  there  is  some  evidence  of  fraud,  either  actual 
or  constructive,  relief  should,  and  I  think  will,  be 
granted. 

In  some  cases  the  mere  adoption  of  the  name  of  an- 
other corporation  by  a  corporation  engaged  in  the  same 
line  of  business  would  be  sufficient  to  obtain  relief  as, 
for  instance,  if  the  name  of  the  former  corporation 
were  well  and  favorably  known  to  the  public  at  large. 
In  such  a  case  fraud  would  probably  be  presumed,  as 
in  the  Philadelphia  Trust  Co.  case,  supra.  It  is  imma- 
terial, however,  that  the  infringing  company  did  not 
intend  to  impose  upon  the  public  or  even  that  it  did  not 
know  of  the  existence  of  the  former  company.  The 
case  can  only  be  determined,  however,  by  reference  to 
all  of  the  facts  and  circumstances,  and  as  these  are 


750 

not  before  me  I  can  give  only  a  resume  of  the  law  as 
it  applies  to  facts  generally. 

NOTE: — See,  also,  the  following  Illinois  cases  upon  this  subject: 
Elgin  National  Watch  Co.  v.  Eppenstein,  1  111.  C.  C.,  602;  N.  Y.  Dental 
Parlors  v.  Froon,  1  111.  C.  C.,  460;  People  v.  Rose,  219  111.,  46;  People 
v.  Rose,  225  111.,  496,  498 ;  Elgin  Natl.  Watch  Co.  v  Illinois  Watch  Case 
Co.,  179  U.  S.,  665;  McFell  Electric  $  Telephone  Co.  v.  McFell  Elec- 
tric Co.,  110  111.  App.,  182;  Imperial  Mfg.  Co.  v.  Schwartz,  105  111. 
App.,  525;  International  Committee  Y.  W.  C.  A.  v.  Y.  W.  C.  A.,  194 
111.,  194;  Allegretti  v.  Allegretti  Chocolate  Cream  Co.,  177  111.,  129; 
Ball  v.  Siegel,  116  111.,  137;  Drummond  Tobacco  Co.  v.  Bundle,  H4  111., 
412;  Hazleton  Boiler  Co.  v.  Hazleton  Tripod  Boiler  Co.,  142  111.,  194; 
Elgin  Butter  Co.  v.  Elgin  Creamery  Co.,  155  111.,  127;  Chicago  Land- 
lords' Protective  Bureau  v.  Koebel,  210  111.,  176,  and  also  Howe  Scale 
Co.  v.  Wickoff,  Seamans  #  Benedict,  198  U.  S.  118.— Ed. 


THE  LIABILITY  OF  A  PARENT  CORPORATION  FOR  THE  ACTS  OF 
THE  MANAGERS  OF  INCORPORATED  BRANCH  COMPANIES. 

(Barnhart  Bros.  &  Spindler,  December  30,  1905.) 

"We  have  branches  in  Texas,  New  York,  Min- 
nesota, Washington,  D.  C.,  State  of  Washington, 
Nebraska  and  Missouri,  the  incorporated  houses, 
in  which  we  own  the  majority  of  the  capital 
stock.  Will  you  kindly  ask  your  general  attorney, 
Mr.  Levy  Mayer,  to  what,  if  any,  extent,  we,  a 
separate  corporation,  Barnhart  Bros.  &  Spindler, 
Chicago,  are  responsible  for  the  acts  of  the  various 
managers  ?  < 

Also  does  it  make  a  difference  in  our  liability 
whether  these  houses  advertise  with  our  knowl- 
edge, respectively,  as 

'Branch  House  of  Barnhart  Bros.  &  Spindler.' 
'Branch  of  Barnhart  Bros.  &  Spindler.' 
'Sales  Agent  of  Barnhart  Bros.  &  Spindler.' 
'Selling  Agent  of  Barnhart  Bros.  &  Spindler.' 
'Selling  Barnhart  Bros.  &  Spindler 's  Type.' 
In  the  absence  of  any  actual  contract  of  agency  be- 
tween the  Chicago  company  and  the  other  corporations 
referred  to,  or  their  managers,  or  of  any  conduct  on 
the  part  of  Barnhart  Bros.  &  Spindler  from  which  such 
agency  may  be  implied,  the  Chicago  corporation  is  not 
liable  for  the  acts  of  such  corporations  or  managers. 


751 

The  various  corporations  are,  of  course,  responsible 
for  the  conduct  of  their  respective  managers  while  the 
latter  are  acting  within  the  scope,  or  the  apparent 
scope,  of  their  authority.  These  corporations  are,  how- 
ever, entirely  separate  legal  entities,  and  the  fact  that 
the  Chicago  corporation  is  the  principal  stockholder 
in  them  imposes  upon  it  no  direct  liability  for  the  con- 
duct of  the  agents  of  such  corporations. 

From  the  second  question,  however,  I  infer  that  the 
Chicago  company  has  allowed  the  subsidiary  corpora- 
tions to  represent  themselves  as  its  agents  or  as  branch 
houses  of  the  Chicago  concern. 

It  is  well  settled  that  where  one  person  holds  an- 
other out  as  his  agent  with  authority,  he  is  liable  for 
his  acts  on  the  ground  of  estoppel,  whether  he  actually 
intends  to  be  bound  or  not.  And  it  is  equally  true  that 
when  one  with  full  knowledge  allows  another  to  rep- 
resent himself  as  his  agent,  he  may  become  liable  as 
principal. 

In  Garner  v.  Fischer  Brewing  Co.,  6  Utah,  332,  23 
Pac.,  755,  the  court  said: 

"If  a  person  in  conducting  a  business,  repre- 
sents that  he  is  the  agent  of  another,  with  the 
other's  knowledge  and  acquiescence,  the  latter  will 
be  liable  for  indebtedness  incurred  in  such  busi- 
ness to  third  parties  dealing  with  the  agent  in 
good  faith  upon  such  representations.  Such  rep- 
resentations may  be  made  by  signs  on  the  business 
house,  or  by  advertisements  or  correspondence, 
or  other  representations,  verbal  or  written." 
In  Vol.  1,  Am.  &  Eng.  Ency.  of  Law  (2nd  ed.),  pp. 
959-960,  the  rule  is  laid  down : 

"In  a  great  proportion  of  cases  agency  arises, 
not  from  the  use  of  express  language  nor  from 
the  existence  of  a  well-defined  relation,  but  from 
the  general  conduct  of  the  parties.  Where  one 
person  holds  another  out  as  his  agent  with  certain 
authority  he  is  liable  for  his  acts  on  the  ground  of 
estoppel,  whether  he  actually  intends  to  be  bound 
or  not.  So  when  one,  with  full  knowledge  allows 
another  to  represent  him  as  his  agent  and  remains 


752 

silent  when  occasion  arises  for  him  to  speak,  he 
may  be  held  as  principal." 

In  Gilbraith  v.  Linegerber,  69  N.  C.,  145,  it  was  held 
(syllabus) : 

"If  a  manufacturing  company  knowingly  per- 
mits a  person  to  sell  goods  in  a  store  house  with 
their  name  over  the  door,  though  in  a  town  dis- 
tant from  their  place  of  business,  it  is  a  circum- 
stance which,  taken  with  others,  such  as  that  he 
sold  their  manufactured  articles,  and  bought  bacon 
and  other  country  produce  for  them,  must  be  con- 
sidered as  tending  to  prove  the  fact  that  he  was 
acting  as  their  agent. 

When  one  permits  another  to  hold  himself  out 
to  the  public  as  his  agent  to  sell  and  buy  certain 
kinds  of  goods  for  him,  he  is  bound  by  the  acts 
and  contracts  of  such  agent  within  the  scope  of 
his  authority,  but  that  authority  does  not  extend 
to  the  borrowing  of  money  or  buying  clothes  for 
himself. ' ' 

In  R.  R.Co.  v.  Vernedoe,  81  Ga.,  175,  7  S.  E.,  129,  it 
was  held  that  a  railroad  company  which  with  knowl- 
edge and  without  objection  allows  a  person  to  rent  an 
office  on  its  right  of  way  and  put  up  a  sign  styling  it 
the  offices  of  the  company,  it  is  liable  for  the  purchase 
by  such  person  in  its  name,  although  there  was  another 
neighboring  railroad  company  of  the  same  name. 

If,  therefore,  the  Chicago  concern  has  full  knowl- 
edge of  the  fact  that  the  agents  of  the  other  companies 
are  holding  themselves  out  as  the  agents  or  as  branch 
houses  of  the  Chicago  company,  the  latter  company  is 
liable  for  the  acts  of  such  agents  within  the  scope,  or 
the  apparent  scope,  of  the  authority  of  such  agents. 
The  party  seeking  to  hold  the  principal  in  such  case 
must  have  believed  in  the  existence  of  and  relied  upon 
the  agency.  The  question  propounded  does  not  give 
the  corporate  names  of  the  "branches."  I  assume 
they  are  the  same  as  that  of  the  parent  company. 
Though  in  my  opinion  the  last  name  used  "Selling 
Barnhart  Bros.  &  Spindler's  Type"  will  probably  not 
imply  an  agency,  I  would  advise  a  substitute  like  this— 
"Dealers  in  Type  made  by  Barnhart  Bros.&  Spindler." 


753 


THAT  UNDER  THE  LAWS  OF  ILLINOIS,  AN  ILLINOIS  CORPORA- 
TION NEED  NOT  PUBLISH  A  NOTICE  OF  ITS  ANNUAL  MEET- 
ING, UNLESS  REQUIRED  BY  ITS  BY-LAWS. 

(B.  F.  Barnes  Company,  Dec.  30,  1905.) 
"We  enclose,  herewith,  P/C  from  one  of  our 
local  papers.    Please  advise  if  it  is  necessary  for 
us  to  publish  report  of  our  stockholders'  meeting. 
We  think  this  does  not  apply  to  our  line  of  busi- 
ness, but  would  be  glad  to  have  your  advices." 
The  postal  card  referred  to  is  as  follows : 

"NOTICE  TO  CORPORATIONS. 

Regarding  the  publication  of  notice  of  annual 
meetings. 

We  wish  to  remind  you  of  the  law  requiring  you 
to  publish  notices  of  your  Annual  Meeting  of 
Stockholders,  and  to  suggest  that  you  permit  us  to 
publish  same. 

THE  REGISTER-GAZETTE  COMPANY." 
There  is  no  provision  in  the  Illinois  statutes  requir- 
ing publication  of  notice  of  the  annual  meeting  of 
stockholders  of  a  corporation.  The  provisions  of  the 
Corporation  Act  regarding  publication  of  stockhold- 
ers' meetings  of  corporations  for  profit  are: 

(1)  Whenever  the  stockholders  themselves  call 
a  meeting  by  call  signed  by  members  owning  two- 
thirds  of  the  stock,  notice  of  the  call  must  be  pub- 
lished for  three  weeks  in  a  newspaper  where  the 
principal  office  is,  and  also  at  the  seat  of  govern- 
ment.    (Corp.  Act,  Sec.  22.) 

(2)  When  corporation  is  to  be  dissolved   at 
meeting,  notice  of  the  meeting  and  its  object  shall 
be  published  for  three  weeks  in  a  newspaper  pub- 
lished in  the  county  wherein  the  principal  office  is 
located.     (Hurd's  Rev.  Stat.,  page  480.) 

(3)  When  a  corporation  is  to  increase  or  de- 
crease its  capital  stock  or  number  of  directors,  or 
enlarge  or  change  its  object,  or  change  its  name 
or  place  of  business  or  consolidate  with  another 
corporation  at  a  meeting  of  stockholders,  publi- 


754 

cation  of  notice  of  such  meeting  for  three  weeks 
shall  be  made  in  some  newspaper  printed  in  or 
nearest  the  county  in  which  the  principal  business 
office  of  said  corporation  is  located.  (Hurd's  Rev. 
Stat.,  p.  482.) 

(4)  When  any  railroad  company  is  to  consoli- 
date with  another  railroad  company  at  a  meeting, 
notice  of  meeting  by  publication  for  nine  weeks 
shall  be  given.     (Kurd's  Eev.  Stat.,  p.  483.) 

(5)  Whenever    any    corporation    desires     to 
change  the  number  of  directors  from  an  even  to 
odd  number  at  a  special  meeting,  notice  of  the 
special  meeting  shall  be  published  for  three  weeks 
in  some  newspaper  in  or  nearest  the  county  at 
which  the  principal  office  is  located.    (Hurd's  Rev. 
Stat.,  p.  484.) 

I  am  of  the  opinion  that  notice  of  the  annual  meet- 
ing need  not  be  published  unless  business  is  to  be  trans- 
acted of  such  nature  that  publication  is  required,  as 
stated  above  unless  required  by  the  by-laws. 


WHETHEE  A  EAILROAD  COMPANY  IS  LIABLE  FOE  DAMAGES 
WHEN  DELIVEEY  IS  MADE  WITHOUT  PBODUCTION  OF  THE 
BILL  OF  LADING  WHEEE  THE  BILL  OF  LADING  BEADS 
"NOTIFY"  INSTEAD  OF  "OBDEB  AND  NOTIFY." 

(The  Oliver  Typewriter  Company,  December  30, 1905.) 
"Some  time  ago  we  made  a  shipment  via  the 
B.  &  0.  Railroad  Company  from  Chicago,  con- 
signed to  the  Oliver  Typewriter  Company,  Dayton, 
Ohio,  notify  C.  H.  A.  Lange.  The  shipment  was 
delivered  by  the  connecting  line  to  Mr.  Lange  with- 
out presentation  by  him  of  the  original  railroad 
receipt,  which  had  been  attached  to  a  draft  made 
against  him  by  us  and  forwarded  to  a  bank  for 
collection. 

The  railroad  company  has  taken  the  position 
that  the  shipment  was  not  so  consigned  as  to  re- 
quire the  delivery  of  the  railroad  receipt  and  that, 
therefore,  we  have  no  claim  against  them  for  de- 


755 

livery  of  the  shipment  to  Mr.  Lange.  It  is  claimed 
that  the  words  'order  of  should  have  been  in- 
serted before  the  words  'Oliver  Typewriter  Com- 
pany' in  the  consignment  of  the  shipment. 

If  you  can  consistently  give  us  the  opinion  of 
your  legal  representative  on  the  point  in  question 
we  shall  be  glad  to  have  you  do  so." 
The  contract  of  shipment  in  question  is  an  Illinois 
contract,  and  is  to  be  governed  by  the  laws  of  Illinois. 
Any  limitations  contained  in  the  bill  of  lading,  or  any 
obligations  assumed  by  the  carrier  are  to  be  determined 
by  the  laws  of  Illinois. 

Nenno  v.  R.  R.  Co,,  80  S.  W.,  24  (Mo.  App., 

1904). 
C.  C.  C.  &  St.  L.  Ry.  Co.  v.  Druien,  26  Ky.  Law 

Rep.,  103 ;  80  S.  W.,  778. 

A  carrier  is  an  insurer  of  the  safe  and  true  delivery 
of  the  goods  carried  to  the  person  to  whom  the  goods 
are  consigned. 

Pac.  Express  Co.  v.  Sherer,  160  111.,  215,  222. 

Exp.  Co.  v.  Milk,  73  111.,  224. 

I.  C.  R.  R.  Co.  v.  Southern  Bank,  41  111.  App., 

287. 
Hutchinson  on  Carriers  (second  edition),  Sec. 

344. 

Com'l  Bank  v.  Ry.  Co.,  160  111.,  401,  406. 
It  is  the  duty  of  a  carrier  to  ascertain  whether  a  bill 
of  lading  was  delivered  to  the  shipper,  and  if  so,  the 
carrier  must  retain  the  property  until  demanded  by 
one  claiming  under  that  title. 

Com'l  Bank  v.  Railway  Co., 160  111.,  401  (1896). 
7.  C.  R.  R.  Co.  v.  Tibbitts,  41  111.  App.,  287 

(1891). 

Gates  v.  R.  R.  Co.,  42  Neb.,  379,  60  N.  "W.,  583. 
Bass  v.  Glover,  63  Ga.,  745. 
Furman  v.  72.  R.  Co.,  106  N.  Y.,  579. 
In  Com'l  Bank  v.  Railway  Co.,  160  111.,  401,  406,  the 
court  said: 

"A  common  carrier,  to  discharge  his  liability 
for  goods  transported  by  delivery,  must  deliver  to 
the  person  who  is  lawfully  entitled  to  receive  the 


756 

same.    The  consignee  is  presumptively  the  owner 
of  the  goods,  and  must  be  treated  by  the  carrier 
as  such  owner  until  he  has  notice  to  the  contrary, 
and  delivery  to  him  without  notice  will  discharge 
the  carrier.    The  carrier  should  ascertain  whether 
a  bill  of  lading  was  delivered  to  the  shipper,  and 
if  so,  he  should  retain  the  property  until  demanded 
by  one  claiming  under  that  title.     Too  great  care 
cannot  be  exercised  in  respect  of  the  right  of  the 
person  to  whom  the  delivery  is  made." 
A  misdelivery  of  goods  by  the  carrier  may  be  treated 
as  a  conversion,  and  subjects  the  carrier  to  liability 
for  the  damage  incurred  by  reason  of  such  misde- 
livery. 

C.  C.  C.  &  St.  L.  Ry.  Co.  v.  Potts,  71  N.  E.,  685 

(Ind.). 

R.  R.  Co.  v.  Lamed,  103  111.,  293. 
Hutchinson  on  Carriers  (second  edition),  Sec. 

345. 

In  I.  C.  R.  R.  Co.v.  Southern  Bank,  41  111.  App.,  287 
(1891),  it  appeared  that  the  shipments  were  made 
under  a  bill  of  lading  to  the  order  of  consignor  and 
across  the  face  of  the  bill  was  written  "notify  Weare 
Commission  Company."  The  bill  of  lading  was  subt 
sequently  negotiated  through  the  banks  with  a  sight 
draft  drawn  on  the  Commission  Company.  The  rail- 
road company  delivered  the  shipment  to  the  Weare 
Commission  Company  without  production  of  the  bill 
of  lading.  Action  was  brought  against  the  railroad  for 
wrongful  delivery  and  recovery  had.  Judge  Moran, 
in  giving  the  opinion  of  the  court,  said  (p.  291) : 

' '  Where  a  party  ships  goods  which  he  intends  to 
deliver  under  a  previous  contract,  but  takes  the 
bill  of  lading  to  his  own  order,  the  delivery  of 
the  goods  to  the  carrier  will  not  be  held  to  be  a 
delivery  to  the  person  to  whom  the  goods  are  con- 
tracted, for  the  reason  that  by  taking  the  bill  of 
.  lading  to  his  own  order,  the  shipper  reserves  to 
himself  the  power  of  disposing  of  the  property. 
When  the  property  is  in  the  hands  of  the  carrier 
the  bill  of  lading  shows  to  whom  he  is  to  deliver  it. 


757 

The  delivery  of  the  bill  of  lading  properly  in- 
dorsed, is  tantamount  to  an  actual  delivery  of  the 
goods  described  in  it.  Waples,  therefore,  reserves 
to  himself  the  right  to  dispose  of  the  property 
at  any  time  while  it  was  in  transit,  or  at  any  time 
after  its  arrival  at  the  point  of  destination.  It  is 
not  pretended  that  the  Southern  Bank  had  any 
notice  of  Waples'  relations  with,  or  contract  obli- 
gations to,  the  Weare  Commission  Company.  The 
fact  that  the  bill  of  lading  contained  a  direction  to 
notify  the  Weare  Commission  Company,  was  no 
indication  to  the  bank  that  said  company  had  any 
interest  in  the  fifty  barrels  of  rice. 

The  words  of  notice  signify  nothing  more  than 
that  an  agent  at  the  point  of  delivery  is  to  be  in- 
formed ;  such  words  are  very  far  from  an  authority 
to  deliver  the  goods  to  the  person  named,  and 
were  not  such  words  as  would  put  a  person  dealing 
with  the  bill  of  lading  on  inquiry. ' ' 
And  held : 

' '  The  defendant  company  had  no  right  to  deliver 
the  goods  except  to  the  order  of  Waples.     The 
railroad  company  has  discharged  itself  only  by  its 
own  wrongful  act  in  delivering  the  goods  in  vio- 
lation of  its  own  bill  of  lading.    While  the  goods 
were  in  transit,  that  bill  of  lading  stood  for  them 
and  for  a  valuable  consideration,  and  without  no- 
tice of  any  fact  to  put  it  on  inquiry,  the  bank  be- 
came the  holder  thereof.     It  was  entitled  to  the 
goods,  and  in  default  of  the  goods  it  is  entitled  to 
their  value  from  the  appellant." 
In  the  present  instance  the  shipment  was  made  by 
the  Oliver  Typewriter  Company  to  the  "Oliver  Type- 
writer Co.,  Dayton,  Ohio,  notify  C.  H.  A.  Lange."  The 
question  is  as  to  what  effect  the  omission  of  the  word 
"order"  has  to  the  designation  of  the  consignee. 

In  cases  where  the  word  "order"  was  also  used,  it 
is  said  that 

"the  very  presence  of  the  word  notify  in  such  a 
case  *  shows  that  the  person  named  is  not 

intended  as  the  consignee.    If  he  were,  the  word  is 


758 

wholly  unnecessary,  as  it  is  the  duty  of  the  carrier 
to  notify  the  consignee  of  the  arrival  of  the  goods 
without  any  such  notice.  To  place  in  the  bill  of 
lading  an  express  direction  to  notify  a  certain 
person  to  whom,  if  he  were  the  consignee,  it  was 
the  carrier's  duty  to  give  notice,  is  therefore,  a 
plain  notice  that,  in  the  absence  of  further  direc- 
tions, he  is  not  the  consignee." 

Hutchinson  on  Carriers  (second  edition),  Sec. 
131b. 

Furman  v.  R.  R.  Co.,  106  N.  Y.,  579. 

Myrick  v.  Mich.  Cent.  R.  Co.,  123  U.  S.,  727, 

736. 

So,  in  I.  C.  R.  R.  Co.  v.  Southern  Bank,  41  111.  App., 
287,  291  (1891),  it  is  said  that 

"  'notify'  signifies  nothing  more  than  an  agent  at 
the  point   of  delivery  is   to   be  informed;   such 
words  are  very  far  from  an  authority  to  deliver 
the  goods  to  the  person  named. ' ' 
In  6  Cyc.,  470,  it  is  said : 

"But  the  fact  that  the  carrier  is  directed  to  give 
notice  to  a  person  named  of  the  arrival  of  the 
goods,  will  not  make  the  person  so  named  the  con- 
signee in  such  sense  that  the  delivery  to  him  will 
be  sufficient." 

In  Grayson  County  Nat.  Bank  v.  R.  R.  Co.,  79  S.  W., 
1094  (Tex.  Civ.  App.,  1904),  the  bill  of  lading  named 
as  consignee  the  consignor  "his  or  their  assignee." 

It  was  held  that  under  these  circumstances  delivery 
could  not  be  made  without  production  of  the  bill  of 
lading.  And  the  court  further  held  that  evidence  would 
not  be  admissible  to  show  that  according  to  the  rules 
and  customs  of  all  railroads,  such  a  bill  of  lading  would 
be  considered  to  authorize  a  delivery  by  the  carrier 
to  the  consignee  without  production  or  surrender  of 
the  bill  of  lading. 

In  Union  Stock  Yards  Co.  v.  Westcott,  47  Neb.,  300, 
66  N.  W.,  419  (1896),  it  appears  that  a  shipment  of 
cattle  was  made  by  a  bank  for  its  own  benefit,  in  its 
cashier's  name,  from  Sidney  to  South  Omaha,  Neb., 
over  the  Union  Pacific  Railway,  taking  a  bill  of  lading 


759 

showing  its  cashier  to  be  both  consignor  and  consignee, 
and  having  written  thereon  "notify  Miller  Bros."  It 
does  not  appear  that  the  word  "order"  was  on  the  bill 
of  lading.  Delivery  was  made  by  the  railroad  company 
to  Miller  Brothers  without  the  production  of  the  bill 
of  lading.  It  was  held  negligence  on  the  part  of  the 
carrier  to  deliver  the  shipment  without  requiring  pro- 
duction of  the  bill  of  lading,  and  that  such  negligence 
could  not  be  excused  by  evidence  of  any  custom  or 
usage  to  the  contrary. 
The  court  said: 

"While  Miller  Brothers  were  to  be  notified  of 
the  arrival  of  the  stock,  yet  this  fact  did  not  au- 
thorize them  to  receive  the  cattle  without  the  pro- 
duction of  the  bill  of  lading.  The  use  of  the  words 
1  Miller  Bros.'  in  the  bill  of  lading  showed  that 
they  were  not  intended  as  the  consignees,  but  in- 
dicated merely  that  they  were  to  be  advised  of 
the  arrival  of  the  cattle.  Besides,  it  was  stated  in 
the  bill  of  lading  that  Mancourt  was  the  consignee 
and  this  the  plaintiff  knew,  or  should  have  ascer- 
tained before  parting  with  the  possession  of  the 
stock.  Delivery  could  alone  be  safely  made  to  the 
consignee,  or  some  one  authorized  by  him  to  re- 
ceive the  cattle." 

I  am  not  informed  what  conditions  were  contained 
in  the  bill  of  lading  issued  to  the  Oliver  Typewriter 
Company,  or  whether  the  conditions,  if  any,  were  as- 
sented to  by  them.  But  in  the  absence  of  any  condi- 
tion limiting  the  delivery  of  the  shipment,  or  even  if 
such  conditions  were  contained  in  the  bill  of  lading, 
and  not  expressly  assented  to  as  required  in  Illinois, 
I  am  of  the  opinion  that  the  railroad  company  deliver- 
ing the  goods  in  question  to  Lange  was  guilty  of  neg- 
ligence, and  liable  for  any  damages  resulting  from  such 
wrongful  delivery.  The  fact  that  consignor  and  con- 
signee were  the  same  is  the  clearest  evidence  upon  the 
face  of  the  transaction  that  the  consignor  had  deter- 
mined to  keep  the  shipment  within  his  control.  The 
phrase  "notify  L."  was  merely  a  direction  to  the  rail- 
road company  that  L.  was  to  be  notified  of  the  arrival 


760 

of  the  shipment  and  did  not  warrant  the  carrier  in  pre- 
suming that  L.  was  the  consignee  entitled  to  the  goods. 
I  am  of  the  opinion  that  there  is  no  difference  in  legal 
effect  between  the  directions  of  this  bill  of  lading  and 
one  on  which  the  words  "order  of"  had  been  inserted. 
It  is  to  be  noted  in  this  connection  that  the  Uniform 
Bill  of  Lading  and  Bills  of  Lading  in  use  by  many  rail- 
roads contain  the  following  provision : 

"If  the  word  'order'  is  written  hereon  imme- 
diately before  or  after  the  name  of  the  party  to 
whose  order  the  property  is  consigned,  without 
any  condition  or  limitation  other  than  the  name 
of  a  party  to  be  notified  of  the  arrival  of  the  prop- 
erty, the  surrender  of  this  bill  of  lading  prop- 
erly endorsed  shall  be  required  before  the  delivery 
of  the  property  at  destination.    If  any  other  than 
the  aforesaid  form  of  consignment  is  used  herein, 
the  said  property  may,  at  the  option  of  the  car- 
rier, be  delivered  without  requiring  the  production 
or  surrender  of  this  bill  of  lading." 
It  is  doubtful  whether  this  provision  can  be  so  con- 
strued to  authorize  a  delivery  to  other  than  the  per^- 
son  entitled  thereto,  even  where  the  word  "order"  is 
not  written  thereon  in  the  manner  indicated.     If  the 
clause  in  question  is  assented  to  by  the  shipper  and 
the  word  ' '  order ' '  does  not  appear  thereon,  this  would 
justify  a  delivery  without  the  production  of  the  bill  of 
lading,  but  even  then  the  delivery  must  be  made  to 
the  person  entitled  to  the  possession  of  the  goods. 
Prima  facie  the  consignee  is  the  person  entitled  to  the 
possession  of  the  goods  unless  the  carrier  has  notice 
that  the  goods  are  owned  by  a  third  person. 

In  Marrus  v.  New  Haven  Steamboat  Co.,  60  N.  Y. 
Supp.,  994  (1899),  this  identical  provision  of  the  Uni- 
form Bill  of  Lading  was  before  the  court.  The  bill  of 
lading  contained  a  similar  condition,  and  a  shipment 
was  made,  but  the  word  "order"  as  referred  to  in  the 
condition,  was  not  inserted.  Delivery  was  made  by 
the  carrier  without  the  production  of  the  bill  of  lad- 
ing. It  was  held  that  the  carrier  had  the  right  to 
deliver  without  the  presentation  of  the  bill  of  lading 


761 

since  the  condition  was  not  complied  with.  But  from 
the  syllabus  of  the  case  it  would  appear  that  delivery 
was  made  to  the  consignee. 

In  Illinois,  a  condition  limiting  the  common  law 
carrier's  liability  is  not  binding  unless  such  condition 
is  expressly  assented  to  by  the  shipper.  The  mere  re- 
ceipt of  the  bill  of  lading  does  not  amount  to  an  assent 
thereto,  and  the  burden  of  showing  assent  is  on  the  car- 
rier. 

E.  J.  &  E.  Ry.  v.  Bates  Machine.  Co.,  98  111., 

App.,  311. 

C.  &  N.  W.  R.  R.  v.  Calumet  Stock  Farm,  194 
111.,  9. 

B.  &  0.  8.  W.  R.  R.  Co.  v.  Fox,  113  111.  App., 
180,  187. 

C.  &  N.  W.  Ry.  Co.,  v.  Simmons,  160  111.,  648. 
And  the  general  principle  that  a  contract  relieving 

the  carrier  from  liability  for  negligence  will  not  be 

valid  is  applicable  also  where  it  is  sought  to  escape 

responsibility  for  goods  held  for  delivery,  or  the  like. 

Springs  v.  South  Bound  R.  R.,  46  S.  C.,  104; 

24  S.  E.,  166. 
Pac.  Exp.  Co.  v.  Wallace,  60  Ark.,  100;  29 

S.  W.,  32. 

6  Cyc.  Law  and  Procedure,  394. 

And  a  provision  in  a  shipping  contract  that  goods 
are  to  be  shipped  "as  per  condtions  in  company's  bill 
of  lading"  does  not  render  binding  on  the  shipper  con- 
ditions written  into  the  bill  not  read  by  the  shipper, 
and  without  his  knowledge,  and  not  assented  to  or 
authorized  by  him. 

C.  C.  C.  &  St.  L.  Ry.  Co.  v.  Potts,  71  N.  E., 

685  (Ind.  App.,  1904). 

In  Tibbitts  v.  R.  I.  &  P.  Ry.  Co.,  49  111.  App.,  567, 
572  (1893),  it  was  provided  in  the  bill  of  lading  that 
in  the  event  of  the  loss  of  any  property  for  which  the 
carrier  might  be  responsible,  the  value  and  cost  of  the 
same  at  the  point  and  time  of  shipment  should  govern 
the  settlement  for  the  same.  It  was  claimed  that  this 
clause  was  inoperative  as  an  attempt  to  limit  a  com- 
mon law  liability.  The  court  said : 


762 

"We  do  not  regard  the  provision  as  a  limita- 
tion of  liability  as  a  carrier,  and  see  no  reason  why 
it  should  not  be  binding  on  a  shipper,  if  under- 
stood and  assented  to  by  him.  Whether  he  does 
so  understand  and  assent  is  a  matter  of  evidence 
and  a  question  of  fact." 

It  is  the  duty  of  the  carrier  at  common  law  to  make 
a  delivery  of  the  goods  to  the  person  legally  entitled 
thereto,  and  I  am  of  the  opinion  that  the  clause  in 
question  is  a  limitation  of  common  law  liability,  which 
requires  the  express  assent  of  the  shipper. 

Therefore,  if  such  a  condition,  as  is  in  the  Uniform 
Bill  of  Lading,  was  contained  in  the  contract  of  ship- 
ment entered  into  at  Chicago,  it  would  not  be  binding 
on  the  Oliver  Typewriting  Company  unless  expressly 
assented  to. 

If  no  condition  of  the  kind  was  contained,  or  if  the 
condition  was  not  expressly  assented  to,  I  am  of  the 
opinion  that  the  railroad  company  is  liable  for  ^t 
resultant  damages  for  the  misdelivery. 


LIMITATION  OF  LIABILITY  BY  THE  CARRIER  FOR  LOSS,  DETEN- 
TION OR  DAMAGE  TO  TRUNKS  CONTAINING  SAMPLES  OF 
MERCHANDISE  FOR  SALE. 

(Burley  &  Tyrrell,  December  30,  1905.) 
"Enclosed  please  find  notice  which  we  have  just 
received  from  one  of  our  representatives  showing 
a  new  agreement  which  the  Big  Four  Eailroad 
wishes  parties  who  ship  goods  in  our  line  over 
their  road  to  sign.  This  insures  quite  a  hardship 
upon  us  and  will  ask  your  opinion  as  to  whether 
it  is  necessary  for  us  to  sign  anything  of  this 
kind  or  not.  Our  representative  reports  that  they 
will  not  accept  baggage  unless  this  is  signed.  You 
will  notice  they  do  not  even  agree  to  use  every 
care  in  handling  the  baggage,  and  under  these 
conditions  we  would  have  no  redress  whatever  in 
case  of  breakage." 


763 
The  agreement  referred  to  is  as  follows: 

' '  AGREEMENT OWNER 's  RISK. 

"In  consideration  of  the  transportation  of  the 
property  named  herein,  on  a  passenger  train  by 
the  above  company  and  its  connecting  carriers,  to 
destination,  I  hereby  stipulate  and  agree  that  no 
claim  shall  be  made  against  said  company  or  any 
of  such  connecting  carriers  for  damages  in  case 
said  property  or  any  of  it  shall  be  delayed,  de- 
stroyed, damaged,  or  lost  from  whatever  cause; 
it  being  understood  that  the  company  transport- 
ing said  property  is  not  a  common  carrier  of  such 
property  upon  its  passenger  trains  and  assumes 
no  responsibility  therefor." 

It  is  the  settled  rule  that  the  liability  of  a  carrier 
of  baggage  is  that  of  an  insurer  of  its  safety  against 
every  accident  which  is  not  the  act  of  God  or  of  the 
public  enemy  or  the  fault  of  the  passenger  himself. 

Hutchinson  on  Carriers  (second  edition),  Sec. 

678. 

Samples  carried  by  a  passenger  in  his  trunk,  with  a 
view  to  enabling  him  to  make  sales  of  goods  similar 
to  the  samples  carried  are  more  properly  mere  mer- 
chandise and  are  not  to  be  included  within  the  term 
baggage.. 

M .  C.  R.  R.  Co.  v.  Carron,  73  III,  348. 
But  when  a  carrier  accepts  samples  as  baggage  with 
knowledge  of  their  character,  it  is  generally  held  lia- 
ble as  for  baggage. 

3  Am.  Eng.  Ency.  Law  (second  ed.),  533. 
Millard  v.  M .  K.  &  T.  R.  R.  Co.,  86  N.  Y.,  441. 
And  the  carrier  may  limit  its  liability  as  insurer 
for  baggage,  but  cannot  stipulate  exemption  from  neg- 
ligence. 

Adams  Express  Co.  v.  Stettaners,  61  111.,  194. 
The  New  England,  110  Fed.,  415. 
Martin  v.  R.  R.  Co.,  L.  E.,  3  Exch.,  9. 
But  in  New  York  the  carrier  may  by  express  con- 
tract limit  the  liability  for  negligence. 

Nicholas  v.  N.  Y.  Cent.  R.  R.  Co.,  89  N.  Y., 
370. 


764 

And  where  merchandise  is  thus  shipped  as  baggage 
the  carrier  having  no  notice  of  its  contents,  the  liability 
of  the  latter  therefor  as  a  common  carrier  does  not 
attach,  nor  does  the  mere  payment  of  extra  compensa- 
tion on  account  of  the  overweight  convert  such  bag- 
gage into  freight. 

Hamburg -American  Packet  Co.  v,  Gottman, 

127  111.,  598. 
C.  <&  C.  R.  E.  Co.  v.  Marcus,  38  111.,  223. 

Under  this  form  of  agreement  the  carrier  is  at- 
tempting to  release  itself  from  all  liability  for  negli- 
gence in  consideration  of  carrying  traveler's  samples 
on  passenger  trains.  While  a  carrier  is  under  no  ob- 
ligation to  carry  samples  as  baggage  on  passenger 
trains,  yet  when  it  does  so  with  the  knowledge  of  the 
character  of  the  samples,  it  is  still  liable  as  aif  in- 
surer. Where  samples  are  carried  as  baggage  ivith- 
out  the  knowledge,  actual  or  implied,  of  the  carrier, 
it  will  not  be  held  liable  as  a  common  carrier,  princi- 
pally because  the  carrier  is  deceived  as  to  the  char- 
acter of  the  baggage,  and  had  the  carrier  known  that 
samples  were  carried  it  could  have  refused  to  take 
them  as  baggage.  But  if  a  carrier  refuses  to  take 
the  samples  as  baggage,  still  it  must  take  the 
same  as  freight  under  its  common  law  liability. 
The  goods  are  of  a  class  that  the  carrier  must  carry. 
In  that  respect  the  carrier  owes  a  duty  to  the  public, 
and  cannot  limit  its  liability  to  that  of  a  private  car- 
rier. 

A  carrier  may  make  extra  charge  for  weight  beyond 
a  reasonable  limit,  or  for  accepting  merchandise  which 
is  not  properly  baggage,  and  upon  accepting  the 
charge  for  excess  becomes  liable  as  a  common  carrier 
with  reference  to  the  merchandise  thus  accepted  to 
the  same  extent  as  though  the  goods  were  carried  as 
freight : 

Trimble  v.  N.  Y.  Cent.  R.  Co.,  162  N.  Y.,  84 
(1900). 

The  transaction  as  to  excess  weight  or  as  to  mer- 
chandise not  properly  baggage,  extra  compensation 
being  charged,  may  be  treated  as  a  separate  contract. 


765 

Talcott  v.  R.  R.  Co.,  169  N.  Y.,  461;  54  N. 

E.,  1. 

Strduss  v.  W abash  R.  Co.,  17  Fed.,  209. 
Millard  v.  R.  R.  Co.,  86  N.  Y.,  461. 
Traveler's  samples  are  a  class  of  goods  which  must 
be  carried  by  a  carrier  at  least  as  freight,  under  a  com- 
mon law  liability  as  insurer.    They  do  not,  in  my  opin- 
ion, come  under  the  category  of  that  class  of  cases 
where  the  carrier  is  under  no  obligation  whatever  to 
carry,  but  as  a  consideration  for  carrying  goods  ex- 
empt itself  from  its  common  law  liability. 

Thus,  as  it  is  optional  with  a  carrier  to  accept  or 
refuse  explosives  for  shipment,  it  can  do  so  with  such 
limitation  of  its  common  law  liability  as  it  sees  fit  to 
impose. 

Col.  Powder  Works  v.  R.  R.  Co.,  113  Cal., 

329;  45  Pac.,  641. 

So  a  railroad  company  is  not  required  as  a  common 
carrier  to  transport  a  circus  train,  but  it  may  refuse 
to  transport  the  same  except  under  a  special  contract 
limiting  its  liability  to  that  assumed  by  a  private  car- 
rier. 

Wilson  v.  Atlantic  Coast  Line  R.  R.  Co.,  129 
Fed.,  774.     (Affirmed  in  133  Fed.,  1022;  66 
C.  C.  A.) 
Coup  v.  Railway  Co.,  56  Mich.,  Ill ;  22  N.  W., 

215. 
C.  M.  &  St.  P.  R.  Co.  v.  Wallace,  66  Fed.,  506; 

14  C.  C.  A.,  257. 
Robertson  v.  Railroad  Co.,  156  Mass.,  525; 

31  N.  E.,  650. 

And  so  in  the  Express  Cases,  117  U.  S.,  1,  it  is  held 
that  railroad  companies  are  not  required  by  usage  or 
by  common  law  to  transport  the  traffic  of  independent 
express  companies  over  their  lines  in  the  manner  which 
such  traffic  is  usually  carried  and  handled.  A  rail- 
road company  can  contract  specially  with  an  express 
company  as  to  the  terms  and  conditions  and  limita- 
tions of  liability  upon  which  the  express  company  can 
transport  its  goods  over  the  lines  of  the  railroad. 
These  cases  afford  illustrations  of  services  which  a 


766 

common  carrier,  as  such,  is  not  required  to  perform; 
and  common  carriers  are  held  to  be  private  carriers 
with  respect  to  freight,  which  it  is  not  their  business 
to  carry.  In  many  of  those  cases  the  parties  furnish 
their  own  cars,  or  retain  the  possession  and  control 
of  the  goods  shipped;  and  the  authorities  therefore 
hold  that  it  is  competent  for  the  carrier  to  limit  his 
liability. 

The  distinction,  however,  between  that  class  of  cases 
and  this  case  seems  obvious.  Here  the  carrier  owes  a 
duty  to  transport  the  samples  as  freight  at  common 
law  liability,  and  the  carrier  may  accept  the  samples 
as  baggage  and  still  be  liable  as  insurer. 

A  carrier  may  by  special  contract  lawfully  'limit  its 
liability  as  a  carrier  of  baggage  as  long  as  it  does  not 
exempt  itself  from  liability  for  negligence.  But  I  am 
of  the  opinion  that  in  this  ma'nner  as  a  consideration 
to  carrying  samples  as  baggage  it  will  be  against  public 
policy  to  allow  a  carrier  to  exempt  its  liability  for  neg- 
ligence. 

In  Sounders  v.  So.  R.  R.  Co.,  128  Fed.,  15  (1904),  it 
was  held  that  a  contract  releasing  a  carrier  from  lia- 
bility "for  loss  or  damage  to  baggage,"  does  not  in 
terms  release  it  from  liability  for  negligence,  and  be- 
ing capable  of  a  construction  which  will  render  it  legal, 
will  be  so  constnued  and  held  to  exclude  loss  or  dam- 
age so  arising. 

In  Trimble  v.  N.  Y.  Cent.  &  H.  R.  R.  Co.,  162  N.  Y., 
84  (1900),  this  identical  form  of  contract  (which  prob- 
ably is  in  use  on  all  New  York  Central  lines)  was  be- 
fore the  court.  In  that  case  it  appears  that  one  of 
the  rules  of  the  company  (rule  4)  provided: 

"  Small  cases  or  trunks  containing  merchan- 
dise will  be  carried  as  an  accommodation  to  com- 
mercial travelers,  and  may  be  checked  when  re- 
lease of  liability,  Form  220,  is  signed  in  consid- 
eration of  its  transportation  on  passenger  trains 
as  baggage.  In  case  personal  baggage  and  sam- 
ples are  contained  in  same  trunk,  a  release  must 
be  signed  for  samples,  and  agents  will  refuse  to 
check  the  same  unless  this  is  done." 


767 

The  release  (Form  220)  referred  to  absolves  the 
company  from  all  liability  for  loss,  detention,  or  dam- 
age to  the  trunk  or  its  contents.  But  in  that  case  it 
appeared  that  the  release  was  not  signed  and  the  sam- 
ple trunk  had  been  checked  as  baggage  with  knowledge, 
and  the  company  was  held  liable  for  the  loss  of  the 
sample  trunk  as  an  insurer. 

I  am  of  the  opinion  that  in  Illinois  the  effect  of  the 
release  in  question  will  not  relieve  the  carrier  of  sam- 
ple trunks  from  liability  for  negligence. 


WHETHER  A  FIRM  BUYING  SECOND  HAND  MACHINERY  OC- 
CASIONALLY MUST  TAKE  OUT  A  CITY  LICENSE  AS  A  SECOND 
HAND  DEALER. 

(Marshall  and  Huschart  Machinery  Co.,  Jan.  11,  1906.) 
"We  have  been  requested  by  the  Police  Depart- 
ment to  pay  an  annual  license  of  $50.00  under 
Sec.  No.  2027,  of  the  ordinance  of  this  city. 

We  are  dealers  in  machinery,  principally  new, 
but  do  buy  or  take  in  trade  desirable  second  hand 
machine  tools.  We,  however,  do  not  belong  in  the 
same  class  as  junk  dealers  and  pawn  dealers. 

Counsel  for  the  association  will  probably  be 
able  to  state  with  very  few  words  whether  it  is 
best  to  pay  the  license  fee,  or  refuse  until  actually 
compelled  to  do  by  proper  authority. ' ' 
The  Eevised  Code  of  Chicago  (1905),  Sec.  2027,  pro- 
vides : 

"The  mayor  may  grant  licenses  to  such  per- 
sons as  shall  produce  to  him  satisfactory  evidence 
of  good  character,  to  exercise  or  carry  on  the 
business    of   dealing  in    second   hand    furniture, 
clothes  or  other  articles  in  the  city." 
Sec.    2028   provides   for   an   annual  license   fee   of 
$50.00. 

Sec.  2030  provides: 

"No  person  shall  keep  a  place  for  the  purchase 
or  sale  of  second-hand  clothing,  second-hand 
household  goods,  second-hand  counters,  shelving, 


768 

showcases,  store  and  office  fixtures,  boilers,  en- 
gines, belting,  pulleys,  motors,  dynamos,  electrical 
apparatus,  machinery  or  other  second-hand  ar- 
ticle of  any  kind  or  description,  nor  shall  any 
person  trade,  barter,  deal  in,  or  carry  on  the 
business  of  dealing  in  any  such  second-hand  ar- 
ticles as  hereinbefore  described,  without  being 
specially  licensed  for  such  purpose;  and  any  li- 
cense issued  under  the  provisions  of  this  article 
shall  designate  the  house  or  place  in  which  the 
person  so  licensed  shall  carry  on  t^ie  business  for 
which  he  is  licensed;  and  such  business  shall  not 
be  carried  on  or  conducted  in  any  other  place  than 
that  designated  in  and  by  such  license.  No  per- 
son licensed  under  the  provisions  of  this  article1 
shall  be  permitted  to  solicit  business  in  any  of  the 
articles  named  herein  upon  any  street  or  public 
highway  in  the  city.  Any  person  violating  any 
of  the  provisions  of  this  section  shall  be  fined  not 
less  than  fifty  dollars  nor  more  than  two  hundred 
dollars  for  each  offense." 

Provision  is  also  made  for  record  of  purchases  to 
be  kept  and  for  reports  to  be  made  to  the  superin- 
tendent of  police. 

Sec.  2036  provides  for  licenses  for  keepers  of  junk 
shops. 

In  City  of  Chicago  v.  Reinschreiber,  121  111.  App., 
114  (June  24,  1905),  the  provisions  of  the  city  ordi- 
nance of  Chicago  entitled  Second-hand  Dealers  (Sec. 
1783  of  the  Code  of  1897  as  amended),  and  which  was 
of  substantially  the  same  import  as  the  provisions  of 
the  Code  of  Chicago  enacted  March  20,  1905,  was  be- 
fore the  court.  It  was  there  held  that  the  city  coun- 
cil had  no  power  to  enact  an  ordinance  requiring  one 
keeping  a  place  exclusively  for  the  purchase  and  sale 
of  new  and  second-hand  bottles  and  dealing  in  them  to 
be  licensed,  and  persons  who  deal  in  bottles  exclusively 
were  held  not  to  be  "junk  dealers"  or  keepers  of 
"second-hand  stores."  In  defining  a  junk  dealer  the 
court  said: 

"The  question  is,  then,  whether  the  business  of 


769 

appellee  is  such  as  to  bring  it  and  the  place  where 
it  is  conducted  within  the  definition  of  'second- 
hand and  junk  stores.'  A  junk  store  is  a  place 
where  'junk'  is  dealt  in.  Junk  is  defined  as 
'worn-out  and  discarded  material  in  general,  that 
may  be  turned  to  some  use;  especially  old  rope, 
chain,  iron,  copper,  parts  of  machinery,  and  bot- 
tles gathered  or  bought  up  by  tradesmen  called 
junk  dealers;  hence,  rubbish  of  any  kind;  odds 
and  ends.'  (Century  Dictionary.)  The  evidence 
shows  that  appellee's  business  cannot  be  properly 
described  as  that  of  a  junk  dealer.  He  buys  ol,d 
bottles,  to  be  sure,  as  well  as  new,  but  he  deals 
in  nothing  else.  He  is  not  a  buyer  or  seller  of  old 
and  worn-out  or  miscellaneous  materials.  016! 
bottles,  as  fit  for  use  as  when  new,  may  be  found 
in  Junk  shops,  but  are  not  by  themselves  properly 
definable  as  'junk,'  nor  can  persons  who  deal  in 
them  exclusively  properly  be  called  'junk  dealers.' 
Bottles  do  not  generally  wear  out,  and  are  capable 
of  use  unless  broken,  in  precisely  the  same  man- 
ner as  new  bottles.  They  are  less  properly  de- 
scribed as  'junk'  than  old  iron  or  copper  or  brass, 
which  are  sold  to  foundries  to  be  remelted.  Yet 
a  foundry  buying  up  old  iron  for  such  purpose 
could  scarcely  be  deemed  a  junk  shop.  In  Car- 
berry  v.  United  States,  116  Fed.  Rep.,  773,  774, 
it  was  held  that  '  old  bottles  capable  of  being  used 
as  bottles  are  not  junk  and  are  properly  assess- 
able as  bottles.'  In  City  of  Duluth  v.  Bloom,  55 
Minn.,  97,  100,  it  is  said  that  'every  junk  shop  is 
a  second-hand  store,  but  not  every  second-hand 
store  is  a  junk  shop.'  *  *  *  The  word  'junk,' 
which  is  of  nautical  origin,  originally  meant  old 
or  condemned  cable  and  cordage  cut  into  small 
pieces,  which,  when  untwisted,  were  used  for  vari- 
ous purposes  on  the  ship.  Hence,  the  word  after- 
ward came  to  mean  worn-out  or  discarded  ma- 
terial in  general,  that  still  may  be  turned  to  some 
use,  especially  old  rope,  chain,  iron,  copper,  parts 
of  machinery,  bottles,  etc.,  gathered  or  bought  up 


770 

by  persons  called  'junk  dealers.'  Although  old 
bottles  are  not  necessarily  'junk,'  yet,  if  they  were, 
one  who  buys  and  sells  them  only,  would  not  neces- 
sarily be  a  'junk  dealer.' 

Nor  is  appellee's  business  and  the  place  where 
it  is  conducted  properly  described  as  a  'second- 
hand store.'  In  Eastman  v.  City,  79  111.,  178-180, 
it  was  held  that  book  sellers  dealing  in  such  stock 
as  is  usually  kept  in  a  retail  book  store,  buying 
and  selling  second-hand  books  in  connection  with 
their  other  business,  would  be  unjustly  character- 
ized as  'dealers  in  second-hand  goods,'  and  are 
not  liable  to  penalties  imposed  against  such  deal- 
ers who  have  not  first  obtained  a  license  from  the 
city.  In  like  manner  bottles  which  are  as  sound 
and  unworn  as  the  day  they  were  made  do  not 
come  under  the  meaning  usually  attached  to 
'second-hand  goods,'  by  which  term  is  ordinarily 
meant  not  only  things  that  are  old  or  have  been 
used,  but  such  as  are  more  or  less  the  worse  for 
wear  and  use,  like  cast-off  clothing  or  old  and  dis- 
carded furniture.  In  City  of  Duluth  v.  Bloom, 
supra,  it  is  said  that  the  term  '  second-hand  store ' 
if  not  qualified  or  limited  would  include  any  store 
in  which  any  kind  of  second-hand  goods  are  dealt 
in,  such  as  second-hand  furniture  or  second-hand 
books. ' ' 

And  in  reference  to  second-hand  stores  the  court 
said: 

"In  the  most  literal  sense  it  would  be  a  misuse 
of  terms  to  call  a  place  of  business  a  second- 
hand store,  where  the  dealing  in  second-hand  ma- 
terial is  merely  an  incident  of  the  business,  not 
an  essential  part  of  it  nor  its  principal  purpose. 
It  follows  from  what  we  have  said  that  the  city 
council  had  no  power  to  enact  an  ordinance  re- 
quiring one  keeping  a  place  exclusive  for  the  pur- 
chase and  sale  of  new  and  second-hand  bottles,  and 
dealing  in  them,  to  be  specially  licensed. 

Appellee  introduced  in  evidence  certain  ordi- 
nances of  the  city  imposing  restrictions  upon  one, 


771 

who  is  a  'dealer  in  second-hand  articles  or  keeper 
of  a  junk  shop.'     These  ordinances,  however  ap- 
propriate for  the  kinds  of  business  to  which  they 
are  properly  applicable,  would  be  intolerable  if 
applied  to  a  business  such  as  appellee's." 
I  am  of  the  opinion  that  the  business  of  the  Marshall 
and  Huschart  Co.  as  stated,  cannot  be  said  to  be  that 
of  a  second-hand  dealer,  and  therefore  that  they  are 
not  subject  to  the  provisions  of  the  ordinance,  and  are 
under  no  liability  to  pay  the  license  fee  of  $50.00. 

NOTE: — See,  also,  the  similar  New  York  case  to  the  same  effect. 
City  of  New  York  v.  Vandewater,  99  N.  Y.  Supp.,  306  (June  8,  1906). — 
Ed. 


THE  EXTENT  OF  THE  LIABILITY  ON  PREMIUM  NOTES  OF  A 
RESIDENT  OF  ILLINOIS  INSURING  IN  MUTUAL  FIRE  INSUR- 
ANCE COMPANIES  OF  MISSOURI  AND  INDIANA. 

(Monmouth  Pottery  Co.,  January  13,  1906.) 

"We  are  contemplating  placing  a  line  of  insur- 
ance with  mutual  companies  situated  in  the  States 
of  Missouri  and  Indiana,  but  before  doing  so  would 
ask  that  you  please  let  us  have  legal  opinion  in 
regard  to  the  extent  of  the  liability  of  policy  holder 
in  such  companies. 

In  order  to  be  more  specific  we  beg  to  state  that 
in  order  to  secure  a  policy  it  will  be  necessary  for 
us  to  give  a  note  for  five  times  an  annual  pre- 
mium, which  will  cover  insurance  for  a  period  of 
five  years.  In  case  of  loss  on  policies  which  these 
mutual  companies  may  have  in  force,  can  each 
policy  holder  and  shareholder  be  held  liable  for 
anything  beyond  the  one  annual  premium,  or  can 
they  be  held  for  the  full  amount  of  the  note  given 
at  any  time  during  the  life  of  their  policy  or  can 
they  be  held  for  more  than  the  face  of  the  note? 
The  agreements  with  the  companies  specify  the 
face  of  the  note  as  the  limit,  but  what  we  want  is 
legal  opinion  in  regard  to  what  demands  the  state 
laws  would  make  on  such  policy  holders. 


772 

Also  in  case  such  companies  organized  under 
the  laws  of  a  foreign  state,  can  the  Illinois  laws 
be  made  to  hold,  and  have  any  effect  on  the  liabil- 
ity of  the  stockholder? 

We  would  appreciate  it  very  much  if  you  would 
kindly  let  us  hear  from  your  attorney  in  regard 
to  this  matter,  and  if  we  have  not  made  ourselves 
plain  we  would  appreciate  your  writing  for  further 
explanation." 

A  contract  by  a  resident  of  one  state  with  a  mutual 
fire  insurance  company  of  another  state,  whereby  the 
former  becomes  a  member  of  the  company,  and  agrees 
to  pay  assessment  pursuant  to  its  charter,  by-laws, 
etc.,  is  a  contract  in  the  state  where  the  company  is 
incorporated,  and  the  validity  of  the  assessment  is 
determined  by  the  laws  of  that  state. 

Warner  v.   Delbridge   &   Cameron   Co.,   110 

Mich.,  590,  595;  68  N.  W.,  283. 
Stevens  v.  Hein,  55  N.  Y.  Supp.,  491 ;  37  App. 

Div.,  542. 
The  laws  of  Missouri  provide : 

(1)  That  every  premium  note  shall  be  made 
payable  at  any  time  and  in  part  or  whole  as  the 
directors  may  deem  necessary  upon  assessment 
for  the  payment  of  losses,  expenses  and  other  lia- 
bilities of  the  company. 

* '  All  buildings  and  other  property,  real  and  per- 
sonal, insured  by  and  with  such  company,  together 
with  all  right,  title  and  interest  of  the  insured  to 
the  lands  on  which  such  buildings  are  situated, 
shall  be  pledged  to  such  company  and  the  com- 
pany shall  have  a  lien  thereon  until  the  aforesaid 
note  is  duly  paid: 

Provided,  that  the  maker  of  said  note  shall  as- 
sent to  such  lien  in  writing  upon  the  face  of  the 
same."  (Rev.  Stat.  Missouri  (1899),  Sees.  7958, 
7959.) 

(2)  The  assessment  to  cover  losses  shall  be 
"for  a  sum  upon  each  note  which  bears  the  same 
ratio  to  the  whole  amount  to  be  raised  by  the 
assessment,  that  the  full  sum  for  which  said  note 


773 

was  given  bears  to  the  full  amount  for  which  all 
the  notes  assessed  were  given."  And  if  any  as- 
sessment is  not  paid  within  thirty  days  the  whole 
amount  of  the  premium  note  may  be  sued  for  and 
recovered.  And  it  is  provided  that: 

"No  person  shall,  in  any  case,  be  liable  upon 
any  premium  note  on  account  of  any  and  all  claims 
and  assessments  upon  the  same  for  any  amount 
greater  than  the  face  of  such  note."  (Eev.  Stat. 
Missouri  (1899),  Sec,  7960.) 

The  laws  of  Indiana  in  reference  to  mutual  fire  com- 
panies provide  in  part: 

(1)  That  premium  notes  shall  be  payable  in 
whole  or  in  part  when,  on  any  assessment,  the 
directors    may   require    the    same.      (Rev.    Stat. 
Indiana  (1901),  Sees.  48883,  4894J.) 

(2)  ''If  any  member  shall  have  a  just  claim 
on  the  corporation,  founded  on  a  policy  issued  by 
it,  exceeding  the  amount  of  its  then  existing  funds, 
exclusive  of  deposit  notes  given  by  the  members, 
the  directors  shall  forthwith  assess  such  sums  as 
may  be  necessary  to  pay  the  same  upon  the  mem- 
bers, in  proportion  to  the  amount  of  their  pre- 
miums and  deposits,  severally,  for  seven  years; 
but  no  member  shall  be  liable  to  pay,  in  whole, 
more  than  the  amount  of  his  premium  and  deposit 
note."     (Revised  Statutes,  Indiana   (1901),  Sec. 
4884.) 

(3)  Every  policy  shall  constitute  a  lien  on  the 
interest*  of  the  person  insured  in  the  building  so 
insured  and  in  the  land  upon  which  it  is  situated 
for  securing  the  payment  of  the  deposit  note  for 
the  sums  assessed.    But  upon  the  sale  of  the  prop- 
erty of  the  bona  fide  purchaser  the  lien  ceases  as 
to  all  losses  thereafter  unless  the  policy  is  con- 
tinued by  the  purchaser.      (Rev.   Stat.,  Indiana 
(1901),  Sec,  4889.) 

It  is  also  to  be  noted  that  the  laws  of  Indiana  (Sec. 
4883  Rev.  Stat.,  Indiana  (1901),  provide  that  a  person 
insuring  can  pay  a  definite  consideration  in  lieu  of 
giving  a  premium  note,  and  such  a  policy  holder  who 


774 

has  paid  his  premiums  in  cash  is  entitled  to  have  as- 
sessments made  on  premium  notes  to  pay  his  losses. 
Clark  v.  Manufacturers  Co.,  130  Ind.,  332. 

So,  too,  premium  notes  can  only  be  collected  when 
it  is  shown  that  there  is  a  liability  thereon  according 
to  the  terms  of  the  contract. 

Embree  v.  Shideler,  36  Ind.,  423. 
Downs  v.  Hammond,  47  Ind.,  131. 
Manlore  v.  Burger,  38  Ind.,  211. 

And  assessments  cannot  be  made  upon  premium 
notes  unless  the  necessity  therefor  properly  and  legally 
arises. 

Pac.  Mut.  Ins.  Co.  v.  Guse,  49  Mo.,  329. 

Any  notice  of  an  assessment  made  upon  premium 
notes  must  be  definite  and  certain  in  its  terms.  Bangs 
v.  Duckin field,  18  N.  Y.,  592;  Bangs  v.  Mclntosh,  23 
Barb.,  591 ;  but  in  American  Guaranty  Fund  Mut.  Ins. 
Co.  v.  Mattson,  100  Mo.  App.,  316 ;  73  S.  W.,  365  (1903), 
it  was  held  that  an  order  and  notice  of  assessment 
made  by  the  directors  of  a  company,  reciting  the  gross 
amount  of  notes  subject  to  assessment,  and  the 
amount  of  adjusted  losses  and  of  unpaid  expenses  were 
sufficient  without  specifying  such  matter  in  a  detailed 
schedule. 

I  am  not  informed  as  to  the  terms  of  the  policy,  but 
I  assume  that  a  member  agrees  to  pay  assessments 
pursuant  to  the  provisions  of  the  charter,  by-laws,  etc. 
In  such  cases  the  contracts  of  insurance,  and  the  lia- 
bility on  the  premium  notes  will  be  determined  ac- 
cording to  the  laws  of  Indiana  and  Missouri.  Under 
the  statutes  of  those  states,  above  cited,  a  member  is 
not  liable  in  any  event  for  more  than  the  face  amount 
of  his  notes. 

I  assume  also  that  these  companies  have  complied 
with  the  insurance  laws  of  Illinois  in  order  to  do  busi- 
ness in  this  state.  In  Rose  v.  Kitnberly  &  Clark  Co., 
89  Wis.,  545,  62  N.  W.,  526,  27  L.  E.  A.,  556,  where 
the  law  prohibits  unauthorized  foreign  companies  to 
take  risk  or  transact  insurance  business  within  the 
state  directly  or  indirectly,  it  was  held  that  assess- 
ments on  a  policy  holder  could  not  be  recovered  if  the 
company  has  not  complied  with  the  law,  although  the 


775 

contract  was  executed  outside  the  state.  This  is  also 
the  law  in  Illinois,  and  in  Buell  v.  Breese  Mill  &  Grain 
Co.,  65  111.  App.,  271  (1896),  it  was  held  that  a  mutual 
fire  insurance  company  of  another  state  which  issued 
a  policy  within  this  state,  without  complying  with  the 
statute  relating  to  foreign  insurance  companies,  can- 
not maintain  an  action  to  collect  assessments  in  the 
courts  of  this  state. 

I  am  also  of  the  opinion  that  no  Illinois  statutory 
liability  of  stockholders  will  be  incurred.  In  Pinney 
v.  Nelson,  183  U.  S.,  144  (1901),  it  was  held  that  Cali- 
fornia stockholders  in  a  Colorado  corporation  whose 
charter  specified  that  one  purpose  of  the  incorpora- 
tion was  the  transaction  of  business  by  the  corpora- 
tion in  California,  must  be  deemed  to  have  contracted 
with  reference  to  the  provisions  of  the  California  law 
imposing  the  same  personal  liability  upon  stockholders 
of  foreign  corporations  doing  business  within  the  state 
as  upon  stockholders  in  domestic  corporations,  and 
were  bound  thereby,  so  far  at  least  as  such  liability 
arose  from  the  corporate  business  carried  on  in  Cali- 
fornia. But  that  rule  is  not  applicable  to  the  present 
case. 

I  am  of  opinion,  therefore,  that  the  Monmouth  Pot- 
tery Company  will  be  under  no  other  liability  than  as 
above  stated. 


AS  TO  WHETHER  UNDER  THE  CHICAGO  CITY  ORDINANCES 
A  DUTY  IS  IMPOSED  UPON  THE  OWNER  OR  UPON  THE 
LESSEE  OP  PROPERTY  TO  ERECT  STANDPIPES ;  AND  AS  TO 
WHETHER  UNDER  THE  TERMS  OF  A  CERTAIN  LEASE  THE 
DUTY  IS  UPON  THE  LANDLORD  OR  UPON  THE  TENANT. 

(A.  C.  McClurg  &  Co.,  Jan.  13,  1906.) 
"We  rent  a  large  building  within  the  loop,  and 
have  occupied  same  since  June,  1899.  We  have 
recently  been  served  with  notice  by  the  agents  of 
our  landlord  with  regard  to  the  installation  by  us 
of  interior  standpipes  to  comply  with  the  late 
ordinance  requiring  interior  standpipes  in  build- 
ings over  100  feet  high. 


776 

The  building  we  occupy  was  commenced  about 
September  1st,  1898,  and  completed  about  June 
1,  1899,  and  we  believe  that  in  March,  1898,  there 
was  an  ordinance  passed  substantially  the  same 
as  the  recent  ordinance  requiring  interior  stand- 
pipes  in  buildings  of  like  character. 

We  presume  you  are  familiar  with  the  decision 
of  the  Supreme  Court  of  this  state  contained  in 
Illinois  Reports  192,  page  601,  in  which  it  was  de- 
termined under  the  Fire-escape  act  of  1897  that 
the  duty  of  equipping  buildings  with  fire  escapes 
rested  primarily  upon  the  owner  of  the  building. 
Now  if  there  was,  as  we  believe,  such  ordinance 
passed  in  the  early  part  of  1898  it  seems  to  us  that 
our  landlord  should  have  complied  with  this  ordi- 
nance requiring  interior  standpipes  at  time  build- 
ing was  erected.  We  should,  therefore,  like  to 
know  whether  it  was  not  the  duty  of  the  landlord 
to  then  equip  the  building  with  interior  stand- 
pipes,  and  whether  this  duty  does  not  still  fall  on 
him  under  the  ordinance  of  1905  rather  than  on 
the  tenant. 

The  clause  in  our  lease  cited  by  the  agents  of 
our  landlord  imposing  this  duty  on  us  reads  as 
follows : 

'Further,  the  lessee  shall  hold  the  lessor,  his 
heirs,  legal  representatives  and  assigns,  forever 
harmless  from  any  penalty  or  damages  charged  or 
imposed  for  a  violation  of  all  or  any  Muncipal, 
County,  State  and  other  laws  affecting  the  prem- 
ises hereby  demised  and  the  sidewalk,  street  and 
alley  adjacent  thereto,  now  or  hereafter  in  force, 
if  such  violation  or  delinquency  be  ascribable  to 
the  lessee,  or  to  any  sub-lessee  or  other  tenant  or 
to  any  person  whomsoever  claiming  through  or 
under  the  lessee.' 

We  would  like  to  have  the  opinion  of  Mr.  Levy 
Mayer,  attorney  for  your  association,  upon  these 
points  as  quickly  as  possible." 
Section  680  of  the  Revised  Code  of  Chicago  of  1905 
provides : 

"Inside  of  every  building  of  any  of  the  classes 


777 

hereinbefore  defined  which  is  over  one  hundred 
feet  in  height  and  inside  every  building  over  three 
stories  in  height  which  is  occupied  exclusively  or 
chiefly  for  hotel  or  lodging  house  purposes,  there 
shall  be  one  four  inch  standpipe,  extending  from 
pump  to  roof,  also  connection  on  first  floor  with 
two-way  Siamese  connection  for  fire  department 
and  check  valve  against  pump;  one  hose  connec- 
tion on  each  floor  and  roof,  with  fire  department 
thread  and  enough  hose  attached  to   reach  any 
point  of  the  floor ;  such  hose  shall  be  subject  to  the 
approval  of  the  fire  marshal  and  shall  at  all  times 
be  connected  either  with  a  pump  or  with  a  tank 
upon  the  roof  of  such  building,  in  such  a  manner 
as  to  be  capable  of  furnishing  a  good  stream  of 
water  sufficient  for  the  use  of  the  fire  department 
and  at  a  pressure  of  not  less  than  fifty  pounds  to 
the  square  inch.    The  owner,  agent,  occupant,  or 
person  in  possession,  charge,  or  control  of  any 
such  building  herein  required  by  the  provisions  of 
this  section  to  be  equipped  with  a  standpipe,  who 
shall  refuse,  neglect,  or  fail  to  have  such  stand- 
pipe  so  connected  as  to  be  at  all  times  ready  and 
capable  of  furnishing  a  stream  of  water  at  a  pres- 
sure of  not  less  than  fifty  pounds  to  the  square 
inch,  shall  be  fined  not  less  than  fifty  dollars  nor 
more  than  two  hundred  dollars  for  each  offense." 
It  will  be  noted  that  under  this  ordinance  no  specific 
duty  to  erect  a  standpipe  is  imposed  upon  any  particu- 
lar person  or  class  of  persons.    The  ordinance  says: 
"Every  building  shall  be  equipped,"  etc.    A  penalty 
is  provided  against  "the  owner,  agent,  occupant  or 
person  in  possession,  charge  or  control"  of  the  build- 
ing who  fails  to  comply  with  the  provisions  of  the  ordi- 
nance.   It  is  the  settled  law  that  unless  a  duty  is  im- 
posed upon  some  person  to  comply  with  the  ordinance 
a  penalty  for  failure  to  comply  by  a  person  upon  whom 
no  duty  rests  cannot  be  enforced. 

U.  S.  v.  Mitchell,  58  Fed.,  993. 
Maker  v.  Slater,  23  Alt.,  63  (R.  I.). 
Behlers  v.  Daniels,  31  Alt.,  582  (R.  L). 
Chicago  v.  Rumpff,  45  111.,  90. 


778 

Thomas  v.  People,  31  Pac.,  348  (Colo.). 
Anderson  v.  State,  11  S.  W.,  33  (Tex.). 
Belk  v.  People,  125  111.,  584. 
Comm.  v.  Watson,  97  Mass.,  562. 
But   in   this   case   a  penalty  is   expressly  directed 
against  not  only  the  owner,  but  the  tenant,  etc.,  and 
from  it  in  my  opinion  the  court  will  construe  the  ex- 
istence of  a  duty.    In  other  words  a  tenant  has  no  legal 
right  to  occupy  a  building  which  does  not  comply  with 
the  ordinance,  and  if  he  does  he  will  be  subject  to  its 
penalties.    This  rule  is  fairly  deducible  from  decisions 
like  the  following: 

Arms  v.  Ayer,  192  111.,  601. 
Landgraf  v.  Kuh,  188  111.,  484. 
McCulloch  v.  Ayer,  96  Fed.,  178. 
Farley  v.  Speed,  decision  of  Judge  Kohlsaat 
rendered    January    19,    1904,    and    unre- 
ported,  which  modifies  his  prior  decision  in 
McCulloch  v.  Ayer. 

In  the  Building  Ordinance  of  March  28,  1898  (which 
was  in  force  from  and  after  its  passage,  Sec.  210 
Council  Proceedings,  1897-98,  pages  2067),  there  was 
neither  duty  nor  penalty  provided  and  under  that  ordi- 
nance if  it  were  now  in  force,  in  my  opinion  there 
would  be  no  liability  on  the  part  of  A.  C.  McClurg  & 
Co.  That  old  ordinance  provided  this: 

''Inside  of  all  buildings  over  100  feet  in  height, 
there  shall  be  one  4  inch  iron  standpipe,  extend- 
ing from  pump  to  roof,  also  connection  for  Fire 
Department  and  check  valve  against  pump;  two 
hose  connections  on  each  floor  and  roof,  with  Fire 
Department  thread  and  enough  hose  attached  to 
reach  any  point  of  the  floor. 

There  will  be  a  two-way  automatic  Siamese  at 
the  bottom  of  the  standpipe  so  that  two  steam  fire 
engines  can  be  attached  to  it  without  interfering 
with  each  other.  Said  Siamese  must  be  within 
easy  reaching  distance  from  the  sidewalk  and  to 
be  securely  anchored  to  the  wall  of  the  building. 

All  the  anchors  for  the  top  of  standpipe  and  lad- 
ders must  pass  through  the  wall  and  bolt  on  the 
inside  of  same." 


779 

A  penalty  was  imposed  by  that  ordinance  of  March 
28,  1898  (Sec.  216),  upon  any  person,  company  or  cor- 
poration who  violates,  omits,  neglects  or  refuses  to 
comply  with  the  provisions  of  the  ordinance.  But  no- 
where is  the  duty  specifically  laid  upon  the  owner  or 
lessee  to  construct  the  standpipes  required  by  the  ordi- 
nance. (See  the  cases  cited,  supra.)  • 

Sec.  214  of  the  Building  Ordinance  of  March  28, 1898, 
(in  force  when  the  building  in  question  was  erected), 
also  provided  that  no  wall,  structure,  building  or  part 
thereof  hereafter  be  built,  constructed,  altered  or  re- 
paired within  the  fire  limits  except  in  conformity  with 
the  provisions  of  this  ordinance. 

I  am  of  the  opinion  that  the  clause  of  the  lease  quoted 
will  not  place  upon  the  lessee  the  expense  of  installing 
the  standpipes.  Such  a  provision  requiring  standpipes 
was  in  the  ordinance  when  the  building  was  erected; 
and  as  between  the  landlord  and  tenant,  I  am  of  the 
opinion  that  it  was  the  duty  of  the  landlord  to  equip 
the  building  as  required  by  the  building  ordinance. 

In  McAlpin  v.  Powell,  70  N.  Y.,  126  (1877),  it  was 
held  that  the  duty  of  keeping  in  repair  fire  escapes  as 
between  the  landlord  and  tenant  was  upon  the  land- 
lord. The  court  held  that  this  did  not  come  within  the 
range  of  ordinary  repairs  which  a  tenant,  in  the  ab- 
sence of  an  agreement  to  the  contrary,  is  required  to 
make. 

In  this  connection  it  is  to  be  noted  that  section  737 
of  the  Building  Code  of  1905  provides : 

"  Whenever,  in  the  opinion  of  the  commissioner 
of  buildings,  it  shall  be  necessary  to  tear  down, 
alter,  repair  or  rebuild  any  building  or  portion  of 
any  building  which  is  dangerous,  defective  or  un- 
safe, or  which  is  reported  to  the  said  com- 
missioner by  the  commissioner  of  health  to 
be  unfit  for  human  occupancy,  or  which  has 
been  built  in  violation  of  any  of  the  pro- 
visions of  this  chapter  or  of  any  ordinance 
regulating  the  construction  of  buildings  hereafter 
passed,  said  commissioner  of  buildings  shall  cause 
such  building  or  such  portion  thereof  to  be  torn 
down,  altered,  repaired  or  rebuilt  or  such  work  to 


780 

be  done  thereon  as  he  may  deem  necessary  to  ren- 
der such  building,  or  such  portion  thereof,  safe  or 
fit  for  human  occupancy,  and  the  expenses  thereof 
shall  be  recoverable  from  the  owner  or  oivners  of 
such  building  by  any  proceeding  that  may  be 
deemed  appropriate." 

Under  this  provision  the  expense  is  to  be  recovered 
from  the  owner. 

I  have  been  able  to  find  no  reported  decision  upon 
the  precise  question  submitted.  Though  A.  C.  McClurg 
&  Co.  will  be  liable,  if  prosecuted,  to  the  penalty  pre- 
scribed in  the  ordinance  (it  being  optional  with  the  city 
under  the  ordinance  whom  to  proceed  against),  yet  I 
am  inclined  to  the  opinion  that  the  court  in  an  ap- 
propriate proceeding  by  the  tenant  against  the  owner, 
will  hold  that  the  latter  is  "primarily"  liable  (see 
Arms  v.  Ayer,  192  111.,  601,  616,  and  other  cases,  supra) 
to  instal  the  standpipe  at  his  (the  owner's)  cost.  This 
opinion  is  based  upon  the  provisions  of  the  lease  in 
question  which  has  been  submitted  to  me. 

NOTE: — In  Kiernan  v.  Bush  Temple  of  Music  Company,  229  111., 
494  (Oct.  23,  1907),  it  is  held  that  a  lessee  of  a  theater  building  is 
presumed  to  know,  as  well  as  the  lessor,  the  provisions  of  existing 
building  ordinances,  and  if  he  is  not  ignorant  as  to  the  construction  of 
the  building,  and  there  is  no  misrepresentation  by  the  lessor  in  that 
regard,  the  fact  that  the  city,  under  its  police  power,  interrupted  the 
lessee's  possession  because  of  a  violation  of  the  building  ordinances  can- 
not be  regarded  as  a  breach  of  the  lessor 's  implied  covenant  of  quiet 
enjoyment. — Ed. 


EIGHTS  OF  A  DEPOSITOR  OF  PAPER  FOR  COLLECTION  WHERE 
THE  PAPER  HAS  BEEN  SENT  BY  THE  FORWARDING  BANK  TO 
ANOTHER  BANK  THAN  THE  BANK  ON  WHICH  IT  IS  DRAWN, 
AND  THE  COLLECTING  BANK  FAILS  BEFORE  THE  PROCEEDS 
OF  THE  PAPER  ARE  OBTAINED. 

(American  Tag  Company,  Jan.  13,  1906.) 
"An  out  of  town  customer,  in  payment  for  goods 
purchased,  sent  us  his  check  on  his  local  bank 
which  we  deposited  with  our  bank  here  in  the  regu- 
lar course  of  business.  Our  bank  instead  of  send- 
ing the  check  for  collection  direct  to  the  bank  on 


781 

which  it  was  drawn,  sent  it  to  another  bank  in  the 
same  city  and  received  in  payment  their  bank's 
draft  on  an  eastern  bank.  This  draft  in  turn  was 
sent  through  the  regular  channels  to  the  bank  on 
which  it  was  drawn  in  the  east  and  they  have  re- 
turned same  to  our  bank  with  the  notation  'No 
funds,'  and  we  have  since  learned  that  the  collect- 
ing bank  is  bankrupt. 

The  question  is  who  is  to  bear  the  loss!  Our 
bank  asks  us  to  reimburse  them,  claiming  that  they 
act  as  our  agent  when  collecting  checks  and  that 
they  have  never  actually  received  the  money.  If 
we  accept  their  version  what  is  our  recourse?  If 
our  bank  returned  to  us  the  original  check  which 
we  deposited,  we  could  get  the  money  on  it. 

We  should  like  to  know  whether  or  not  our 
bank's  position  is  the  correct  one.  Had  our  bank 
sent  the  check  for  collection  to  the  bank  on  which 
it  was  drawn  and  that  bank  had  failed,  we  would 
be  responsible,  but  when  they  elect  to  send  it  to 
another  bank  to  collect  from  the  bank  on  which 
it  was  drawn,  it  would  seem  like  an  entirely  dif- 
ferent matter." 

In  my  opinion  of  March  21, 1905,  for  the  Studebaker 
Mfg.  Co.  I  discussed  the  liability  of  the  assignee  of  an 
insolvent  collecting  bank  as  a  trustee  of  the  proceeds 
of  notes  sent  to  it  for  collection,  where  the  bank  failed 
after  having  made  the  collection.  And  in  my  opinion 
of  March  22,  1905,  for  the  Beggs  Mfg.  Co.,  I  discussed 
the  liability  of  the  forwarding  bank  for  proceeds  of  a 
collection  which  has  been  forwarded  for  collection  to 
the  bank  on  which  the  check  was  drawn,  when  the  col- 
lecting bank  became  insolvent  before  funds  were  re- 
ceived from  the  collection.  To  these  opinions  I  refer. 
As  a  general  rule,  it  is  held  that  when  a  forwarding 
bank  sends  a  check  for  collection  to  the  bank  on  which 
it  is  drawn,  the  forwarding  bank  is  negligent  in  so 
doing,  and  will  be  liable  for  any  default  of  the  collect- 
ing bank,  and  must  respond  to  the  depositor  for  any 
loss  accruing. 

Bank  v.  Goodman,  109  Pa.  St.,  422. 
Farwell  v.  Curtis,  7  Bissell,  160. 


782 

Bartel  v.  Bank,  95  Ga.,  277. 

Anderson  v.  Rogers,  53  Kansas,  542. 

Door  Co.  v.  Bank,  76  Minn.,  36. 

Am.  Exch.  Nat'l  Bank  v.  Bank,  71  Mo.  App., 

451. 
Western  Wheeled  Scraper  Co.  v.  Sadilek,  50 

Neb.,  105 ;  69  N.  W.,  765. 

Custom  and  usage  may  perhaps  in  some  cases  re- 
lieve the  forwarding  bank  from  this  negligence. 

Karshow  v.  Todd,  34  Oregon,  274. 
In  Illinois  if  the  forwarding  bank  sends  the  check 
for  collection  to  another  bank  in  the  same  town  as  the 
bank  upon  which  the  check  is  drawn,  as  was  done  in 
this  case,  and  exercises  reasonable  care  in  so  doing,  it 
will  not  be  liable  for  any  loss  accruing  from  the  de- 
faults of  the  collecting  bank.  The  collecting  bank  then 
becomes  the  agent  of  the  depositor  for  collection. 

Wilson  v.  Carlinville  Nat'l  Bank,  187  111.,  222 

(1900). 
Waterloo  Milling  Co.  v.  Kuenster,  158  111.,  259 

(1895). 
Drover's  Nat'l  Bank  v.  Provision  Co.,  117  111., 

100  (1886). 
Aetna  Ins.  Co.  v.  Alton  City  Bank,  25  111.,  243 

(1861). 

Under  the  facts  stated,  I  am  of  the  opinion  that  the 
American  Tag  Co.  must  suffer  the  loss,  and  the  bank 
is  entitled  to  be  reimbursed.  The  American  Tag  Co. 
can,  however,  file  its  claim  as  a  creditor  against  the  in- 
solvent collecting  bank.  I  assume  that  the  collecting 
bank  presented  the  check  to  the  bank  on  which  it  was 
drawn,  and  that  the  latter  bank  paid  the  amount  of  the 
check  to  the  collecting  bank.  No  doubt  the  bank  upon 
which  the  check  was  drawn  charged  the  amount  of  the 
check  to  the  account  of  the  drawer,  and  returned  the 
check  to  him  in  due  course. 


783 


VALIDITY  OF  UNRECORDED  MORTGAGE  AGAINST  A  TRUSTEE  IN 
BANKRUPTCY. 

(Hartman  Furniture  Company,  January  15,  1906.) 
"We  wish  you  would  please  advise  us  through 
the  association's  attorney  if,  where  a  chattel  mort- 
gage exists  between  two  parties,  that  is  unre- 
corded or  expired  as  the  case  may  be.  if  bank- 
ruptcy proceedings  where  the  mortgage  has  due 
notice  as  other  creditors,  if  such  bankruptcy  dis- 
charge bars  the  mortgagee  from  foreclosure  of 
his  mortgage.  No  judgment  against  the  mort- 
gagee exists,  but  a  judgment  note  and  chattel 
mortgage  of  instalment  promises  to  pay  for  house- 
hold chattels  used  in  common  by  members  of  the 
family. ' ' 

Sec.  1,  Chap.  95,  Rev.  Stat.  of  Illinois  provides : 

"Section  1.  Be  it  enacted  by  the  People  of  the 
State  of  Illinois,  represented  in  the  General  As- 
sembly, that  no  mortgage  trust  deed  or  other  con- 
veyance of  personal  property  having  the  effect  of 
a  mortgage  or  lien  upon  such  property  shall  be 
valid  as  against  the  rights  and  interests  of  any 
third  person,  unless  possession  thereof  shall  be 
delivered  to  and  remain  with  the  grantee,  or  the 
instrument  shall  provide  for  the  possession  of  the 
property  to  remain  with  the  grantor;  and  the  in- 
strument is  acknowledged  and  recorded  as  here- 
inafter directed ;  and  every  such  instrument  shall, 
for  the  purpose  of  this  act,  be  deemed  a  chattel 
mortgage. ' ' 

Vol.  2,  S.  &  C.  Eev.  Stat.,  pp.  2743-4. 

Sees.  2  and  3  provide  for  the  acknowledgment  of 
the  mortgage  before  a  justice  of  the  peace. 

Section  4  relates  to  the  recording  of  the  mortgage. 

In  Sumner  v.  McKee,  89  111.,  127,  132,  the  court  con- 
strued the  act  in  question  and  said : 

"Who  were  meant  by  l third  parties,'  as  that 
term  is  used  in  the  statute  f  Can  it  mean  any  other 
than  creditors  and  subsequent  incumbrances  ?  We 
understand  the  law  to  be,  that  a  chattel  mortgage 


784 

is  only  void  as  to  third  persons  if  possession  is  not 
taken  on  maturity  of  the  note  it  was  given  to 
secure,  but  we  have  never  understood  that  the 
widow,  heir,  or  administrator  of  a  mortgagor,  was 
such  'third  person.'  They  stand  in  the  shoes  of 
the  deceased,  and  are  his  representatives,  and 
concluded  by  all  lawful  acts  and  contracts  he  may 
have  entered  into  or  performed." 
And  in  Blatchford  v.  Boyden,  122  111.,  657,  668,  the 

court  said : 

"Under  a  chattel  mortgage  act  the  recording 
of  a  chattel  mortgage  is  as  essential  to  its  valid- 
ity, as  against  third  persons,  as  any  other  element 
entering  into  the  making  of  a  valid  chattel  mort- 
gage. It  is  a  valid  lien  only  from  the  time  of  its 
being  filed  for  record,  even  as  against  purchasers 
and  creditors  with  actual  notice." 
In  Union  Trust  Co.  v.  Trumbull,  137  111.,  146,  180, 

the  court  said: 

"There  is  no  mode  under  our  law,  except  by 
chattel  mortgage  duly  acknowledged  and  recorded, 
by  which  the  owners  of  personal  property  retain- 
ing its  possession  can  give  another  a  lien  upon 
it  that  can  be  enforced  as  against  creditors  and 
subsequent  purchasers.  But  by  'creditors'  is 
meant,  not  general  creditors,  or  creditors,  at  large, 
and  only  such  creditors  as  are  armed  with  an  exe- 
cution or  writ  of  attachment,  or  other  process  of 
court,  are  regarded  as  'creditors'  in  the  sense 
that  they  are  authorized  to  impeach  a  convey- 
ance or  transfer  of  property  by  their  debtors  for 
fraud,  or  question  the  validity  of  an  equitable  lien 
on  personal  property  that  is  good  as  against  such 
debtors  themselves,  and  their  heirs,  executors,  ad- 
ministrators and  voluntary  assignees." 
And  in  Allcock  v.  Loy,  100  111.  App.,  573,  575,  the 

court  said: 

"The  mortgage  was  a  valid  mortgage  as  be- 
tween appellant  and  the  mortgagor,  and  as  be- 
tween them  the  failure  of  the  justice  to  enter  the 
affidavit  of  extension  on  his  docket,  was  wholly 
immaterial.  The  requirements  of  sections  1,  2,  3 


785 

and  4  of  the  chattel  mortgage  act,  apply  only  as 
to  interested  third  persons,  and  do  not  in 
any  manner  affect  the  status  of  the  parties 
to  the  instrument.  The  third  person  that 
may  avail  of  the  statute  must  have  an 
interest  in  the  property,  such  as  that  of 
subsequent  purchaser,  subsequent  incumbrancer, 
lienor,  judgment  creditor,  or  an  officer,  bailiff  or 
custodian  in  possession  by  virtue  of  a  valid  writ, 
execution  or  warrant." 
See,  also : 

Gilbert  v.  Cash  Register  Co.,  176  111.,  288. 
Clark  v.  Woodruff,  100  111.  App.,  18. 
The  question  remains  as  to  whether  a  trustee  in 
bankruptcy  is  a  third  party  within  the  meaning  of  the 
statute. 

The  Bankruptcy  Act  provides  (Sec.  67a) : 

"Claims  which  for  want  of  record  or  for  other 
reasons  would  not  have  been  valid  liens  as  against 
the  claims  of  the  cerditors  of  the  bankrupt  shall 
not  be  liens  against  his  estate." 
Sub'd.  d.  provides: 

"Liens  given  or  accepted  in  good  faith  and  nof 
in  contemplation  of  or  in  fraud  upon  this  act,  and 
for  a  present  consideration  which  have  been  re- 
corded according  to  law,  if  record  thereof  was 
necessary  in  order  to  impart  notice,  shall  not  be 
affected  by  this  act." 
Section  70a  provides : 

"The  trustee  of  the  estate  of  a  bankrupt,  upon 
his  appointment  and  qualification,  and  his  suc- 
cessor or  successors,  if  he  shall  have  one  or  more, 
upon  his  or  their  appointment  and  qualification, 
shall  in  turn  be  vested  by  operation  of  law  with 
the  title  of  the  bankrupt,  as  of  the  date  he  was 
adjudged  a  bankrupt,  except  in  so  far  as  it  is  to 
property  which  is  exempt  to  all.  * 

Property  transferred  by  him  in  fraud  of  his 
creditors,  *  :  "  property  which  prior  to  the  filing 
of  the  petition  he  could  by  any  means  have  trans- 
ferred or  which  might  have  been  levied  upon  and 
sold  under  judicial  process  against  him." 


786 

In  re  Rogers,  125  Fed.,  169,  the  Court  of  Appeals 
for  this  circuit  (7th  Cir.),  passed  upon  the  validity  of 
certain  warehouse  receipts  which  were  valid  between 
the  parties,  but  were  void  as  against  creditors  be- 
cause there  was  no  visible  change  of  possession.  The 
court  refers  to  the  Illinois  law  and  quotes  from  Union 
Trust  Co.  v.  Trumbull,  137  111.,  146,  as  follows : 

"There  is  no  mode  under  our  law,  except  by 
chattel  mortgage  duly  acknowledged  and  recorded, 
by  which  the  owners  of  personal  property,  retain- 
ing its  possession,  can  give  another  a  lien  upon 
it  that  can  be  enforced  as  against  creditors  and 
subsequent  purchasers." 
The  court  then  concludes : 

"We  are  therefore  brought  to  the  question 
whether,  under  the  bankruptcy  law,  the  trustee 
takes  solely  in  the  right  of  the  bankrupt,  or 
whether  he  also  represents  the  rights  which  cred- 
itors have,  and  the  authority  to  enforce  them; 
whether  the  petition  in  bankruptcy  is  merely  the 
appropriation  by  the  bankrupt  of  his  property  to 
his  creditors,  or  an  assertion  in  behalf  of  cred- 
itors of  rights,  which  they  had  independently  of 
the  bankrupt,  and  which  he  himself  could  not  as- 
sert. Notwithstanding  some  loose  expressions  in 
the  decisions  upon  this  subject,  we  are  satisfied, 
from  a  careful  scrutiny  of  the  act  that  the  filing 
of  the  petition  is  something  more  than  the  dedica- 
tion of  the  bankrupt  of  his  property  to  the  pay- 
ment of  his  debts;  that  the  trustee  is  not  only 
invested  with  the  title  of  the  property,  but  since, 
after  the  filing  of  the  petition,  the  creditors  are 
powerless  to  pursue  and  enforce  their  rights,  the 
trustee  is  vested  with  their  rights  of  action  with 
respect  to  all  property  of  the  bankrupt  trans- 
ferred by  him  or  incumbered  by  him  in  fraud  of 
his  creditors,  and  may  assail,  in  behalf  of  the 
creditors,  all  such  transfers  and  incumbrances  to 
the  same  extent  that  creditors  could  have  done 
had  no  petition  been  filed.  The  filing  of  the  peti- 
tion followed  by  seizure  and  by  adjudication  in' 
bankruptcy,  is  a  seizure  of  the  property  by  the 


787 

law  for  the  benefit  of  creditors,  and  an  appropria- 
tion of  it  to  the  payment  of  the  debt  of  the  bank- 
rupt. It  is  a  seizure  of  the  property  by  legal  pro- 
cess, equal  in  rank  to  and  of  the  same  force  and 
effect  as  by  execution  or  attachment.  This  has 
been  held  by  various  courts  of  appeals  in  which 
decisions  we  fully  concur. 

In  re  Pekin  Plow  Company,  50  C.  C.  A.,  257; 
112  Fed.,  308;  In  re  Garcewich,  53  C.  C.  A.,  510; 
115  Fed.,  87.  It  is  said  by  the  Supreme  Court  in 
Mueller  v.  Nugent,  184  IT.  S.,  14;  122  Sup.  Ct., 
275;  46  L.  Ed.,  405:  'It  is  as  true  of  the  present 
law  as  it  was  of  that  of  1867  that  the  filing  of  the 
petition  is  a  caveat  to  all  the  world,  and  in  fact 
an  attachment  and  injunction.'  We  have  assumed 
that  the  bank  and  H.  W.  Rogers  &  Bro.  are  bona 
fide  holders  for  value,  and  without  notice,  of  these 
warehouse  receipts,  giving  therefor  a  full  con- 
sideration. As  against  the  bankrupt  they  would 
be  entitled  to  protection,  and  would  be  held  to 
have  the  title  to  the  property;  but,  the  issue  of 
these  warrants,  being  constructively  fraudulent 
as  to  creditors  of  the  bankrupt,  their  right  must 
be  held  subject  to  the  claims  of  the  creditors. 
These  warrants  are  not  commercial  paper,  and 
are  not  protected  by  the  law  governing  that  class 
of  instruments." 
The  case  was  reversed  on  appeal  (198  U.  S.,  280), 

but  solely  upon  a  question  of  jurisdiction. 

In  Chesapeake  Shoe  Co.  v.  Seldner,  122  Fed.,  593 

(C.  C.  A.,  4th  Cir.),  the  court  reviews  the  authorities, 

saying : 

' '  Under  the  bankrupt  act  the  filing  of  a  petition 
in  bankruptcy  is  in  effect  an  attachment  levied  in 
behalf  of  all  the  bankrupt's  creditors.  In  Inter- 
national Bank  v.  Sherman,  101  U.  S.,  403,  25  L. 
Ed.,  866,  decided  under  the  act  of  March  2,  1867, 
14  Stat.,  51,  c.  176,  in  which  title  was  asserted  in 
opposition  to  the  assignee  to  property  transferred 
by  the  bankrupt  after  the  institution  of  bank- 
ruptcy proceedings,  it  was  said:  'The  filing  of 
the  petition  was  a  caveat  to  all  the  world.  It  was 


788 

in  effect,  an  attachment  and  injunction.'  In  Muel- 
ler v.  Nugent,  184  U.  S.,  14,  22  Sup.  Ct.,  275,  46 
L.  Ed.,  405,  it  is  said:  'It  is  as  true  of  the  pres- 
ent law  as  it  was  of  that  of  1867,  that  the  filing  of 
a  petition  is  a  caveat  to  all  the  world,  and  in  effect 
an  attachment  and  injunction.'  In  Frazier's  Case, 
9  Am.  Bankr.  Kep.,  21, 117  Fed.,  746,  it  is  said: 

The  moment  the  petition  is  filed  the  proceeding 
is  in  rem.  It,  in  legal  effect  sequesters  all  of  his 
(bankrupt's)  property  interests  for  the  benefit  of 
all  his  creditors,  pari  passu,  if  seized  under  at- 
tachment or  a  writ  of  execution.  His  whole  estate 
passes  into  custodia  legis.  Eo  instanti  every 
creditor  of  the  bankrupt  becomes  an  adversary 
party  in  legal  proceeding  for  the  appropriation  of 
the  property  of  the  bankrupt,  and  stands  as  a 
creditor  seeking  the  aid  of  the  court  of  'exclusive 
jurisdiction.'  In  re  Pekin  Plow  Co.,  50  C.  C.  A., 
257,  112  Fed.,  308,  the  contest  was  between  the 
trustee  in  bankruptcy,  representing  creditors  at 
large  of  the  bankrupt,  and  a  petitioner  claiming 
under  an  unrecorded  chattel  mortgage.  Counsel 
for  the  petitioner,  contending  that  the  word  '  cred- 
itor' as  used  in  the  Nebraska  registry  statute  in- 
cluded only  a  judgment  execution,  or  attachment 
creditor,  argued  that  as  the  mortgage  was  valid 
as  between  the  mortgagor  and  the  mortgagee  it 
was  enforceable  notwithstanding  the  institution 
of  the  bankruptcy  proceedings.  The  state  court 
had  construed  the  statute  as  was  contended  by 
counsel  for  the  petitioner.  The  Circuit  Court  of 
Appeals  said: 

'Conceding  that  such  is  the  true  interpretation 
of  the  statute  in  question,  it  is  not  apparent  how 
the  petitioner  is  aided  thereby.  *  The  effect 

of  the  institution  of  such  bankruptcy  is  to  forth- 
with sequester  and  appropriate  all  the  property 
of  the  bankrupt  to  the  payment  oT  his  debts  pro 
rata  and  equally.  *  'f  By  such  a  proceeding  the 
creditors  "are  using  the  courts  of  law  and  their 
processes  for  the  collection  of  their  debts,"  and 


789 

the  creditors  thereby  make  an  effectual  seizure  of 
the  property  of  the  bankrupt.  *  *  * 

As  therefore  the  trustee  is  the  representative 
of  creditors,  who  are  from  the  date  of  filing  the 
petition  in  bankruptcy,  in  effect,  attaching  credi- 
tors, and  as  the  Virginia  registry  statute,  at  least 
as  to  such  creditors,  makes  void  the  reservation 
of  title  in  a  conditional  contract  of  sale,  it  fol- 
lows that  the  bankrupt  had  title  to  the  shoes,  and 
that  the  trustees  takes  his  title,  if  we  consider  the 
contract  as  a  conditional  contract  of  sale,  reserv- 
ing title.' 
See  also : 

In  re  Pekin  Plow  Co.,  112  Fed.,  308. 

Dolle  v.  Cassell,  14  A.  B.  E.,  52. 

In  re  Lukens,  138  Fed.,  188. 

In  re  Antigo  Screen  Door  Co.,  10  A.  B.  E., 

359. 

In  re  Frazier,  117  Fed.,  746,  9  A.  B.  E.,  21. 
Chesapeake  Shoe  Co.  v.  Seldner,  122   Fed., 

593. 

In  re  Thorp,  130  Fed.,  371. 
In  re  Beede,  138  Fed.,  441. 
In  re  First  National  Bank  of  Canton,  14  A.  B. 

E.,  52. 

In  re  Tweed,  12  A.  B.  E.,  548. 
In  re  Dunker,  13  A.  B.  E.,  760. 
In  re  N.  Y.  E.  Con.  Prtg.  Co.,  110  Fed.,  514. 
In  re  Kellogg,  112  Fed.,  52. 
State  Bank  v.  Cox   (C.  C.  A.  7th  Cir.),  38 

Chgo.  Legal  News,  193 ; Fed., 

Isaac   on   Conditional    Sales   in   Bankruptcy 

(1905),  pp.  7  et  seq.  and  cases  cited. 
In  Hewitt  v.  Berlin  Machine  Works,  194  U.  S.,  296 
(1904),  it  was  held  that  a  trustee  in  bankruptcy  gets 
no  better  title  than  that  which  the  bankrupt  has  and 
is  not  a  subsequent  purchaser  in  good  faith  under  the 
statute  of  New  York  in  reference  to  conditional  sales. 
It  was  therefore  held  that  as  the  vender's  title  under 
a  conditional  sale  is  good  against  the  bankrupt  it  is 
good  also  against  the  trustee. 


790 

The  decision  is  not  applicable  here  for  the  reason 
that  under  the  law  of  New  York  the  title  does  not  pass 
to  the  vendee  under  a  conditional  sale,  until  the  condi- 
tion is  fulfilled,  unless  the  sale  is  one  which  is  within 
the  scope  of  the  New  York  statute  governing  condi- 
tional sales.  That  statute  provided  that  such  sales 
shall  be  void  as  against  "subsequent  purchasers, 
pledges  or  mortgages  in  good  faith,"  etc.  The  court 
property  held  that  the  trustee  in  bankruptcy  did  not 
come  within  the  scope  of  the  statute.  And  the  Su- 
preme Court,  referring  to  the  holdings  of  the  lower 
courts,  concludes: 

"We  concur  in  this  view  which  is  sustained  by 
decisions  under  previous  bankruptcy  laws,  Winsor 
v.  McLellan,  2  Story,  492;  Donaldson  v.  Farwell, 
93  U.  S.,  631 ;  Yeatman  v.  Savings  Institution,  95 
U.  S.,  764,  and  is  not  shaken  by  a  different  result 
in  cases  arising  in  states  by  ivhose  laws  conditional 
sales  are  void  as  against  creditors." 
In  re  Smith  v.  Shuck,  132  Fed.,  301,  Hewitt  v.  Ber- 
lin Machine  Works,  194  U.  S.,  296  was  distinguished. 
The  court  there  said: 

' '  That  case  arose  in  New  York,  and  the  con- 
tract there  involved  and  decisions  of  the  courts  of 
that  state  must  be  considered  in  determining  the 
effect  of  the  decision.  The  contract  so  involved 
is  as  follows : 

The  title  and  right  of  possession  of  the  property 
for  which  this  note  is  given  remain  in  the  Berlin 
Machine  Works  'until  fully  paid  for.'  This  con- 
tract does  not  authorize  a  sale  or  other  disposi- 
tion of  the  property  by  the  vendee,  and  as  con- 
strued by  the  courts  of  New  York,  vests  no  title 
or  right  of  disposition  in  him  until  the  condition 
is  performed,  and  such  performance  is  a  condi- 
tion precedent  to  any  such  title  or  right  in  the 
vendee.  Bollard  v.  Burgett,  40  N.  Y.,  314.  Nor 
could  the  property  be  levied  upon  or  sold  under 
the  judicial  process  against  him.  Cole  v.  Mann, 
62  N.  Y.,  1.  Therefore,  under  the  plain  terms  of 
Sections  67a  and  70a  (5)  of  the  bankruptcy  act 


791 

(Act  July  1,  1898,  c.  541,  30  Stat.  564,  565,  (U.  S. 
Comp.  Stat.,  1901,  pp.  3449,  3451),  the  title  to  the 
property  would  not  pass  to  the  trustee  in  bank- 
ruptcy of  the  vendee.    Section  112,  c.  418,  p.  540, 
Laws   N.   Y.,   1897,   cited  in   the   opinion  of  the 
court,  does  not  apply  to  contracts  of  the  kind  in- 
volved in  that  case,  but  applies  only  to  such  con- 
ditional contracts  as  vest  in  the  vendee  a  right  to 
sell  or  otherwise  dispose  of  the  property." 
Although  the  authorities  are  not  in  full  accord  upon 
the  question  here  under  consideration,  I  am   of  the 
opinion  that  the  great  weight  of  authority  and  the  bet- 
ter reasoning  is  to  the  effect  that  in  those  states  where 
an  unrecorded  chattel  mortgage  or  a  conditional  sale 
contract  is  void  as  against  creditors  in  general,  or 
against  attaching  or  execution  creditors,  as  in  Illinois, 
that  such  mortgage  or  conditional  sale  contract  is  not 
enforceable  against  the  trustee  in  bankruptcy,  even 
though  the  creditors  have  notice.    This  is  true  whether 
the  bankruptcy  proceedings  are  voluntary  or  invol- 
untary.    I  am  of  the  opinion  that  the  Hartman  Com- 
pany is  entitled  to  file  its  claim  only  as  a  general  cred- 
itor, and  that  failing  so  to  do  a  discharge  in  bank- 
ruptcy will  nevertheless  (assuming  the  claim  has  been 
scheduled  or  that  the  mortgagee  has  notice  of  the  bank- 
ruptcy   proceedings)    dicharge    the    mortgage.      The 
mortgage  is  not  valid  as  against  the  trustee,  and  the 
discharge  in  bankruptcy  will  discharge  the  mortgage. 
A  different  question  is  presented  where  the  prop- 
erty covered  by  the  mortgage  is  claimed  by  the  bank- 
rupt as  exempt,  and  set  apart  to  him  by  the  trustee. 
The  trustee  takes  no  title  to  exempt  property  and  as 
to  such  property  the  chattel  mortgage  is,  I  think,  en- 
forceable as  between  the  parties  to  it,  even  though  it 
has  not  been  recorded. 


NOTE:— In  York  Mfg.  Co.  v.  Cassell,  201  U.  S.,  344,  the  United 
States  Supreme  Court  holds  that  a  trustee  in  bankruptcy  is  vested  with 
no  better  title  than  the  bankrupt  had  when  the  trustee's  title  accrued, 
unless  otherwise  provided  in  the  bankruptcy  act.  See,  also,  the  case  of 
Security  Warehouse  Co.  v.  Hand,  206  U.  S.,  415,  423  (1907),  and  cases 
therein  cited. — Ed. 


792 


WHETHER  A  FOREIGN  CORPORATION  WHICH  HAS  NOT  COM- 
PLIED WITH  THE  LAWS  OF  KANSAS  CAN  ENFORCE  A  CLAIM 
AGAINST  A  RESIDENT  BY  ASSIGNING  THE  CLAIM  TO  AN  IN- 
DIVIDUAL AND  BRINGING  SUIT  IN  HIS  NAME. 

(W.  T.  Rawleigh  Medical  Company,  January  17, 1906). 
"Answering  yours  of  November  3d,  the  opinion 
of  Mr.  Mayer  with  reference  to  a  decision  of  the 
Supreme  Court  of  Kansas  upon  the  foreign  cor- 
poration law  of  that  state,  dated  August  18,  1904, 
does  not  cover  the  point  about  which  we  inquired, 
namely:  Whether  a  corporation  could  collect  a 
claim  against  a  resident  of  Kansas  by  assigning 
their  claim  to  an  individual  and  bringing  suit  in 
his  name! 

Our  reason  for  making  this  inquiry  is  that  we 
understand   some  of  the  larger  corporations  in 
your  city  have  been  following  this  plain  right 
along    of    assigning    for    collection    such    claims 
where  they  cannot  be  sued  in  their  own  name. ' ' 
The  decisions  are  in  conflict  as  to  the  effect  of  non- 
compliance  by  a  foreign  corporation  with  the  provi- 
sions of  the  foreign  corporation  law  in  the  state  where 
a  corporation  transacts  business.     In  some  states  the 
contracts  made  in  the  foreign  state  are  declared  or 
held  to  be  void,  while  in  other  states  the  remedy  on 
the  contract  is  merely   suspended   until   compliance. 
The  question  can  only  be  determined  by  reference  to 
the  statutes  of  the  particular  state  and  the  decisions 
thereunder. 

The  Kansas  statutes  (Sec.  1283)  prescribe  the  con- 
ditions upon  which  foreign  corporations  will  be  per- 
mitted to  do  business  in  Kansas,  and  conclude : 

"No  action  shall  be  maintained  or  recovery  had 
in  any  of  the  courts  of  this  state  by  any  corpora- 
tion doing  business  in  this  state  without  first  ob- 
taining the  certificate  of  the  secretary  of  state  that 
statements  provided  for  in  this  section  have  been 
properly  made."  (L.,  1898,  ch.  10,  sec.  12,  as 
amended  by  L.  1901,  ch.  125  sec.  3.) 


793 

This  statute  has  been  construed  in  several  cases. 
In  State  v.  American  Book  Co.  (Kan.  Apl.  9,  1904). 
76  Pac.,  411,  the  state  filed  a  bill  to  procure  the  can- 
cellation of  certain  contracts  entered  into  between  the 
state  and  the  defendant,  a  foreign  corporation.  The 
defendant,  at  the  time  of  making  the  contract,  had 
not  complied  with  the  foreign  corporation  law,  but 
thereafter  did  so.  The  court  refers  to  the  provision 
of  the  Kansas  statute  as  amended  in  1901,  and  says : 

"Nor  does  the  statute,  in  terms,  prohibit  for- 
eign corporations  from  doing  business  in  this 
state,  or  avow  any  purpose  to  deny  the  people  the 
benefit  of  commercial  intercourse  with  them.  In- 
deed, under  its  title  the  statute  could  not  extend 
beyond  regulation.  It  prescribed  no  penalty 
whatever  for  failure  to  obtain  permission  to  do 
business  here.  It  makes  no  reference  whatever 
to  any  effect  which  such  failure  may  have  upon 
the  title  to  property  acquired,  contracts  made,  or 
other  incidents  to  the  doing  of  business.  It  does 
not  anywhere  use  the  terms  'unlawful,'  'illegal,' 
or  'void,'  or  any  equivalent  for  them,  as  applied 
to  the  transaction  of  business  without  authority. 
And  it  does  not  declare  any  determination  what- 
ever to  reach  beyond  the  offending  company  and 
nullify  wholesome  business  bargains  in  matters 
of  lawful  trade.  Foreign  corporations  may  be 

supervised,  but  business  is  not  proscribed." 

***** 

' '  From  this  survey  of  the  statute,  it  appears  the 
legislature  intended  it  to  be  complete;  that  the 
regulation  of  foreign  corporations,  and  not  tbte 
penalizing  of  business  transactions,  is  its  purpose ; 
that  such  regulation  is  made  the  concern  of  the 
state  in  its  special  capacity  as  visitor,  and  not  of 
any  individual  as  a  mere  party  to  a  contract; 
that  a  party  to  a  contract  is  allowed  to  interfere 
in  but  a  single  instance,  and  then  only  to  the  ex- 
tent of  abating  a  suit  against  him;  and  that  spe- 
cific penalties  are  chosen  to  meet  certain  contin- 
gencies." 

***** 


794 

"To  say  that  the  legislature  intended  the  stat- 
ute to  render  void  contracts  made  without  com- 
plying with  it  is  to  say  the  legislature  intended 
that,  if  a  foreign  company  should  write  life  in- 
surance in  this  state,  it  might  take  the  premiums, 
and  then,  upon  the  death  of  the  persons  assured, 
refuse  to  pay  the  policies ;  and  it  is  to*  say  that  a 
farmer  of  this  state  may  purchase  a  machine  or 
a  herd  of  cattle  from  a  non-resident  corporation 
on  credit,  secure  the  price  by  a  chattel  mortgage, 
refuse  to  pay,  and  then  defeat  an  action  of  re- 
plevin for  the  property.  Such  an  interpretation 
might  attract  the  enthusiastic  admiration  of  the 
highwayman,  but  it  has  nothing  to  commend  itself 
to  a  court  of  justice." 

And  in  the  later  case  of  John  Deere  Plow  Co.  v. 
Wyland  (Kan.  1904),  76  Pac.,  862,  the  court,  in  con- 
struing the  same  statute,  said : 

"Its  contracts  made  during  its  non-compliance 
are  not  held  void." 
And 

"The  part  of  the  statute  under  consideration 
lays  no  embargo  or  burden  upon  interstate  com- 
merce; it  does  not  seek  to  prevent  or  hamper 
the  transactions  of  corporations  engaged  in  that 
business;  it  does  not  declare  their  contracts  void, 
or  deny  them  the  enforcement  of  any  rights  what- 
ever ;  it  merely  provides  that  if  they  wish  to  make 
use  of  the  machinery  of  the  state  courts  for  their 
own  benefit  they  must  do  so  upon  the  same  terms 
as  other  corporate  suitors." 

In  Iowa  Falls  Mfg.  Co.  v.  Farrar  (S.  D.  1905),  104 
N.  W.,  449,  the  court  passed  upon  the  South  Dakota 
statute,  which  is  similar  to  that  of  Kansas.  The  court 
said: 

"Failure  to  appoint  an  agent  and  file  the  arti- 
cles of  incorporation  does  not  render  the  contract 
for  building  material  void,  but  merely  suspends 
appellants'  right  to  commence  or  maintain  an  ac- 
tion for  the  foreclosure  of  its  lien  until  the  statute 
is  complied  with." 


795 

It  is  thus  apparent  that  in  Kansas,  where  a  foreign 
corporation  fails  to  comply  with  the  law,  the  remedy 
on  its  contracts  is  merely  suspended  until  the  law  is 
complied  with.  Subsequent  compliance  would  there- 
fore permit  the  foreign  corporation  to  maintain  a  suit 
on  a  contract  made  prior  to  compliance  with  the  law. 
The  rule  is  otherwise  where  the  contracts  of  a  foreign 
corporation  failing  to  comply  with  the  law  are  declared 
or  held  to  be  void,  or  the  business  transacted  is  ille- 
gal. In  such  a  case  no  recovery  can  be  had  thereon, 
even  in  the  hands  of  an  assignee.  Whether  an  as- 
signee can  recover  in  a  case  where  the  remedy  of  the 
assignor  is  merely  suspended  presents  a  more  difficult 
question. 

In  Beale  on  Foreign  Corporations,  Sec.  247,  it  is 
said : 

"It  has  been  urged  that  though  the  corporation 
itself  cannot  sue  before  compliance,  yet  in  a  state 
where  the  contract  itself  is  not  void  and  where 
an  assignee  of  a  chose  in  action  may  sue  in  his 
own  name,  an  assignee  of  the  contract  should  be 
allowed  to  sue;  and  in  one  case  it  was  so  held, 
the  court  saying  that  the  disability  of  an  assignor 
does  not  affect  the  remedy  of  the  assignee.  But 
the  prevailing,  and  it  would  seem  the  sounder, 
view  is  that  the  statute  operates  not  merely  to 
deny  a  remedy  in  the  ordinary  sense,  but  to  take 
away  jurisdiction  from  the  court,  and  that  the 
court  being  deprived  of  jurisdiction  by  the  stat- 
ute, cannot  take  it  merely  because  the  claim  has 
been  assigned." 

In  Mueller  v.  Rope  Co.  (1897),  53  N.  Y.  S.,  255  (Sup. 
Ct.  of  N.  Y.,  Spec,  Term),  the  court  (Lawrence,  J.) 
construed  the  New  York  statute  in  relation  to  foreign 
corporations.  That  statute  provided,  inter  alia: 

"No  foreign  stock  corporation,  doing  business 
in  this  state  without  such  certificate  shall  main- 
tain any  action  in  this  state  upon  any  contract 
made  by  it  in  this  state  until  it  shall  have  pro- 
cured such,  certificate." 
The  law  also  provided  that  no  foreign  corporation 


796 

should  do  business  in  the  state  until  compliance  with 
the  law. 

Suit  was  brought  by  an  assignee  of  a  foreign  corpo- 
ration.   The  court  said: 

"Not  having  filed  the  certificate   required  by 
the  statute,  the  plaintiff's  assignor  could  not  have 
maintained  this  action;  and,  as  the  fountain  can- 
not rise  higher  than  its  source,  it  would  appear 
that  the  statute  cannot  be  avoided  or  evaded  by 
making  an  assignment  of  the  claim." 
And  in  the  case  of  Herzberg  v.  Boiesen,  53  N.  Y.  S., 
256  (City  Ct,  N.  Y.,  Spec.  Term,  1897),  the  court  (Mc- 
Carthy, J.)  construed  the  same  statute,  and  said: 

"The  plaintiff  sues  as  an  assignee  of  a  foreign 
corporation  which  was  doing  business  in  this  state, 
and  the  transaction  out  of  which  this  action  arose 
took  place  in  this  state.  Now,  it  must  be  con- 
ceded that  this  provision  of  the  statute  does  not 
affect  the  cause  of  action.  But  it  is  equally 
clear,  however,  that  it  does  not  affect  a  provisional 
remedy;  for,  in  an  ordinary  action,  such  objection 
cannot  be  taken  by  demurrer  to  the  complaint. 
It  must  be  taken  by  answer,  and  is  purely  a  mat- 
ter of  defense.  Nicoll  v.  Clark,  13  Misc.,  Eep., 
128;  34  N.  Y.,  Supp.,  159;  Lumber  Co.  v.  Bussell, 
84  Hun.,  115 ;  31  N.  Y.  Supp.,  1107.  It  is  not  a 
question  of  pleading,  but  solely  one  of  jurisdic- 
tion. It  is  aimed  against  the  use  and  enforce- 
ment of  a  provisional  remedy  by  a  corporation 
unless  it  has  procured  the  certificate  required  by 
the  statute,  and  in  such  case  the  papers  must 
show  jurisdiction  of  the  court,  and  must  allege 
all  those  facts  which  are  necessary  to  confer  the 
same;  for  where  the  statute,  as  a  preliminary  to 
jurisdiction,  requires  certain  facts  to  exist,  they 
cannot  be  presumed  (Oliver  v.  Manufacturing  Co. 
(Sup.),  10  N.  Y.  Supp.,  771),  and,  as  the  plaintiff 
has  failed  to  do  so  in  this  case,  this  attachment  is 
certainly  defective.  The  plaintiff  took  no  more 
nor  greater  rights  than  his  assignor,  and  if  his 
assignor,  a  foreign  corporation,  failed  to  file  the 
certificate  required  by  the  statute,  and  thereby 


797 

could  not  either  enforce  a  provisional  remedy,  or 
maintain    an   action,    the   plaintiff,    who    has    no 
greater  right  than  his  assignor,  cannot  resort  to 
either. ' ' 
In  the  later  case  of  Lindheim  v.  Sitt  (Sup.  Ct.,  Spec. 

Term,  Nov.,  1900,  68  N.  Y.  S.,  145),  the  court  (Bischoff, 

J.)  says: 

"As  modified  by  stipulation,  the  issue  of  law  is 
whether  an  action  may  be  maintained  by  the  as- 
signee of  a  demand  accruing  to  a  foreign  cor- 
poration, where  the  latter  for  a  failure  to  pro- 
cure the  certificate  required  by  law  (Laws  1892, 
c.  687,  sec.  15)  could  not  itself  sue  upon  the  claim. 
It  has  been  held  that  this  provision  of  the  stat- 
ute does  not  affect  the  cause  of  action  as  such, 
but  applies  only  to  the  remedy  (Neuchatel  As- 
phalte  Co.  v.  City  of  New  York,  155  N.  Y.,  373, 
49  N.  E.,  1043) ;  and  the  familiar  principle  where- 
by an  assignee's  rights  are  measured  by  the  rights 
of  his  assignor  does  not  operate  to  bind  the  as- 
signee by  a  restriction  to  the  remedies  open  to  the 
assignor  (McBride  v.  Bank,  26  N.  Y.,  450;  Peter- 
son v.  Bank,  32  N.  Y.,  21;  Bank  v.  Townley,  159 
N.  Y.,  490,  54  N.  E.,  74).  In  the  case  last  cited 
the  question  arose  as  to  the  validity  of  an  assign- 
ment of  a  claim  for  salary  held  by  the  assignor 
against  a  corporation  of  which  he  was  an  officer, 
which  claim,  under  the  provisions  of  the 
statute  enacted  for  the  protection  of 
creditors  of  a  corporation,  he  could  not 
personally  enforce  at  the  time.  The  court 
held  that  the  disability  of  the  assignor  did 
not  reach  the  remedy  of  the  assignee,  and,  upon 
the  reasoning  employed,  this  authority  is  quite 
pertinent  to  the  question  now  presented.  In  that 
case,  as  in  this,  the  assignment  might  serve  merely 
to  defeat  a  possible  purpose  of  the  statute,  yet  the 
fact  that  the  transfer  was  absolute  in  form,  and 
made  to  a  person  whose  capacity  to  sue  was  not 
limited  by  statute,  was  there  held  controlling. 
Except  as  modified  by  the  law  relating  to  the 


798 

filing  of  a  certificate,  above  noted,  the  validity  of 
a  claim  in  the  hands  of  a  foreign  corporation,  for 
the  purpose  of  an  action,  in  this  state,  is  recog- 
nized by  the  code  (section  1779),  and,  in  principle, 
authorities  oppose  the  view  that  the  limitation 
upon  the  right  to  maintain  an  action  affects  the 
remedy  of  a  person  to  whom  the  claim  of  the  cor- 
poration, otherwise  valid,  has  been  sold. 

There  is  no  force  in  the  suggestion  that  the  act 
of  making  the  transfer  to  this  plaintiff  was  unlaw- 
ful as  l  business '  done  by  the  corporation,  since  the 
'business'  prohibited  by  the  statute  is  that  done 
within  the  state,  and  the  place  where  this  assign- 
ment was  made  is  not  disclosed  by  the  pleadings, 
The  special  term  decision  in  Mueller  v.  Rope  Co. 
(Supp.),  53  N.  Y.  Supp.,  255,  proceeded  solely  upon 
the  expression  of  the  principle  that  the  assignee 
had  no  better  case  than  his  assignor;  but,  as  I 
have  pointed  out,  this  proposition  does  not  cover 
the  point  involved  here,  it  having  been  established 
by  authority  that  the  remedy,  not  the  right,  is  all 
that  this  statute  affects." 

This  case  is  cited  with  approval  in  the  case  of  Smith 
v.  Cooperage  Co.,  71  N.  Y.  Supp.,  479  (City  Ct.  of 
N.  Y.,  Gen.  Term,  1901). 

In  the  case  of  Kinney  v.  Reid  Ice  Cream  Co.  (Sup. 
Ct.  App.  Div.,  Jan.,  1901),  68  N.  Y.  Supp.,  325,  the 
plaintiff  was  the  assignee  of  a  foreign  corporation, 
and  brought  suit  in  New  York  to  recover  upon  an  un- 
dertaking furnished  by  the  defendant  for  the  purpose 
of  securing  an  attachment  on  an  action  brought  by 
it  against  plaintiff's  assignor.  The  statute  provided 
that  every  foreign  corporation,  etc.,  shall  pay  a  license 
tax,  and  also  that: 

' '  No  action  shall  be  maintained  or  recovery  had 
in  any  of  the  courts  of  this  state  by  such  foreign 
corporation  without  obtaining  a  receipt  for  the 
license  fee  hereby  imposed  within  thirteen  months 
after  beginning  such  business  within  the  state." 
The  court  said: 

are   of   opinion   that   Bernhard's   Phar- 


799 

macy,  having  done  business  in  this  state  for  a 
period  of  more  than  one  year,  had  become  obli- 
gated to  the  State  of  New  York  for  the  amount 
of  the  license  tax  provided  by  section  181  of  chap- 
ter 908  of  the  laws  of  1896,  and  that,  in  the  ab- 
sence of  the  receipt  for  the  license  fee,  it  would 
have  no  standing  in  court  to  bring  this  action, 
and  its  assignee  cannot  be  in  a  better  position 
than  Bernhard's  Pharmacy.  Lumber  Co.  v.  Rus- 
sell, 84  Hun.,  114,  31  N.  Y.  Supp.,  1107 ;  Mueller 
v.  Rope  Co.  (Sup.),  53  N.  Y.  Supp.,  255;  Herz- 
berg  v.  Boiesen  (City  Ct.  N.  Y.),  53  N.  Y.  Supp., 
256.  We  see  no  reason  why  the  rule  applied  in 
the  cases  cited  in  reference  to  section  15  of  the 
general  corporation  law  should  not  apply  as  to 
section  181  of  chapter  908  of  the  laws  of  1896, 
and  the  defense  is  not,  therefore,  insufficient  in 
law,  and  the  demurrer  was  properly  overruled." 
No  reference  is  made  to  the  case  of  Lindheim  v.  Sitt, 
supra. 

In  Box  Board  Co.  v.  Paper  Co.  (Sup.  Ct.,  Spec. 
Term,  1904),  90  N.  Y.  S.,  836,  the  plaintiff  sued  upon 
an  assigned  claim  accruing  to  the  assignor,  a  foreign 
corporation.  The  defendant  alleged  that  the  plain- 
tiffs '  assignor  had  not  complied  with  Section  15  of  the 
General  Corporation  Law  (Laws  1892,  p.  1805,  Ch. 
687),  and  with  Section  181  of  the  Tax  Law  (Laws 
1896,  p,  856,  Ch.  687).  The  amendment  of  1901,  Sec- 
tion 15,  provided  that  no  action  could  be  maintained 
by  a  foreign  corporation  not  complying  with  the  law, 
and  also  that : 

"This  prohibition  shall  also  apply  to  any  as- 
signee of  such  foreign  stock  corporation  and  to  any 
person  claiming  under  such  assignee  or  such  for- 
eign stock  corporation  or  under  either  of  them." 
The  court  said: 

"Section  181  of  the  law  does  not  prohibit  the 
maintenance  of  an  action  by  the  assignee  of  a 
foreign  corporation,  and  accordingly  the  question 
of  compliance  with  the  statute  upon  the  part  of 
the  assignor  is  not  material  to  this  plaintiff's  right 


800 

to  sue.     Lindheim  v.  Sitt,  33  Misc.  Rep.,  62,  68 
N.  Y.  Supp.,  145." 

In  Ry.  Co.  v.  Davis  (Tex.  1899),  54  S.  W.,  381,  the 
court  held  that  plaintiff's  assignor  (a  foreign  cor- 
poration) was  doing  business  in  Texas  and  inasmuch 
as  it  had  not  complied  with  the  foreign  corporation 
law,  it  could  not  maintain  an  action.  The  court  then 
said: 

"As  the  assignee  of  a  chose  in  action  stands 
exactly  in  the  shoes  of  his  assignor  (2  Am.  &  Eng. 
Ency.  Law  (2d  Ed.),  1079),  especially  as  in  this 
case,  where  the  assignment  is  without  considera- 
tion, the  plaintiff,  as  assignee,  could  not 
maintain  this  action  as  to  the  damages 
done  the  cattle  belonging  to  such  foreign 
corporation,  when  the  Corralitos  Company 
could  not  itself  maintain  it.  Nor,  as  to 
the  cattle  belonging  to  the  Corralitos  Com- 
pany, do  we  think  that  the  plaintiff  can  maintain 
an  action  for  the  alleged  damage  done  them,  upon 
the  ground  that  they  were  damaged  while  in  his 
possession,  even  if  the  facts  showed  they  were 
in  his  possession  at  the  time  of  the  alleged  injuries 
(which  they  do  not),  or  upon  the  ground  that  they 
were  shipped  by  him  under  a  contract  to  be  de- 
livered him  at  their  destination.  His  control  of 
the  cattle,  and  his  shipment  of  them,  were  as  the 
manager  and  agent  of  the  Corralitos  Company; 
and  not  only  the  cattle  belonging  to  it,  but  those 
belonging  to  him  and  Humphreys,  were,  according 
to  the  written  contract  of  shipment,  to  be  deliv- 
ered to  the  Corralitos  Company  at  Colorado.  To 
permit  an  agent  of  a  corporation  which  cannot,  on 
account  of  its  non-compliance  with  our  law  main- 
tain an  action  in  the  courts  of  this  state,  to  prose- 
cute a  suit  for  damages  to  the  property  belonging 
to  such  foreign  corporation,  would  enable  it, 
through  another,  to  do  what  it  could  not  directly 
do  itself,  and  thus  render  the  statute  nugatory." 
The  court  reversed  itself  on  rehearing,  and  held  that 
the  foreign  corporation  was  engaged  in  interstate  com- 


801 

merce,  but  it  did  not  discuss  the  right  of  the  assignee 
to  maintain  a  suit. 

In  this  connection  it  must  be  noted  that   Section 
4454,  Gen.  Stat.  of  Kansas,  1901  (Sec.  26),  provides: 
"Every  action  must  be  prosecuted  in  the  name 
of  the  real  party  in  interest  *." 

Section  4455  provides : 

"In  the  case  of  an  assignment  of  a  thing  in 
action,  the  action  of  the  assignee  shall  be  with- 
out prejudice  to  any  set  off  or  other  defense  now 
allowed  *  *." 

It  is  thus  apparent  that  the  authorities  are  con- 
flicting and  involve  the  question  in  a  maze  of  doubt. 
The  Kansas  statute  provides  that  no  action  shall  be 
maintained  or  recovery  had  "by  any  corporation," 
etc.  The  Kansas  courts  have  held  that  this  prohibi- 
tion relates  solely  to  the  remedy  and  does  not  affect 
the  validity  of  the  contract.  Under  the  Kansas  stat- 
ute the  assignee  can  sue  in  his  own  name,  as  he  is 
the  real  party  in  interest.  Strictly  construed,  such  a 
statute  relating  to  acting  by  foreign  corporations  has 
no  reference  to  an  assignee  who  by  the  law  of  Kansas 
can  sue  in  his  own  name,  although  it  is  a  general  rule 
of  law  that  the  assignee  stands  in  the  shoes  of  his 
assignor.  In  my  opinion,  in  Kansas  a  bona  fide  as- 
signee of  a  claim  assigned  by  a  foreign  corporation 
would  be  permitted  to  recover,  even  though  such  cor- 
poration had  not  complied  with  the  law. 

I  am  further  of  the  opinion  that  in  those  States 
(like  Illinois)  where  a  claim,  if  assigned,  can  be  sued 
for  only  in  the  name  of  the  assignor,  a  statute  like 
the  one  under  consideration  would  prevent  a  re- 
covery. If,  however,  the  assignment  is  not  bona  fide, 
and  if  the  law  of  the  particular  State  allows  the  bona 
fides  of  the  assignment  to  be  questioned,  then,  in  my 
opinion,  no  recovery  can  be  had  by  such  an  assignee. 
In  other  words,  if  the  assignment  is  merely  colorable, 
and  made  for  the  purpose  of  bringing  suit,  and  if  the 
proceeds  of  the  suit  are  to  go  to  the  assignor,  then 
such  a  plaintiff  would  not  be  the  "real  party  in  in- 
terest," and  the  same  defense  could  be  interposed  as 
if  the  assignor  had  sued. 


802 

A  slightly  different  question  is  presented  in  the 
case  of  negotiable  instruments.  A  bona  fide  holder 
of  such  instruments  can  maintain  an  action  upon  the 
same,  even  though  the  indorser  could  not.  An  ex- 
ception to  this  rule  exists  where  the  statute  declares 
the  contract  to  be  void. 

Tiedelman  on  Commercial  Paper,   Sec.  178, 
and  cases  cited. 


WHETHER  IN  EVENT  OF  LOSS  A  POLICY  CAN  BE  ENFORCED 
WHEN  ISSUED  BY  A  FOREIGN  FIRE  INSURANCE  COMPANY 
WHICH  IS  NOT  AUTHORIZED  TO  DO  BUSINESS  IN  ILLINOIS. 

(Parlin  &  Orendorff  Company,  February  28,  1906.) 
"The  lumber  insurance  company  of  New  York 
is  offering  to  carry  a  line  of  insurance  on  our 
lumber  yards.  This  company  we  find  is  not  au- 
thorized to  do  business  in  Illinois;  in  other 
words,  have  not  complied  with  the  requirements 
of  obtaining  license  which  would  permit  them  to 
have  local  representatives  in  this  state.  The 
company  is  highly  regarded  according  to  reports 
received  by  us  and,  as  we  understand  it,  there  is 
nothing  illegal  in  their  offering  to  carry  our  line 
by  soliciting  us  direct.  We  wish,  however,  that 
you  would  verify  this,  as  we  are  not  entirely 
clear  on  it.  As  we  understand  it,  there  is  noth- 
ing in  the  constitution  of  the  State  of  Illinois 
which  would  prohibit  them  from  writing  lines  in 
Illinois  providing  they  do  this  business  direct 
with  the  policy  holders.  The  only  difference  being 
that  in  case  it  becomes  necessary  to  take  legal  ac- 
tion to  enforce  payment  of  a  loss  we  would  be  re- 
quired to  sue  them  in  their  home  State  of  New 
York.  We  will  appreciate  any  information  you 
can  give  us  on  this  subject." 

The  insurance  laws  of  Illinois  in  relation  to  foreign 
fire  insurance  companies  provide  that  such  companies 
shall  not,  directly  or  indirectly,  "take  risks  or  transact 
any  business  of  insurance  in  this  State." 


803 

If,  therefore,  the  company  in  question  writes  any 
insurance  on  property  in  this  State,  it  must  comply 
with  the  law,  even  though  the  contracts  of  insurance 
are  made  in  another  State. 

Buell  v.  Grain  Co.,  65  111.  App.,  271. 

Rose  v.  Kimberly  Co.,  89  Wis.,  545 ;  63  N.  W., 

526. 

If,  however,  such  company  transacts  business  and 
issues  policies  without  complying  with  the  law,  a  re- 
covery may  still  be  had  by  the  policy  holder  in  case  of 
loss.  The  company  is  estopped  to  set  up  as  a  defense 
to  an  action  on  a  policy  its  failure  to  comply  with  the 
law.  Such  laws  are  enacted  for  the  protection  of  the 
public  against  the  acts  of  irresponsible  foreign  insur- 
ance companies  and  the  duties  and  penalties  are  im- 
posed upon  the  insurance  companies  and  not  upon 
those  who  do  business  with  them. 

Insurance  Co.  v.  Rust,  141  111.,  85,  aff'g.  40 

111.  App.,  119. 

Wheeler  v.  Insurance  Co.,  102  111.  App.,  48. 
McCornack  on  Illinois  Insurance  Law,  page 

385. 

In  my  opinion,  in  case  of  loss,  an  action  could  be 
maintained  on  the  policy  in  this  State,  provided  service 
could  be  obtained  upon  the  company. 

I  also  refer  to  my  opinion  of  January  13,  1906,  for 
the  Monmouth  Pottery  Co.,  in  reference  to  foreign  mu- 
tual insurance  companies  doing  business  in  Illinois. 


EMPLOYER  S     LIABILITY     UNDER     THE     CHILD     LABOR     LAW 
WHERE  A  FALSE  AFFIDAVIT  HAS  BEEN  FILED. 

(W.  E.  Eitchie,  February  28, 1906.) 
"I  am  in  receipt  of  yours  enclosing  Mr.  Mayer's 
opinion  in  the  child  labor  matter.  In  his  opin- 
ion he  quotes  the  case  of  the  American  Car  & 
Foundry  Co.  v.  Armentraut,  214  111.,  509,  but  in 
that  case  the  child  was  under  fourteen  years  of 
age,  which  is  an  age  at  which  they  are  absolutely 


804 

forbidden  to  work.  Now,  in  the  case  I  cited,  the 
person  was  fifteen  years  old;  as  a  matter  of  fact, 
what  I  wanted  to  do  was  to  find  when  a  person 
of  legal  age  to  work  eight  hours  a  day,  but  not  on 
hazardous  machinery,  said  they  were  sixteen  years 
old  and  when  the  child  looked  to  be  sixteen  years 
or  older,  had  an  affidavit  from  parent  or  guardian, 
couldn't  there  be  something  done  to  hold  the  em- 
ployer blameless  in  case  of  an  accident.  I  hadn't 
considered  a  person  under  fourteen  years  old 
working  at  all  and  stating  that  they  were  sixteen 
or  more." 

The  liability  of  the  employer  is  not  obviated  or  les- 
sened in  any  degree  by  the  untruthful  representation 
of  the  child  or  parent  that  the  employe  is  above  the 
age  of  sixteen,  but  by  the  actual  age  of  the  child  so 
employed. 

I  again  refer  to  my  opinion  on  this  subject  of  De- 
cember 26,  1905,  in  which  I  referred  to  the  decision  of 
the  Supreme  Court  of  this  state  in  American  Car  & 
Foundry  Co.  v.  Armentraut,  214  111.,  509,  wherein  the 
court  said: 

"It  (the  employer)  must  ascertain  at  its  peril 
that  the  persons  it  employs  are  members  of  the 
class  of  persons  it  may  lawfully  employ. 
Moreover,  if  the  child's  statement  to  the  effect 
that  he  was  above  the  age  of  sixteen  would  con- 
stitute a  defense,  the  law  could  never  be  enforced 
in  any  case  where  the  child  was  willing  to  make  a 
false  statement  in  reference  to  his  age  for  the 
purpose  of  obtaining  the  employment." 
Under  the  statement  contained  in  Mr.  Ritchie's  sec- 
ond letter  of  inquiry  it  appears  that  the  child  in  ques- 
tion is  above  the  age  of  fourteen  and  under  the  age  of 
sixteen,  and  that  the  employment  is  "not  on  hazard- 
ous   machinery."     So    far    as    the    present    question 
is  concerned,  it  is  immaterial  whether  the  machinery 
is    "hazardous"   or  non-hazardous.    If   the   child    is 
over  fourteen  years,  but  under  sixteen  years  of  age 
(even  though  there  be  filed  an  affidavit  that  he  is  over 
sixteen  years),  and  if  the  child  be  employed  in  an 


805 

occupation  that  is  prohibited  to  a  child  under  sixteen 
by  the  statute,  then  the  same  rule  of  positive  liability 
applies  as  though  the  child  were  under  fourteen.  If 
the  child  is  employed  in  contravention  of  any  of  the 
provisions  of  the  statute,  the  fact  that  he  represented 
himself  above  the  age  of  sixteen  years  does  not  change 
the  positive  liability  of  the  employer,  and  that  liabil- 
ity is  as  stated  in  my  opinion  of  December  26,  1905. 

If  a  minor  over  the  age  of  fourteen,  and  under  the 
age  of  sixteen,  is  employed  in  a  position  and  to  do 
work  not  prohibited  by  statute,  the  rule  of  liability  so 
applying  is  not  governed  by  the  statute  in  question, 
but  is  controlled  entirely  by  the  common  law  rule  of 
liability  applying  to  persons  of  immature  years  as 
distinguished  from  the  employment  of  persons  of  ma- 
ture years. 

The  Supreme  Court  of  this  state  has  recently  passed 
upon  this  question  in  the  case  of  Siegel,  Cooper  &  Co. 
v.  Treka,  218  111.,  559,  wherein  the  court  said: 

"In  speaking  of  the  difference  to  be  observed 
in  the  application  of  the  rule  of  assumed  risk  as 
between  minors  and  adults,  this  court,  in  Chicago 
Anderson  Pressed  Brick  Co.  v.  Reinneiger,  140 
111.,  334,  said  (p.  338) :  'But  the  rule  is  modified, 
in  the  case  of  young  persons  of  inexperience  and 
immature  judgment,  who  are  not  capable  of  fully 
understanding  and  appreciating  the  peril  to  which 
they  are  exposed.  They  are  entitled  to  recover 
for  injuries  which  result  from  such  perils  unless 
they  have  been  instructed  how  to  avoid  them.' 
And  in  discussing  this  subject  in  Herdman  Har- 
rison Milling  Co.  v.  Spehr,  145  111.,  329,  with  ref- 
erence to  the  general  rule  applicable  to  adults  and 
its  limitations  when  applied  to  minors,  we  said 
(p.  334) :  'That  this  general  rule  does  not  apply 
to  employes  who  from  youth  or  want  of  the  nat- 
ural facilities  are  unable  to  appreciate  the  danger 
incident  to  the  employment  or  which  may  result 
from  the  continued  use  of  defective  machinery 
or  tolls  is  equally  well  settled.'  " 


806 


THE  LIABILITY  OF  A  CARRIER  FOR  GOODS  DESTROYED  BY  FIRE 
IF  THEY  ARE  NOT  REMOVED  WITHIN  FORTY-EIGHT  HOURS, 
AND  AFTER  DEMURRAGE  CHARGES  ARE  ACCRUING. 

(Thomson  &  Taylor  Spice  Company,  March  3,  1906.) 
11 A  car  of  merchandise  is  shipped,  reaches  its 
destination  and  consignee  duly  notified  of  its  ar- 
rival, and  at  the  same  time  consignee  is  advised 
that  demurrage  charges  will  begin  if  contents  are 
not  removed  by  a  certain  specified  date.    In  case 
contents  of  car  are  allowed  to  remain  over  the 
usual  free  time  allowed  and  is  destroyed  by  fire 
or  otherwise  damaged,  is  carrier  liable  for  value 
of  the  property  to  the  extent  of  the  damages  sus- 
tained?    Is  carrier  released  from  liability  after 
the  expiration  of  the  usual  free  time  allowed?" 
Demurrage  or  car  service  charges  are  regarded  as 
in  the  nature  of  storage  or  warehouse  charges.     The 
demurrage    charges   are   imposed   upon   carload   lots 
stored  in  the  cars  for  forty-eight  hours,  or  any  other 
reasonable  time  under  the  circumstances,  while  stor- 
age or  warehouse  charges  are  assessed  against  ship- 
ments generally  of  less  than  carload  lots  which  are 
stored  in  the  carrier's  warehouse  and  not  removed  by 
the  consignee  within  a  reasonable  time.     Practically, 
a  demurrage  charge  is  a  warehouse  charge. 

In  Schumacher  v.  C.  <&  N.  W.  Ey.  Co.,  207  111.,  199, 
207  (1904),  the  court  said: 

"When  a  railroad  company  delivering  freight 
at  its  point  of  destination  has  no  warehouse  at  that 
point  suitable  for  the  storage  of  bulk  freight  in 
carload  lots,  and  the  property  is  of  such  character 
that  the  cars  in  which  it  is  transported  furnish  a 
proper  and  safe  place  for  the  same,  so  that  it  is 
not  liable  to  damage  or  deterioration  arising  from 
heat  or  cold  or  the  elements,  there  would  seem  to 
be  no  reason  for  requiring  the  transporting  com- 
pany to  seek  a  warehouse  of  another  and  add  the 
cost  of  removal  to  the  cost  of  storage  when  said 
freight  may  properly  be  held  in  storage  in  the  cars 


807 

in  which  the  same  was  carried;  and  after  notice 
to  the  consignee,  and  a  reasonable  time  to  remove 
the  same,  reasonable  storage  charges  may  be  col- 
lected therefor,  and  the  freight  held  for  the  pay- 
ment thereof." 

In  Dixon  v.  Central  of  Ga.  Ry.  Co.,  110  Ga.,  173,  35 
S.  E.,  369  (1900),  the  court  said: 

"Demurrage  was  no  doubt  adopted  as  a  con- 
venient term  to  represent  the  storage  of  goods  in 
cars,  as  distinguished  from  the  stores  in  ware- 
house.    The  right  to  charge  for  such  storage  in 
cars  arises  when  the  goods  are  necessarily  de- 
tained by  virtue  of  the  failure  of  the  shipper  to 
comply  with  his  obligations  to  the  carrier.     The 
company  is  in  this  way  deprived  of  the  use  of  its 
cars,  and  even  if  the  rules  adopted  in  this  par- 
ticular case   as  to   such  charges   did  not  apply, 
they  would  still  be  entitled  to  reasonable  charges 
as  a  warehouseman  or  as  a  depository  for  hire." 
The  liability  of  a  carrier,  therefore,  for  injuries  to 
goods  in  cars  which  have  not  been  unloaded  by  the  con- 
signee within  the  reasonable  time  prescribed  by  the 
demurrage  rules,  is  that  of  a  warehouseman  and  not 
that  of  a  common  carrier  as  insurer.     In  Illinois  the 
liability  of  the  carrier  as  an  insurer  ceases  upon  the 
placing  of  the  cars  in  a  safe  and  convenient  position 
for  the  consignee  to  unload  the  same,  when  in  carload 
lots,  even  before  accrual  of  any  demurrage  charges. 
If  no  place  of  delivery  is  designated  or  required  the 
carrier  may  sidetrack  the  cars  in  the  usual  and  cus- 
tomary place  for  unloading  by  consignees. 

Gregg  v.  Illinois  Central  R.  R.  Co.,  147  111., 

550,  555  (1893). 

Nor  in  Illinois  is  any  notice  by  the  carrier  to  the  con- 
signee required  of  the  arrival  of  the  cars  to  terminate 
its  liability  as  a  common  carrier. 

/.  C.  R.  R.  v.  Carter,  165  111.,  570,  575  .(1897). 
It  may  be  noted  in  this  connection,  however,  that 
Rule  3,  Chicago  Car  Service  Association  Rules,  pro- 
vides for  notice  of  arrival  of  cars  before  beginning 
computation  of  demurrage,  except  when  delivery  is 
made  upon  private  tracks. 


808 

After  the  carrier  has  become  a  warehouseman  only, 
with  respect  to  the  goods  in  its  charge,  it  is  liable  only 
for  such  losses  or  injuries  as  are  shown  to  have  re- 
sulted from  the  want  of  ordinary  care  on  its  part- 
such  care  as  men  of  reasonable  prudence  ordinarily 
exercise  for  the  safety  of  their  own  goods  under  simi- 
lar circumstances.  As  a  warehouseman  (if  it  has  ex- 
ercised ordinary  care),  the  carrier  is  not  liable  for  a 
loss  caused  by  an  accidental  fire,  or  by  theft  or  by  the 
explosion  of  dangerous  goods  stored  in  its  warehouse, 
of  whose  character  it  was  ignorant,  nor  for  similar 
losses,  unless,  as  stated,  it  has  not  exercised  ordinary 
care. 

5  Am.  &  Eng.  Enc.  of  Law  (2d  Ed.),  284. 


IN    REFERENCE    TO    THE    UNITED    STATES    ALIEN    CONTRACT 
LAW  AND  ITS  APPLICATION. 

(Heath  &  Milligan  Co.,  March  27, 1906.) 
"Enclosed  we  hand  you  a  copy  of  the  Alien 
Contract  Law  passed  by  Congress  February  26, 
1885,  and  would  ask  you  to  hand  it  Mr.  Levy 
Mayer  with  the  request  that  he  give  an  opinion 
as  to  its  constitutionality.  It  looks  very  much  to 
us  as  though  it  was  to  a  marked  extent  class  legis- 
lation. 

Some  of  the  national  mercantile  and  manu- 
facturing associations  are  passing  resolutions  for 
the  repeal  of  this  obnoxious  bill,  the  only  pur- 
pose of  which,  that  we  can  see,  is  to  keep  the  best 
class  of  foreigners  from  coming  to  our  country,  as 
good  men  are  generally  employed  and  will  not 
leave  a  sure  thing  for  an  uncertainty.  This,  to 
our  mind,  is  largely  the  cause  of  the  increase  of 
socialism  in  our  country.  Preference  is  given  to 
the  generally  worthless  class  of  foreigners  accord- 
ing to  this  law." 

The  Act  in  question  is  the  Act  of  Congress  of  Feb- 
ruary 26,  1885,  Ch.  164,  23  Stat.  L.,  332?  entitled,  "An 


809 

Act  to  prohibit  the  importation  and  migration  of  for- 
eigners and  aliens  under  contract  or  agreement  to  per- 
form labor  in  the  United  States,  its  Territories,  and 
the  District  of  Columbia."  This  is  popularly  known 
as  the  Alien  Contract  Labor  Law,  and  prohibits  the 
assisting  or  encouraging  the  importation  or  migra- 
tion of  any  aliens  to  the  United  States  under  agree- 
ment or  contract  made  previous  to  migration  or  im- 
portation to  perform  labor  or  service  in  the  United 
States. 

This  Act  has  been  expressly  held  to  be  constitu- 
tional and  a  valid  exercise  of  the  power  of  Congress 
' '  to  regulate  commerce  with  foreign  nations. ' ' 

Lees  v.   United  States,  150  U.   S.,  465,  479 

(1893). 

United  States  v.  Craig,  28  Fed.,  795  (1886). 
In  re  Florio,  43  Fed.,  114  (1890). 
In  summing  up  its  conclusion,  the  court,  in  U.  S.  v. 
Craig,  28  Fed.,  795,  said : 

"While  the  case  is  one  of  considerable  public 
interest  the  constitutionality  of  the  act  is  too  clear 
to  require  an  elaborate  consideration. ' ' 
The  opinion  in  U.  S.  v.  Craig,  28  Fed.,  795,  is  ex- 
pressly approved  by  the  Supreme  Court  in  Lees  v. 
U.  S.,  150  U.  S.,  475,  480,  where  the  court  also  said: 

"Given  in  Congress  the  absolute  power  to  ex- 
clude aliens  it  may  exclude  some  and  admit  others, 
and  the  reasons  for  its  discrimination  are  not 
open  to  challenge  in  the  courts." 
And  in  Holy  Trinity  Church  v.  U.  S.,  143  U.  S.,  457, 
(1892),  the  court  held  that  this  act  did  not  apply  to  a 
contract  between  an  alien  residing  out  of  the  United 
States  and  a  religious  society  incorporated  under  the 
laws  of  a  State,  whereby  he  engaged  to  remove  to 
the  United  States  and  enter  into  the  service  of  the 
society  as  its  rector.     The  court  said  that  in  passing 
this  Act  "the  intent  of  Congress  was  simply  to  stay 
the  influx  of  this  cheap,  unskilled  labor." 

In  United  States  v.  Laws,  163  U.  S.,  285  (1896),  it 
was  held  that  a  contract  made  with  an  alien  in  a  for- 
eign country  to  come  to  this  country  as  a  chemist  on 


810 

a  sugar  plantation  in  Louisiana,  in  pursuance  of  which 
contract  said  alien  did  come  to  this  country,  and  was 
employed  on  a  sugar  plantation  in  Louisiana,  and  his 
expenses  paid  by  the  defendant,  was  not  such  a  con- 
tract to  perform  labor  or  service  as  was  prohibited  by 
this  Act. 

In  United  States  v.  Gay,  95  Fed.,.  226  (C.  C.  A., 
1899), .the  court  held  that  the  Act  was  intended  to  pro- 
hibit the  importation  of  foreigners  under  contract  to 
perform  unskilled  manual  labor,  and  that  an  individual 
agreement  to  employ  a  foreigner  resident  in  another 
country  as  a  draper,  window  dresser  and  dry  goods 
clerk  in  a  store  of  the  United  States  was  not  within  the 
prohibition  of  the  statute. 

The  Attorney  General  of  the  United  States,  under 
whose  opinions  the  customs  officials  act,  has  in  his 
construction  of  this  Act  limited  its  prohibition  to 
manual  laborers  as  distinguished  from  professional 
men.  In  23  Op.  Atty.  Gen.,  381  (1901),  the  opinion 
is  given  that  the  immigration  forbidden  by  section  1 
of  the  Act  of  February  26,  1885,  is  that  brought 
under  contract  to  perform  manual  labor  or  service ;  and 
that  manual  labor  includes  both  skilled  and  unskilled 
labor. 

It  is  to  be  noted  that  section  5  of  the  Act  of  February 
25,  1886,  stating  what  persons  are  exempt  from  the 
operations  of  the  Act,  was  amended  by  the  Act  of 
March  3,  1891,  and  by  the  Act  of  March  3,  1893,  Ch. 
206  (26  Stat.  L.,  1085;  27  Stat.  L.,  570),  and  it  now 
reads : 

"Sec.  5.  (Exemptions  from  operation  of  act.) 
That  nothing  in  this  act  shall  be  so  construed  as 
to  prevent  any  citizen  or  subject  of  any  foreign 
country  temporarily  residing  in  the  United  States, 
either  in  private  or  official  capacity,  from  en- 
gaging, under  contract  or  otherwise,  persons  not 
residents  or  citizens  of  the  United  States  to  act 
as  private  secretaries,  servants  or  domestics  for 
such  foreigner  temporarily  residing  in  the  United 
States  as  aforesaid;  nor  shall  this  act  be  so  con- 
strued as  to  prevent  any  person  or  persons,  part- 


811 

nership,  or  corporation  from  engaging,  under  con- 
tract or  agreement,  skilled  workmen  (sic)  in  for- 
eign countries  to  perform  labor  in  the  United 
States  in  or  upon  any  new  industry  not  at  pres- 
ent established  in  the  United  States,  provided, 
That  skilled  labor  for  that  purpose  cannot  be 
otherwise  obtained;  nor  shall  the  provisions  of 
this  act  apply  to  professional  actors,  artists,  lec- 
turers or  singers,  nor  to  persons  employed  strictly 
as  personal  or  domestic  servants,  nor  to  ministers 
of  any  religious  denomination,  nor  persons  belong- 
ing to  any  recognized  profession,  nor  professors 
for  colleges  and  seminaries;  provided,  That  noth- 
ing in  this  act  shall  be  construed  as  prohibiting 
any  individual  from  assisting  any  member  of  his 
family  to  migrate  from  any  foreign  country  to  the 
United  States,  for  the  purpose  of  settlement  here 
(23  Stat.  L.,  333;  26  Stat.  L.,  1085;  27  Stat.  L., 
570)." 

It  may  be  said,  in  addition,  that  the  power  to  restrict 
immigration  or  to  exclude  aliens  is  one  inherent  in 
nations. 

U.  S.  v.  Foong  King,  132  Fed.,  107. 

Matter  of  Tatsu,  10  Hawaii,  701. 

2  Cyc.  Law  &  Proc.,  119. 


IN"  REFERENCE  TO  THE  RECENT  DECISION   OF  THE   SUPREME 
COURT  IN  THE  TELEPHONE  SUIT. 

(Iroquois  Iron  Company,  March  27,  1906.) 
"Referring  to  the  recent  decision  in  the  Su- 
preme Court  regarding  rates  to  be  charged  by  the 
Chicago  Telephone  Company  for  telephones  in  the 
town  of  Hyde  Park,  would  say  that  we  have  been 
obliged  to  pay  $255  per  year  for  a  telephone  at 
our  South  Chicago  works  (Ninety-fifth  street  and 
Calumet  River)  which  are  in  the  town  of  Hyde 
Park,  exclusive  of  extension  stations,  switchboard 
and  other  charges.  We  did  this  under  protest, 


claiming  that  it  should  be  $125,  but  had  to  pay  the 
high  rate  or  go  without  the  service. 

Is  it  the  understanding  of  Mr.  Mayer  that  the 
recent  decision  compels  the  telephone  company  to 
make  us  a  $125  rate  or  will  the  case  have  to  be 
argued  further  before  the  status  of  the  telephone 
patrons  can  be  determined!" 

The  recent  decision  in  the  Supreme  Court  merely 
follows  the  decision  of  the  Appellate  Court  and  of 
Judge  Tuley  in  the  suits  instituted  by  the  Association. 
All  of  the  litigation  in  question  has  reference  only  to 
the  telephone  ordinance  of  1889,  with  the  terms  of 
which  the  members  art  doubtless  familiar.  Under  that 
ordinance  the  Telephone  Company  was  permitted  to 
charge  $125  for  each  business  telephone  within  certain 
designated  limits,  and  $25  a  mile  in  addition  outside 
of  these  limits.  South  Chicago,  although  now  in  the 
city  limits,  is  not  favorably  affected  by  the  decision 
referred  to,  as  the  legal  charge  under  the  ordinance 
would  be  $125  and  in  addition  $25  a  mile  for  each 
additional  mile  south  of  Thirty-ninth  street,  that  being 
the  southern  line  designated  in  the  ordinance.  The 
legality  of  the  rate  must  be  determined  irrespective 
of  the  ordinance.  The  Telephone  Company  is  a  public 
service  corporation,  and  it  must  supply  its  patrons 
at  reasonable  rates,  and  without  unjust  discrimination. 
Whether  a  particular  rate  is  reasonable  or  otherwise 
depends  upon  all  the  facts  and  circumstances  in  each 
particular  case.  If  in  the  present  case  there  are  any 
facts  which  warrant  the  inference  that  the  rate  charged 
is  unreasonable,  or  if  any  facts  are  known  which  dem- 
onstrate that  the  rate  charged  unjustly  discriminates, 
the  company  may  be  restrained  in  an  appropriate  legal 
proceeding. 


813 


WHETHER  A  SHIPPEE  CAN  EECOVEE  PEEPAID  EXPEESS 
CHAEGES  ON  A  SHIPMENT  THAT  HAS  BEEN  DESTEOYED  IN 
TEANSIT. 

(M.  Born  &  Co.,  March  27,  1906.) 
"We  would  like  very  much  to  have  the  opinion 
of  Mr.  Levy  Mayer,  General  Counsel  for  the  Illi- 
nois Manufacturers'  Association,  on  whether  or 
not  an  express  company  is  by  law  compelled  to 
refund  the  express  charges  on  packages  that  have 
been  delivered  to  them,  prepaid,  and  that  have 
been  burned  in  transit.  The  express  company 
agrees  to  reimburse  us  for  the  value  of  the  pack- 
ages destroyed,  but  refuses  to  refund  the  express 
charges  that  were  prepaid.  This  is  a  matter  that 
is  of  general  interest,  we  believe,  especially  in  our 
line. 

We  enclose  the  form  of  receipt  used  by  the  ex- 
press in  question." 

An  express  company  is  a  common  carrier,  and  the 
same  rules  which  determine  the  liability  of  other  car- 
riers of  goods  for  loss  of  or  damage  to  goods  entrusted 
to  them  for  transportation,  or  for  failure  or  delay  in 
carrying  and  delivering  such  goods,  are  generally 
applicable  to  express  companies. 

12  Am.  Eng.  Enc.  (2nd  Ed.),  568. 
U.  S.  Express  Co.  v.  Hutchins,  67  111.,  348. 
Boscowitz  v.  Adams  Express  Co.,  93  111.,  523. 
The  general  rule  is  that  when  goods  are  shipped  for 
transportation  and  are  lost  or  not  delivered,  the  proper 
measure  of  damages  is  the  value  of  the  same  at  the 
place  of  destination,  with  interest,  deducting  the  unpaid 
cost  of  transportation;  and  when  such  cost  has  been 
paid,  either  wholly  or  in  part,  it  is  erroneous  to  include 
the  same  in  the  assessment  of  damages. 

Northern  Transp.  Co.  v.  McClary,  66  111.,  233. 
Galena  &  Chgo.  R.  R.  Co.  v.  Rae,  18  111.,  488. 
Lackner  Bros.  v.  Adams  Express  Co.,  72  Mo. 

App.,  13. 
12  Am.  Eng.  Enc.  (2nd  Ed.),  569;  5  Am.  Eng. 

Enc.  (2nd  Ed.),  373. 
3  Sutherland  on  Damages  (3rd  Ed.),  sec.  918. 


814 

In  Hutchinson  on  Carriers  (2d  Ed.),  sec.  769,  the 
rule  is  stated : 

"It  is  well  settled  that  the  measure  of  damages 
for  the  goods  by  the  carrier,  when  he  is  liable  for 
such  loss,  is  generally  the  value  of  the  goods  at 
the  destination  to  which  he  undertook  to  carry 
them,  with  interest  on  such  value  from  the  time 
when  the  goods  should  have  been  delivered,  de- 
ducting, however,  the  unpaid  cost  of  transporta- 
tion, but  adding  such  incidental  damages  as  nat- 
urally and  proximately  flow  from  the  loss." 
But  in  Hutchinson  on  Carriers  (2d  Ed.),  sec.  471,  it 
is  said: 

"If  the  freight  be  paid  in  advance,  and  the 
goods  be  not  carried,  there  is  a  failure  of  consid- 
eration, and  the  money  may  be  recovered  by  the 
shipper,  unless  it  be  otherwise  agreed  between 
the  parties,  or  the  failure  to  carry  be  attributable 
to  the  fault  of  the  party  who  owns  or  controls 
them." 

And  in  6  Cyc.  Law  and  Procedure,  494,  it  is  said 
that  the  consignor  may  recover  back  freight  paid  in 
advance  where  the  goods  have  been  lost. 

The  statement  in  Hutchinson  on  Carriers,  Sec.  471, 
has  erroneously  been  applied  by  some  courts  to  car- 
riers by  rail.  Its  effect  should  be  strictly  limited  to 
maritime  law  and  to  carriers  by  water.  And  this  is 
also  true  of  the  statement  in  6  Cyc.,  494.  The  cases 
that  support  this  doctrine  are  shipping  cases,  and  the 
principle  of  liability  is  different  than  that  of  the  lia- 
bility of  carriers  by  rail.  Freight  earned  by  a  ship 
is  not  of  the  same  nature  as  freight  earned  by  a  rail- 
road. 

In  Benner  v.  Equitable  Ins.  Co.,  6  Allen,  222,  it  is 
said: 

'  *  The  general  rule  of  law  is  that  freight  paid  in 
advance  is  not  earned,  unless  the  voyage  for  which 
it  is  stipulated  to  be  paid  is  fully  performed ;  and 
the  owner  of  the  vessel  is  liable  to  a  claim  for 
reimbursement  in  favor  of  the  shipper,  if  for  any 
fault  not  imputable  to  the  latter  the  contract  of 
affreightment  is  not  fulfilled." 


815 

In  DeSilvalie  v.  Kendall,  4  Maule  &  Selw.,  37,  Lord 
Ellenborough  said: 

"By  the  policy  of  the  law  of  England,  freight 
and  wages,  strictly  so  called,  do  not  become  due 
until  the  voyage  has  been  performed.     But  it  is 
competent  to  the  parties  to  a  charter  party  to  cov- 
enant by  express  stipulation  in  such  manner  as  to 
control  the  general  operation  of  law. ' ' 
Thus  in  The  Hugo,  61  Fed.,  860,  where  damages  for 
lost  cattle  had  been  estimated  in  the  same  manner  as 
upon  a  total  destruction  of  cargo  at  sea  in  collision 
cases,  viz. :  the  market  value  of  the  articles  at  the 
place  of  shipment,  with  interest  and  expenses  of  trans- 
portation, it  was  held  that  the  advanced  freight  could 
also  be  recovered. 

In  respect  to  carriers  by  rail  it  is  difficult  to  formu- 
late any  general  rule  as  to  the  recovery  of  prepaid 
charges  in  case  of  loss. 

In  Northern  Transportation  Co.  v.  McClary,  66  111., 
233,  where  the  owner  of  flour  at  Janesville,  Wis., 
shipped  the  flour  to  Barton's  landing,  Vt.,  prepaying 
the  freight  as  far  as  Chicago,  it  was  held  that  the 
freight  from  Janesville  to  Chicago  formed  a  portion 
of  the  market  value  of  the  property  at  the  point  of 
its  destination,  and  should  not  be  added  to  such  value 
in  determining  the  amount  of  damages  in  an  action 
against  the  carrier  for  failure  to  deliver. 

The  reason  of  the  rule  that  freight  prepaid  cannot 
be  recovered  where  the  goods  have  a  market  value  at 
destination  is  well  stated  in  Ry.  Co.  v.  Ball,  80  Tex.,  602, 
16  S.  W.,  441  (1891): 

"Where  the  recovery  is  based  on  the  value  of 
the  goods  at  the  point  of  destination,  the  freight 
charges  should  be  deducted,  if  not  paid,  and  if 
paid,  then,  of  course,  the  value  of  the  property, 
without  reference  to  the  charges,  is  the  criterion. 
Railway  Co.  v.  Fagan,  72  Tex.,  132 ;  9  S.  W.  Rep., 
749.  The  object  of  the  law  is  to  give  compensa- 
tion for  the  injury,  and  no  more.  The  carrier  is 
compelled  to  pay  the  enhanced  value  of  the  prop- 
erty at  the  place  of  delivery.  The  owner,  there- 


816 

fore,  in  recovering  this  value  at  the  terminal  point, 
received,  in  substance  and  effect,  the  benefits  of 
the  transportation,  as  fully  as  if  the  goods  had 
been  transported  and  delivered  to  him,  in  which 
event  he  would  have  been  bound  to  pay  the  cost 
of  transportation.  For  these  reasons,  perhaps,  in 
cases  like  the  present,  the  law  gives  the  carrier 
the  benefit  of  the  freight  charges  in  assessing  the 
damages. ' ' 

But  this  qualification  to  the  rule  should  be  added  as 
stated  in  M.  D.  Ry.  Co.  v.  Barnes,  2  Tex.,  Civ.  App., 
Cas.  580  (1885) :  ' 

"It  is  only  when  the  plaintiff  recovers  against 
the  carrier  the  value  of  the  goods  at  the  point  of 
their  destination  that  the  freight  unpaid  is  to  be 
deducted  in  estimating  the  damages." 
I  am  of  the  opinion,  therefore,  in  respect  to  the  re- 
covery of  the  prepaid  charges,  that  if  the  goods  lost 
have  a  market  value  at  the  place  of  destination,  that 
value  is  the  amount  of  liability,  and  charges  prepaid 
cannot  be  recovered.    If,  however,  there  is  no  market 
value  at  destination,  and  the  value  is  recovered  as  at 
the   place   of   shipment,   or   by   special   contract   the 
amount  of  loss  to  be  ascertained  at  place  of  shipment, 
then  prepaid  charges  can  be  recovered.    The  express 
receipt  in  question  contains  no  provision  that  the  value 
of  the  property  in  case  of  loss  shall  be  computed  at 
the  place  of  shipment.     But  it  is  to  be  noted  that  in 
many  bills  of  lading  in  use,  and  in  the  proposed  Uni- 
form Bill  of  Lading,  there  is  the  following  provision: 
''The  amount  of  any  loss  or  damage  for  which 
any  carrier  becomes  liable  shall  be  computed  at 
the  value  of  the  property  at  the  place  and  time  of 
shipment  under  this  bill  of  lading,"  etc. 
In  Davis  v.  N.  Y.  &  S.  W.  Ry.  Co.,  70  Minn.,  37 
(1897),  an  action  was  brought  to  recover  damages  for 
injuries  to  goods  shipped.    The  bill  of  lading  contained 
the  above  condition.    The  court  held  that  the  condition 
was  a  reasonable  one,  and  that  there  was  nothing  in 
the  condition  'which  excluded  from  a  computation  of 
damages   charges   paid   or   incurred,    and   that    such 


817 

charges,  paid  or  unpaid,  may  be  taken  into  considera- 
tion when  fixing  damages. 

In  /.,  B.  &  W.  Ry.  Co.  v.  Strain,  81  111.,  504,  506,  the 
court  said: 

''All  the  evidence  as  to  the  value  of  the  hogs 
was,  what  they  sold  for  at  Pittsburg.  It  is  claimed, 
that,  under  an  express  provision  of  the  contract, 
the  value  at  the  date  and  place  of  shipment  was 
to  govern.  It  is  insisted,  on  the  other  hand,  that 
the  provision  does  not  apply  to  such  a  shipment 
as  this  one.  Without  considering  whether  it  does 
or  not,  the  evidence  of  value  at  the  place  of  des- 
tination tended  to  prove  the  value  at  the  place  of 
shipment.  There  was  no  evidence  going  to  show 
any  difference  of  value  at  the  two  places.  The 
through  freight  to  Pittsburgh  on  the  whole  car 
load  had  been  paid.  We  could  not  say  that,  under 
the  evidence,  the  jury  were  not  warranted  in  find- 
ing the  value  to  be  at  the  place  qf  shipment 
what  it  was  testified  to  as  being  at  the  place  of 
destination." 

If,  therefore,  the  value  at  the  place  of  shipment  is 
to  govern  under  the  bill  of  lading,  and  charges  are 
prepaid,  then,  in  event  of  loss,  I  am  of  the  opinion  that 
those  charges  can  be  recovered.  In  estimating  the 
value  of  the  goods  at  the  place  of  destination,  of  course, 
the  amount  of  express  charges  may  be  shown  as 
entering  into  and  forming  part  of  the  value. 


OPINION  OF  MR.  LEVY  MAYER,  GENERAL  COUNSEL,  IN  REF- 
ERENCE TO  THE  ASSIGNMENT  OF  WAGES  UNDER  THE 
ILLINOIS  LAW  OF  1905. 

(Stromberg,  Allen  &  Co.,  March  27,  1906.) 
Stromberg,  Allen  &  Co.  ask  an  opinion  in  reference 
to  an  assignment  of  wages  executed  by  one  of  its  em- 
ployes. The  general  subject  of  the  inquiry  is  covered 
by  my  opinion  to  the  Association  under  date  of  Feb- 
ruary 1,  1905,  in  answer  to  the  query  of  Goss  Printing 
Press  Company.  To  that  opinion  I  refer. 


818 

Since  that  opinion  was  given  the  legislature,  on  May 

13,  1905,  regulated  the  subject  of  assignment  of  wages. 

(Sess.  L.,  No.  905,  pp.  79-80.)    Section  one  of  that  Act 

provides : 

"No  assignment  of  the  wages  or  salary  of  any 
person  shall  be  valid,  so  as  to  vest  in  the  assignee 
any  beneficial  interest,  either  at  law  or  in  equity, 
unless  such  assignment  shall  be  in  writing,  signed 
by  the  assignor  and  acknowledged  in  person 
by  the  assignor  before  a  justice  of  the  peace  in  and 
for  the  township  in  which  the  assignor  resides, 
and  entered  by  such  justice  upon  his  docket,  and 
unless  within  three  days  from  the  date  of  the  exe- 
cution and  acknowledgment  of  such  assignment,  a 
true  and  complete  copy  of  said  assignment  and 
of  the  certificate  of  its  acknowledgment  shall  be 
served  upon  the  person,  firm  or  corporation  from 
whom  such  wages  or  salary  is  due  or  is  to  become 
due,  in  the  same  manner  that  the  summons  in 
chancery  is  now  required  by  law  to  be  served. 
Provided,  further,  that  no  assignment  of  wages 
or  salary  by  a  married  person  shall  be  valid  unless 
the  same  is  also  executed  and  acknowledged  as 
above,  by  the  assignor's  wife  or  husband,  as  the 
case  may  be." 
Sections  3  and  4  provide : 

"Whenever  any  assignment  of  the  wages  or 
salary  of  any  person  or  persons  shall  be  given  as 
security  for  a  loan  tainted  with  usury,  or  shall  be 
given  to  secure  the  payment  or  fulfillment  of  a 
usurious  contract  or  the  payment  of  the  principal 
or  the  interest  of  a  usurious  debt,  such  assignment 
shall  be  absolutely  void. 

Every  assignment   of  wages  to  be   earned  in 

whole  or  in  part  more  than  six  (6)  months  from 

and  after  the  making  of  such  assignment  shall  be 

absolutely  void." 

Section  5  relates  to  the  issuance  of  injunctions  to 

enforce  the  provisions  of  the  act. 

In  the  communication  from  the  Stromberg,  Allen  & 

Co.  it  is   stated  that  the  assignment  of  wages  was 


819 

"executed"  by  the  debtor  and  his  wife  under  a  power 
of  attorney.  If  it  is  meant  by  this  statement  that  the 
assignment  was  acknowledged  before  a  justice  of  the 
peace  under  the  power  of  attorney,  I  am  inclined  to 
the  opinion  that  the  assignment  is  void,  inasmuch  as 
the  law  requires  that  the  acknowledgement  be  made  "in 
person,"  and  this  would  probably  preclude  an  ac- 
knowledgment by  power  of  attorney.  Again,  as  I  un- 
derstand the  facts,  the  wages  in  question  were  earned 
more  than  six  months  from  the  making  of  the  assign- 
ment. Under  Section  4  of  the  Act  of  1905  this  would 
render  the  assignment  wholly  ineffective.  Irrespective 
of  the  Act  of  1905,  however,  the  assignment  is  void 
for  the  reason  that  it  was  not  given  under  a  subsisting 
employment.  The  authorities  upon  this  point  are  re- 
ferred to  in  my  prior  opinion. 

Under  the  Act  of  1905  courts  of  equity  are  given 
power  to  restrain  the  enforcement  of  an  assignment 
which  has  not  been  executed  and  acknowledged  in  ac- 
cordance with  the  Act,  irrespective  of  whether  or  not 
the  complainant  has  an  adequate  remedy  at  law.  This 
in  my  opinion  is  probably  the  most  expeditious  way  to 
have  the  validity  of  the  assignment  speedily  and  finally 
determined. 


NOTE: — A  bill  in  equity  was  thereafter  filed  on  April  14,  1906,  and 
an  injunction  issued  by  Judge  Honore  restrained  the  prosecution  of  any 
actions  at  law  upon  the  assignment  referred  to  in  the  foregoing  opinion. 
Judge  Honore  held  both  the  assignment  and  power  of  attorney  void. 
(Stromberg  Allen  fy  Co.  V.  Hill,  Circuit  Court  of  Cook  County,  Gen.  No. 
271,055.)— Ed. 


DEMUREAGE  OF  CAR-SERVICE  CHARGES  OF  CARRIERS  AND  THE 
RIGHT  OF  CARRIERS  TO  ASSESS  SUCH  CHARGES  ON  PRIVATE 
CARS. 

(Western  United  Gas  &  Electric  Company,  March  27, 

1906.) 

"Will  you  kindly,  at  your  convenience,  obtain 
an  answer  for  us  to  the  following  questions,  or  .if 
they  have  been  taken  up  and  answered  before  send 
us  the  report  of  same : 


1.  Has  a  railroad  company  the  right  to  charge 
demurrage  on  private  cars  standing  on  private 
switch  tracks? 

2.  If  a  railroad  treats  private  cars  the  same 
as  railroad  owned  cars  as  to  demurrage,  has  the 
railroad  the  right  to  insist  that  the  recipient  of 
private  cars  loaded  must  bill  them  out  when  made 
empty,  and  be  responsible  for  any  loss  of  time 
in  demurrage  in  making  such  billing ;  no  such  bill- 
ing  being   required   in   case   of   railroad   owned 
cars?'* 

The  law  is  now  well  settled  that  a  carrier  has  the 
right  to  make  reasonable  demurrage  or  car  service 
charges,  and  to  enforce  a  lien  on  the  goods  shipped  for 
the  payment  of  such  charges. 

Schumacher  v.  C.  &  N.  W.  Ey.  Co.,  207  111., 

199,  69  N.  E.,  825  (1904). 
C.  P.  &  St.  L.  R.  R.  Co.  v.  Dorsey  Fuel  Co., 

112  App.,  382  (1904). 
C.,  C.,  C.  &  St.  L.  R.  R.  Co.  v.  Probst  Lumber 

Co.,  114  111.  App.,  659  (1904). 
Purcell  v.  P.  C.  C.  C.  &  St.  L.  R.  Co.,  2  111., 

C.  C., 

Millers'  Assn.  v.  P.  &  R.  Ry.  Co.,  8  Inter. 

Comm.  Eep.,  531  (1900). 
Blackman  v.  Southern  R.  Co.,  10  Inter.  Comm. 

Eep.,  352  (1904). 
Kehoe  v.  C.  &  W.  C.  Ry.  Co.,  11  Inter.  Comm. 

Rep.,  531  (1905). 
Construction  Co.  v.  R.  R.  Co.,  121  Ala.,  621 

25  So.,  579  (1899). 
So.  R.  R.  Co.  v.  Lockwood  Mfg.  Co.,  (Ala.),  37 

So.,  667,  68  L.  E.  A.,  227  (1904). 
Miller  v.  R.  R.  Co.,  88  Ga.,  563,  15  S.  E.,  316 

18  L.  E.  A,  323  (1891). 
Penn.  Steel  Co.  v.  R.  R.  &  Banking  Co.,  94 

Ga.,  636,  21  S.  E.,  577  (1894). 
Dixon  v.  Central  of  Ga.  R.  Co.,  110  Ga.,  173, 

35  S.  E.,  369  (1900). 
Kentucky  Wagon  Co.  v.  Ohio  &  C.  Ry.  Co., 

98  Ky.,  152,  32  S.  W.,  595,  36  L.  E.  A.,  850 

(1895). 


821 

Miller  v.  Mansfield,  112  Mass.,  269  (1873). 
R.  R.  Co.  v.  George,  82  Miss.,  710,  35  So.,  193 

(1903). 
Yazoo  &  C.  R.  Co.  v.  Searles  (Miss.),  37  So., 

939,  68  L.  E.  A.,  715  (1905). 
Owen  v.  R.  R.  Co.,  83  Mo.,  454,  464  (1884). 
McGee  v.  Ry.  Co.,  71  Mo.  App.,  310,  314  (1897). 
Darlington  v.  R.  R.  Co.,  99  Mo.  App.,  1,  72 

S.  W..  122  (1902). 
R.  R.  Co.  v.  Midvale  Steel  Co.,  201  Pa.  St., 

624,  51  Atl.,  313  (1902). 
Swan  v.  L.  &  N.  R.  R.  Co.,  106  Tenn.,  229,  61 

S.  W.,  57  (1901). 
T.  &  N.  0.  R.  R.  Co.  v.  Kolp,  (Texas),  88  S. 

W.,  417  (1905). 
R.  R.  Co.  v.  Adams,  90  Va.,  393,  18  S.  E.,  673, 

22  L.  E.  A.,  530  (1894). 
R.  R.  Co.  v.  Commonwealth,  102  Va.,  599,  46 

S.  E.,  911  (1904). 
Carrington  v.  London  &  N.  W.  Ry.   (1905), 

2  K.  B.,  437. 

In  Nicollette  Lumber  Co.  v.  People's  Coal  Co.,  62 
Atl.,  1060  (Perm.,  Jan.  2,  1906),  it  was  held  that 
although  a  carrier  can  charge  demurrage,  it  has  no 
lien  on  the  goods  for  demurrage  charges,  citing  as 
authority,  C.  &  N.  W.  Ry.  v.  Jenkins,  103  111.,  588,  a  case 
which  is  overruled  in  Schumacher  v.  C.  &  N.  W.  Ry., 
207  111.,  199,  212. 

And  it  has  been  held  that  car  service  associations, 
which  are  combinations  of  various  railroad  lines  for 
the  purpose  of  collecting  and  enforcing  uniform  de- 
murrage charges,  are  not  illegal  combinations. 

Yazoo  &  Miss.  V.  Ry.  Co.  v.  Searles,  37  So., 

939  (Miss.,  Feb.,  1905). 
Ky.  Wagon  Co.  v.  Ohio  &  C.  Ry.  Co.,  98  Ky., 

152,  32  S.  W.,  595,  36  L.  R.  A.,  850. 
Miller  v.  R.  R.  &  Banking  Co.,  88  Ga.,  563, 

15  S.  E.,  316,  18  L.  B.  A.,  323. 

In  several  of  the  States  there  are  statutes  regulat- 
ing demurrage  charges,  and  in  Missouri  and  Oklahoma 
comprehensive  laws  on  the  subject  exist. 

Connecticut  (Statutes  1902,  Sees.  3774,  3775). 


822 

Georgia  (Code  1895,  Sees.  2206-2209). 
Missouri  (Laws  of  1905,  page  109). 
Oklahoma  (Session  Laws  of  1905,  page  143). 
In  Swan  v.  L.  &  N.  R.  R,  Co.,  106  Tenn.,  229,  61  S. 
W.,  57  (1901),  it  is  said: 

11  If  a  road  can  not  make  a  reasonable  charge 
for  detention  of  its  cars  by  consignees,  it  is  evi- 
dent that  such  consignees  may  delay  unloading 
until  virtually  the  entire  rolling  stock  of  the  road 
may  be  tied  up,  and  its  traffic  obstructed  by  loaded 
cars,  awaiting  the  pleasure  or  convenience  of  con- 
signees. We  can  see  no  reason  why  carriers  should 
not  be  entitled  to  reasonable  compensation  for  the 
unreasonable  delay  and  detention  of  their  cars  by 
consignees. ' ' 

In  Ky.  Wagon  Mfg.  Co.  v.  Ohio  &  Miss.  V.  Ry.  Co., 
98  Ky.,  152,  the  court  held  that  prompt  delivery  and 
transporting  of  freight  could  not  be  had  by  railroads 
"if  their  rolling  stock  may  be  tied  up  and  waterlogged 
upon  the  private  sidetracks  and  switches  of  consignees 
to  serve  as  store  rooms  and  warehouses  for  their 
freight,"  and  "how  can  they  furnish  cars  and  trans- 
portation to  shippers  in  general,  and  discharge  the 
volume  of  traffic  business  of  their  respective  systems, 
if  their  rolling  stock  can  be  locked  up  in  the  private 
yards  of  special  consignees!" 

And  in  Y.  &  M.  R.  R.  Co.  v.  Searles,  37  So,,  939 
(Miss.),  the  court  held  that  the  rule  in  the  bill  of  lad- 
ing imposing  demurrage  charges  would  be  binding 
upon  consignees  even  if  in  fact  they  were  ignorant 
of  such  a  charge. 

The  Interstate  Commerce  Commission  In  re  Trans- 
portation of  Frwit,  10  I.  C.  C.  Rep.,  360,  held  that  it 
was  the  duty  of  the  respondent  railroad  companies, 
engaged  as  common  carriers  in  transporting  fruits 
from  points  in  Michigan,  to  furnish  refrigerator  cars 
for  such  service,  and  that  a  railroad  company  may  pro- 
vide refrigerator  cars  by  purchase  or  lease,  and  if  the 
latter  plant  is  adopted  they  may  make  contracts  with 
one  company  which  excludes  the  use  of  cars  owned  by 
other  companies. 

The  use  of  private  cars  at  the  present  time  may  be 


823 

divided  into  two  general  classes:  (1)  Those  in  which 
the  property  of  the  owner  of  the  car  is  transported 
and  (2)  those  in  which  the  owner  is  not  interested  in 
the  contents  of  the  car.  In  the  first  class  the  shipper 
owns  the  car,  and  the  car  is  ordinarily  only  used  for 
the  carriage  of  the  property  of  the  owner.  In  the  sec- 
ond class,  the  cars  are  usually  owned  by  some  private 
car  company,  which  constructs  or  purchases  the  car, 
keeps  it  in  repair,  and  leases  it  to  the  railroad  com- 
pany. 

Report  of  Interstate  Commerce  Commission 
(1904),  page  10. 

As  to  whether  demurrage  charges  can  be  assessed 
by  the  carriers  for  detention  of  private  cars  upon  pri- 
vate switch  tracks,  will  depend  upon  whether  the  pri- 
vate car  falls  within  the  first  or  second  of  these  classes, 
and  upon  the  terms  of  the  contract  of  the  private  car 
owner  with  the  carrier.  If  the  private  car  is  one  ii} 
which  the  property  of  the  owner  is  carried  and  the 
owner  pays  all  charges  of  carriage  and  the  car  is  de- 
livered upon  the  private  tracks  of  his  consignee,  then 
I  am  of  the  opinion  that  no  demurrage  charge  can  be 
collected  by  the  carrier.  On  the  other  hand,  if  the  pri- 
vate car  is  one  which  is  leased  to  the  carrier  or  is  one 
which  the  carrier  transports  and  pays  mileage  therefor, 
the  connection  of  the  owner  with  the  car  ceases  when 
it  is  furnished  to  the  railroad  company.  The  railroad, 
in  the  use  of  the  car,  controls  it  exactly  as  it  would 
its  own  car,  and  pays  compensation  therefor.  Then  the 
railroad  is  entitled  to  collect  demurrage  charged  for 
the  detention  of  the  car  even  upon  private  sidetracks. 
Where  the  private  car  is  operated  by  an  independent 
company  under  the  terms  of  a  contract  with  the  rail^ 
road,  demurrage  charges  may  still  be  collected  by  the 
railroad ;  the  consignee  paying,  in  that  event,  a  charge 
incident  to  transportation. 

In  Truck  Farmers'  Assn.  v.  N.  E.  R.  R.  Co.,  6  I.  C. 
C.  Rep.,  295  (s.  c.  74  Fed.,  70;  83  Fed.,  611),  it  was 
held  by  the  Interstate  Commerce  Commission,  that 
where  a  carrier  pays  mileage  for  a  car  which  it  em- 
ploys in  the  service  of  the  shipper,  it  is  the  carrier, 
and  not  the  party  or  company  from  whom  the  car  is 


824 

rented  who  furnished  the  car  to  the  shipper,  and  in 
such  case  there  is  no  privity  of  contract  between  the 
car  owner  and  the  shipper. 

As  to  the  billing  out  of  private  cars  when  empty,  if 
the  car  falls  within  the  first  class  above  mentioned,  I 
am  of  the  opinion  that  billing  may  be  required ;  but  if 
the  car  is  of  the  second  class  above  mentioned,  I  am 
of  the  opinion  that  the  carrier  can  not  require  them  to 
be  billed  out.  If  the  carrier  does  so  it  will  constitute 
unjust  discrimination  and  may  be  enjoined  from  so 
doing. 

NOTE: — See,  also  opinion  of  April  20,  1907  (Block-Pollack  Iron 
Co.)  as  to  the  right  of  a  railroad  to  refuse  to  switch  shipments  to 
private  tracks  on  account  of  unpaid  demurrage  charges  on  other  ship- 
ments, as  provided  by  its  car-service  or  demurrage  rules. 

Since  the  giving  of  the  above  opinion  the  legislatures  of  ten  states 
have  passed  comprehensive  statutes  regulating  demurrage  charges. 
Eeciprocal  demurrage  laws  were  passed  in  1907  in  the  states  of  Ala- 
bama, Colorado,  Indiana,  Kansas,  Minnesota,  Missouri,  Oregon,  South 
Dakota,  Texas  and  Washington. — Ed. 


WHO  SHOULD  SUSTAIN  LOSS  OF  GOODS  IN  TRANSIT  WHEN 
BILL  OF  LADING  IS  ISSUED  BY  CARRIER  BEFORE  GOODS  ARE 
RECEIVED  BY  IT. 

(Spielmann  Bros.  Company,  March  27,  1906.) 

"On  August  24th  last  we  delivered  to  the  Mer- 
chants' Lighterage  Company  100  barrels  cider 
vinegar  consigned  to  Burlington,  Iowa,  via  the  C., 
B.  &  Q.  B.  R.,  who  issued  a  bill  of  lading  before 
receiving  the  goods  from  the  lighterage  company, 
whose  lighterage  boat  sank  with  the  consignment 
of  vinegar. 

"The  lighterage  company  having  filed  a  bill  in 
the  United  States  Court  limiting  their  liability; 
also  claim  to  only  be  agent  of  the  railroad  com- 
pany. Whom  are  we  to  look  for  payment  of  our 
customer's  claim,  we  having  purchased  f.  o.  b. 
Chicago  and  paid?" 

Inasmuch  as  the  vinegar  was  sold  f.  o.  b.  Chicago, 
the  title  passed  to  the  consignee,  and  the  loss,  if  any, 
would  fall  upon  him  in  the  absence  of  an  express  con- 
tract to  the  contrary. 


825 

Section  18  of  the  Act  of  June  26, 1884,  provides : 

"That  the  individual  liability  of  a  ship-owner 
shall  be  limited  to  the  proportion  of  any  or  all 
debts  and  liabilities  that  his  individual  share  of 
the  vessel  bears  to  the  whole;  and  the  aggregate 
liabilities  of  all  the  owners  of  a  vessel  on  account 
of  the  same  shall  not  exceed  the  value  of  such  ves- 
sel and  freight  pending." 

(23  Stat.  L.,  57;  4  Fed.  Stat.  Ann.,  p.  852.) 
And  section  4289  of  the  U.  S.  Rev.  Stat.  (4  Fed.  Stat. 
Ann.,  p.  852)  provides  that  the  section  above  quoted 
shall  apply  to  all  vessels  used  on  lakes  and  rivers  or 
inland  navigation,  including  canal  boats,  barges,  and 
lighters. 

Under  these  statutory  provisions  the  liability  of  the 
Lighterage  Company  is  limited  to  the  value  of  the 
sunken  boat. 

The  facts  furnished  me  are  not  sufficient  to  deter- 
mine whether  the  Lighterage  Company  is  the  agent  of 
the  Vinegar  Company  or  of  the  Railroad  Company. 
If  the  charges  of  th.e  Lighterage  Company  were  paid 
by  the  Vinegar  Company  under  a  separate  contract 
and  the  Railroad  Company  had  no  connection  with 
the  Lighterage  Company  except  to  receive  the  vinegar 
from  it,  then  the  Railroad  Company  would  not  be 
liable  for  the  loss  of  the  goods.  A  different  question 
is  presented  if  the  Lighterage  Company  is  the  agent  of 
the  Railroad  Company.  In  such  a  case  the  Railroad 
Company  would  probably  be  liable  for  the  loss,  unless 
there  is  a  limitation  of  such  liability  in  the  bill  of  lad- 
ing. It  is  the  universal  custom  among  the  railroads 
where  the  carriage  of  goods  is  partly  by  rail  and  partly 
by  water,  to  provide  in  the  bill  of  lading  that  the  rail- 
road company  will  not  be  responsible  for  marine  risks. 
If  such  a  limitation  appears  in  the  bill  of  lading  in  the 
present  case,  a  different  question  will  be  presented. 

The  question  is  also  complicated  by  the  fact  that  the 
Railroad  Company  in  the  present  case  issued  a  bill  of 
lading  without  receiving  the  goods.  The  receipt,  how- 
ever, is  not  conclusive  and,  according  to  the  weight  of 
authority,  it  may  be  shown  that  the  carrier  never  re- 
ceived the  goods. 


826 

Again,  the  agent  of  the  carrier  can  issue  bills  of  lad- 
ing without  receiving  the  goods  only  when  he  has  au- 
thority to  do  so. 

Hutchinson  on  Carriers,  2nd  Ed.,  Sees.  122, 

123,  124. 

In  L.  8.  &  M.  S.  Ry.  Co:  v.  Live  Stock  Bank,  178  111., 
508,  518,  519,  the  court  said: 

"A  bill  of  lading  is  both  a  receipt  and  a  con- 
tract, and  the  receipt  of  the  goods  for  carriage  is 
the  basis  of  the  contract  of  carriage.  If  no  goods 
are  received  for  carriage  there  can  be  nothing  on 
which  the  contract  of  carriage  can  be  based,  as  the 
duties  and  obligations  of  the  carrier  with  respect 
to  the  goods  must  commence  with  their  delivery  to 
him  in  a  manner  that  puts  upon  him  the  exclusive 
duty  of  seeing  to  their  safety.  Like  all  receipts, 
such  bills  of  lading,  so  far  as  they  are  receipts, 
may  be  explained,  modified  or  contradicted  by 
parol  proof.  Bissell  v.  Price,  16  111.,  408 ;  Hutchin- 
son on  Carriers,  par.  122;  Illinois  Central  Rail- 
road Co.  v.  Cobb,  72  111.,  148;  Wingate  v.  Allen, 
103;  Strong  v.  Grand  Trunk  Railway  Co.,  15 
Mich.,  205 ;  Dean  v.  King,  22  Ohio  St.,  118. 

In  the  later  case  it  was  held:  'The  execution 
of  the  bill  of  lading  by  the  chief  clerk  of  the  boat, 
which  purported  to  cover  the  twenty  bales  in  dis- 
pute, being  admitted,  and  it  being  conceded  that 
they  were  not  delivered  to  the  consignees  as  per 
bill  of  lading,  a  prima  facie  case  was  made  for  the 
plaintiffs  below.  Then  as  to  the  matters  of  de- 
fense: First,  was  it  competent  for  defendants  to 
show,  by  parol  testimony,  that  the  cotton  in  con- 
troversy had  not  been  received  by  the  boat,  and 
thus  contradict  the  terms  of  the  bill  of  lading! 
Certain  it  was,  and  for  two  reasons:  (1)  In  so 
far  as  the  bill  of  lading  was  a  mere  receipt  for 
freight  it  was  clearly  subject  to  explanation  by 
parol  testimony  (4  Ohio,  334,  28  N.  Y.,  598 ;  5  Seld., 
31;  Abb.  Abm.,  196) ;  and  (2)  officers  of  a  vessel 
engaged  in  the  business  of  a  common  carrier  have 
no  presumed  authority  to  issue  bills  of  lading  for 


827 

freight  not  on  board  the  vessel  or  not  delivered  to 
some  one  authorized  to  receive  freight,  and  if  the 
bill  of  lading  be  issued  without  authority  the  own- 
ers are  not  bound  thereby.  (18  How.  S.  C.,  191;  7 
Blatch,  C.  C.,  246;  18  Eng.  L.  &  E.,  551;  3  Allen, 
107;  2  Wxch.,  274;  8  id.,  333;  11  Mass.,  99;  10 
Com.  B.,  687).  Nor  is  there  anything  in  the  facts 
of  this  case  which,  under  the  doctrine  of  estoppel 
in  pals,  precluded  the  defendants  below  from 
showing  that  the  goods  in  question  had  not  been 
shipped  on  their  boat,  or  from  denying  their  lia- 
bility for  not  delivering  them  to  the  consignee.'  " 
See,  also : 

Tibbetts  v.  Ey.  Co.,  49  111.  App.,  567. 
A  different  question  may  arise  where  the  rights  of  a 
third  person  are  involved,  but  no  such  question  arises 
here. 

In  L.  S.  &  M.  S.  Ey.  Co.  v.  Live  Stock  Bank,  supra, 
the  court  said: 

"There  is  no  question  here  between  the  carrier 
and  the  third  persons,  even  if  that  would  effect  a 
different  result,  which  we  have  not  before  us  on 
this  record.     The  carrier  had  a  right  to  show  in 
defense  it  received  no  cattle  for  shipment  from 
appellee.    There  is  an  entire  failure  of  proof  show- 
ing it  did.    Where  it  appears  no  goods  have  been 
received  by  the  carrier  for  shipment  and  a  bill  of 
lading  has  been  signed  by  the;  carrier's  agent,  it 
is  susceptible  of  explanation,  and  if  no  goods  were 
received  it  does  not  bind  the  carrier.    Pollard  v. 
Vinton,  105  U.  S.,  7;  Friedlander  v.  Texas  Rail- 
way Company,  130  id.,  417;  Baltimore  &  Ohio 
Railroad  Co.  v.  Wilkins,  44  Md.,  11." 
I  am  of  the  opinion,  therefore,  that  in  the  present 
case  the  Eailroad  Company  is  not  liable  unless  the 
Lighterage  Company  acted  as  its  agent  as  above  in- 
dicated, and  even  this  liability  may  be  limited  by  the 
express  terms  of  the  bill  of  lading.    There  are  not  suffi- 
cient facts  submitted  for  me  to  say  who  is  liable. 


828 


WHETHER  PRINCIPAL  AND  GUARANTOR  CAN  BE  SUED  JOINTLY 
IN  THE  SAME  ACTION  UNDER  THE  LAW  OF  ILLINOIS. 

(E.  H.  Sargent  &  Co.,  March  27,  1906.) 

"We  would  appreciate  very  highly  Mr.  May- 
er's opinion  of  the  following  proposition:  From 
time  to  time  we  deliver  and  charge  merchandise 
on  open  account  to  one  person  upon  the  written 
guaranty  of  another,  rendering  invoice  as  well  as 
statements  to  the  person  to  whom  the  goods  are 
delivered.  Considering  our  guaranty  is  within 
the  statute  'frauds'  in  case  of  default,  is  it  pos- 
sible to  bring  in  the  same  suit  action  for  the  same 
amount  against  both  the  party  to  whom  the  goods 
are  delivered,  as  well  as  the  guarantor  I 

We  understood  a  while  ago  that  such  action  was 
not  possible,  the  plaintiff  being  obliged  to  exhaust 
his  remedy  upon  the  party  to  whom  the  goods  are 
delivered  and  then  proceed  under  the  guaranty, 
but  under  a  recent  Illinois  Statute,  we  under- 
stand that  both  parties  can  be  joined  in  the  same 
suit." 

The  undertaking  of  one  party  to  answer  for  the  pay- 
ment of  some  debt,  or  the  performance  of  some  duty, 
in  case  of  the  failure  of  another  person  who  in  the  first 
instance  is  liable,  is  a  contract  of  guaranty.  I  infer 
that  the  undertaking  referred  to  in  the  above  letter  is 
of  this  character.  The  agreement  between  Sargent  & 
Co.  and  the  consignee  is  a  contract  of  sale;  that  be- 
tween the  company  and  the  guarantor  is  a  separate 
and  distinct  contract  of  guaranty.  Persons  can  not 
be  sued  jointly  in  one  action  on  separate  contracts. 

In  this  respect  a  guarantor  and  his  principal  are  not 
jointly  liable  and  can  not  therefore  be  joined  as  de- 
fendants in  the  same  suit. 

Clark  v.  Morgan,  13  111.  App.,  597. 

Columbia  Hard  Wood  Lumber  Co.  v.  Langley, 

51  111.  App.,  100. 
Abbott  v.  Brown,  131  111.,  108. 

If,  however,  the  sale  of  goods  was  made  upon  joint 
credit,  that  is,  upon  the  promise  of  the  two  parties  to 


829 

pay  therefor,  though  the  property  is  purchased  for 
and  delivered  to  but  one,  the  legal  effect  as  between 
them  and  the  vendor,  is  a  sale  to  the  two  jointly.  In 
such  a  case  the  two  may  be  joined  as  defendants  by 
the  vendor  in  the  same  suit. 

Pingrey  on   Suretyship  and   Guaranty,   Sec. 

399. 

If  the  guarantee  is  an  absolute  one,  that  is,  if  the 
guarantor's  promise  to  pay  for  the  goods  is  not  made 
conditional  upon  the  happening  of  some  event  or  other- 
wise, then  as  soon  as  the  principal  is  in  default  the 
guarantor  is  also  in  default,  and  may  be  sued  immedi- 
ately. It  is  not  necessary  for  the  creditor  to  exhaust 
his  remedy  against  the  principal  before  proceeding 
under  the  guaranty. 

Eaton  v.  Hartli,  45  111.  App.,  355. 

Penny  v.  Crane  Bros.  Mfg.  Co.,  80  111.,  244. 

Brandt  on  Suretyship  and  Guaranty,  3d  Ed., 

Sec.  110. 

The  statute  to  which  reference  is  made  is  probably 
that  enacted  in  1895,  under  the  terms  of  which  the 
principal  and  the  guarantor  on  a  promissory  note  may 
be  joined  as  defendants  in  the  same  suit.  That  statute 
provides  as  follows : 

' '  Persons  severally  liable  upon  bills  of  exchange 
or  promissory  notes,  payable  in  money,  may  all 
or  any  of  them  severally  be  included  in  the  same 
suit  at  the  option  of  the  plaintiff,  and  judgment 
rendered  in  said  suit  shall  be  without  prejudice 
to  the  rights  of  the  several  defendants  as  between 
themselves."  (E.  S.,  Chap.  98,  Sec.  VII.) 


WHETHER  A  EAILEOAD  COMPANY  CAN  BENT  OE  LEND  PABT 
OF  THEIE  FEEIGHT  DEPOTS  TO  ONE  COEPOEATION  AND 
EEFUSE  TO  EXTEND  THE  SAME  PEIVILEGE  TO  ANOTHEE. 

(E.  L.  Hasler  Company,  May  2,  1906.) 

' '  Could  we  get  an  opinion  from  Mr.  Levy  Mayer 
as.  to  whether  a  railroad  company  has  the  right 
to  rent  or  lend  part  of  their  freight  depots  and 


830 

shed  to  one  corporation,  to  be  used  as  a  display 
room  and  a  public  auction,  the  location  of  these 
places  being  on  their  own  tracks  on  their  regular 
right  of  way  in  the  middle  of  the  city.  If  they 
have  this  right,  can  we  not  compel  them  to  give 
equal  privileges  to  other  shippers  1 ' ' 
us  the  report  of  same: 

In  Donovan  v.  Pennsylvania  Company,  199  U.  S., 
279  (November  27,  1905),  the  United  States  Supreme 
Court  held  that  the  Pennsylvania  Company,  having 
made  an  arrangement  with  the  Parmalee  Transfer 
Company  to  furnish  at  its  passenger  station  in  Chi- 
cago from  time  to  time  all  vehicles  necessary  for  the 
accommodation  of  passengers  arriving  there  on  its 
trains  or  on  the  trains  of  other  railroad  companies, 
may  legally  exclude  from  its  depot  grounds  or  passen- 
ger station  all  hackmen  or  expressmen  coming  to  either 
for  the  purpose  only  of  soliciting  for  themselves  the 
custom  or  patronage  of  passengers. 
The  court  said : 

"Although  its  functions  are  public  in  their  na- 
ture, the  company  holds  the  legal  title  to  the  prop- 
erty which  it  has  undertaken  to  employ  in  the 
discharge  of  these  functions.  And  as  incident  to 
ownership  it  may  use  the  property  for  the  pur- 
pose of  making  profit  for  itself;  such  use,  how- 
ever, being  always  subject  to  the  condition  that 
the  property  must  be  devoted  primarily  to  public 
objects,  without  discrimination  among  passengers 
and  shippers,  and  not  be  so  managed  as  to  defeat 
those  objects.  It  is  required  under  all  circum- 
stances to  do  what  may  be  reasonably  necessary 
and  suitable  for  the  accommodation  of  passengers 
and  shippers.  But  it  is  under  no  obligation  to 
refrain  from  using  its  property  to  the  best  advan- 
tage of  the  public  and  of  itself.  It  is  not  bound 
to  so  use  its  property  that  others,  having  no  busi- 
ness with  it,  may  make  profit  to  themselves.  Its 
property  is  to  be  deemed,  in  every  legal  sense, 
private  property  as  between  it  and  those  of  the 
general  public  who  have  no  occasion  to  use  it  for 
purposes  of  transportation." 


831 

And  held  also : 

t  <  rp^g  raiiroac[  company  was  not  bound  to  accord 
this  particular  privilege  to  the  defendants  simply 
because  it  had  accorded  a  like  privilege  to  the 
Parmalee  Transfer  Company,  for  it  had  no  con- 
tractual relations  with  the  defendants,  and  owed 
them  as  hackmen  no  duty  to  aid  them  in  their 
special  calling.     The  defendants  did  not  have  or 
profess  to  have  any  business  of  their  own  with 
the  company.    In  meeting  their  obligations  to  the 
public,  whatever  the  nature  of  those  obligations, 
the  defendants  could  use  any  property  owned  by 
them,  but  they  could  not,  of  right,  use  the  prop- 
erty of  others  against  their  consent." 
In  Old  Colony  R.  R.  Co.  v.  Tripp,  147  Mass.,  35 
(188),  it  was  held  that  a  railroad  corporation  may 
contract  with  one  to  furnish  the  means  to  carry  pas- 
sengers or  their  baggage  and  merchandise  from  its  sta- 
tions, and  may  grant  to  him  the  exclusive  right  there 
to  solicit  the  patronage  of  such  passengers;  and  such 
an  agreement  was  held  not  to  be  within  the  prohibition 
of  the  statute  expressly  requiring  railroad  company 
"to  give  to  all  persons  or  companies  reasonable  and 
equal  terms,  facilities  and  accommodations     *     *     * 
for   the   use   of   its    depot   and   other   buildings    and 
grounds." 

In  Ftuker  v.  R.  R.  Co.,  81  Ga.,  461,  8  S.  E.,  529,  a 
railroad  was  held  to  have  the  right  to  grant  to  one 
person  the  exclusive  privilege  of  using  its  grounds, 
etc.,  for  selling  lunches  or  soliciting  orders  for  the 
sales  of  lunches  to  passengers.    The  Court  there  said : 
"It  is  contended  that  the  company  has  no  such 
exclusive    domain    over    its    tracks    and    spaces 
embraced  in  its  right  of  way  as  to  entitle  it  to 
exclude  therefrom  any  person  entering  thereon 
in  an  orderly  manner  and  upon  lawful  business; 
and  especially  that  it  cannot  discriminate  against 
one  person  and  in  favor  of  another.    We  have  dis- 
covered no  authority  for  this  position,  either  in 
its   more   limited   or   more   extended   form.      On 
the  contrary,  it  would  seem  that  the  very  nature 


832 

of  property  involves  a  right  of  exclusive  dominion 
over  it  in  the  owner.  We  cannot  believe  that  there 
is  a  sort  of  right  of  common  lodged  in  the  public 
at  large  to  enter  upon  lands  on  which  railroads 
are  located,  and  over  which  they  have  secured  the 
right  of  way.  Such  lands  the  railroad  companies 
may  inclose  by  fences,  if  they  choose  to  do  so,  and 
exclude  any  and  all  persons  whomsoever.  Their 
dominion  over  the  same  is  no  less  complete  or 
exclusive  than  that  which  every  owner  has  over 
his  property." 
And: 

11  It  is  manifest  that  the  grant  of  the  privilege  to 
one  or  more  is  no  rightful  cause  of  complaint  on 
the  part  of  the  others  to  whom  a  like  privilege  is 
denied.  The  right  to  make  such  discrimination  is 
incident  to  the  ownership  of  all  property  which 
is  not  devoted  to  some  use  that  in  and  of  itself 
involves  an  invitation  to  the  public  to  enter  and 
enjoy  for  the  time  being." 

In  Barney  v.  Steamboat  Co.,  67  N.  Y.,  301,  it  was 
held  that  a  carrier  may  give  an  exclusive  privilege 
of  entering  upon  its  cars,  etc.,  to  solicit  the  carriage 
of  baggage  from  passengers.  The  court  said: 

"The  carrier,  however,  may  make  reasonable 
rules  and  regulations  for  the  conduct  of  its  busi- 
ness and  when  they  are  made  known,  passengers 
are  bound  to  observe  them.  He  may  carry  on,  in 
connection  with  his  business  of  carrier,  any  other 
business,  and  may  use  his  property  in  any  way  he 
may  choose  to  promote  his  interests,  not  incon- 
sistent with  the  duty  he  owes  to  passengers.  The 
vessel  or  vehicle  which  he  uses  is  his  own,  and 
except  to  the  extent  to  which  he  has  devoted  it 
to  public  use,  by  the  business  in  which  he  has  en- 
gaged, he  may  manage  and  control  it  for  his  own 
profit  and  advantage,  to  the  exclusion  of  all  other 
persons.  For  instance,  the  sale  of  books,  papers 
or  refreshments  are  common  incidents  to  the  busi- 
ness of  a  carrier  by  certain  modes  of  conveyance, 
and  the  carrier  may  avail  himself  of  the  oppor- 


833 

tunity  which  his  business  gives  him,  to  supply  the 
special  wants  of  travelers  in  these  and  other  re- 
spects, and  appropriate  to  himself  the  profits  of 
the  business  and  exclude  third  persons  from  en- 
tering the  car  or  vessel  to  carry  on  the  same  busi- 
ness, in  opposition  to  him.  He  may  grant  or  re- 
fuse the  privilege  at  his  option.  In  this  no  right 
of  a  passenger  is  invaded." 

In  Fort  Wayne  &  Chicago  Ry.  Co.  v.  Bingham,  29 
Ohio  St.,  364,  370,  it  is  said  that 

"for  all  purposes  not  connected  with  the  operation 
of  its  road,  the  right  of  the  company  to  the  ex- 
clusive use  and  enjoyment  of  the  corporate  prop- 
erty is  as  perfect  and  absolute  as  is  that  of  an 
owner  of  real  property  not  burdened  with  public 
or  private  easements  or  servitudes." 
It  is  to  be  noted,  however,  that  in  Pennsylvania  Com- 
pany v.  Chicago,  181  111.,  289,  301,  the  Supreme  Court 
of  this  State  said : 

"A  railroad  company  can  make  all  needful  rea- 
sonable rules  and  regulations  concerning  the  use 
of  its  depots  and  grounds  and  can  exclude  all  per- 
sons therefrom  who  have  no  business  with  the 
railroad  or  passengers  going  to  and  coming  from 
the  trains  or  depots,  and  it  probably  can  prohibit 
all  persons  from  soliciting  passengers  there  them- 
selves upon  its  premises,  but  it  cannot  arbitrarily 
admit  one  common  carrier  of  passengers  or  freight 
to  its  depot  or  grounds  and  exclude  all  others 
for  no  reason  than  that  it  is  for  its  own  private 
profit  or  pleasure.  Such  rules  and  regulations 
must  touch  and  affect  all  alike.  It  may  deter- 
mine the  distance  from  its  depot  or  track  at  which 
persons  soliciting  passengers  may  stand  while 
on  its  grounds,  but  this  determination  must  affect 
and  apply  to  all.  To  permit  a  railroad  company, 
upon  any  charge  except  of  wrong  or  misconduct 
on  the  part  of  persons  excluded,  to  allow  one  hack- 
man  or  line  of  hacks  to  occupy  a  place  on  its 
grounds  which  is  denied  to  another,  or  to  set 
apart  the  most  favorable  ground,  as  in  this  case, 


834 

to  one  company  and  to  exclude  the  others  there- 
from, would  be,  in  the  language  of  Justice  Field, 
in  Railroad  Company  v.  Tripp,  147  Mass.,  43,  Ho 
enable  a  railroad  corporation  largely  to  control 
the  transportation  of  passengers  and  merchandise 
beyond  its  own  lines,  and  to  establish  a  monopoly 
not  granted  by  its  charter,  which  might  be  solely 
for  its  own  benefit  and  not  for  the  benefit  of  the 
public.' 

But  the  sole  issue  in  that  case  was  to  the  validity 
of  certain  ordinances  of  the  city  of  Chicago  relating 
to  the  use  by  hackmen  of  the  public  streets  and  side- 
walks in  front  of  the  company's  station.  The  language 
quoted  is  dictum,  and,  I  am  of  the  opinion  does  not 
decide  the  facts  in  the  question  under  consideration. 

I  am  of  the  opinion,  therefore,  that  a  railroad  com- 
pany can  rent  or  lend  the  use  of  part  of  the  freight 
sheds  to  be  used  as  a  display  or  auction  room  by  one 
corporation,  and  can  lawfully  deny  the  same  privilege 
to  any  other  corporation.  The  use  of  the  facilities 
of  the  railroad  for  these  purposes  is  no  part  of  its 
public  business,  such  as  the  carriage  of  freight,  etc., 
and  the  carrier  while  thus  engaged  in  its  private  ca- 
pacity is  under  no  obligation  to  treat  all  alike. 

It  should  be  observed,  however,  that  a  carrier  might 
under  some  circumstances,  by  continuous  conduct,  hold 
itself  out .  as  furnishing  parts  of  its  warehouses  or 
freight  sheds  to  all  who  apply,  so  as  to  impress  its 
property  with  a  public  use  for  this  purpose,  and  be 
therefore  under  an  obligation  not  to  discriminate. 
(Munn  v.  Illinois,  94  U.  S.,  113.) 


THE    RIGHT    OF    A   TELEPHONE    SUBSCRIBER    TO    ATTACH    HIS 
OWN    INSTRUMENTS    TO    THE    WIRES    OF   THE    TELEPHONE 
COMPANY. 

(Aurora  Automatic  Machinery  Co.,  July  12,  1906.) 

That  company  states : 

"Our  contract  with  the  Chicago  Telephone  Com- 
pany for  desk  extension  service  expired  on  the 
7th  inst.  As  you  know,  we  have  to  pay  $30.00  per 


835 

year  for  each  extension  of  the  telephone  company, 
which  price  we  consider  exorbitant,  and  we  under- 
stand there  are  several  independent  concerns  that 
sell  extensions  complete  for  $20.00.  However,  we 
hesitate  about  purchasing  these  instruments  from 
independent  concerns  on  account  of  the  liability 
of  the  Chicago  Telephone  Company  entering  suit 
against  us,  or  cutting  off  our  telephone  service. 
If  you  can  give  us  any  information  on  the  subject 
it  will  be  greatly  appreciated." 

In  the  case  of  Gardner  v.  Providence  Telephone  Co. 
(Ehode  Island),  55  L.  E.  A.,  113,  it  was  held  that  a 
telephone  subscriber  had  no  right  to  attach  his  own 
equipment  to  the  instruments  of  the  telephone  com- 
pany and  that  if  he  did  so,  the  company  was  justi- 
fied in  depriving  the  subscriber  of  service  upon  re- 
fusal to  discontinue  the  use  of  such  equipment.  In 
that  case  the  subscriber  had  connected  his  own  exten- 
sion instruments  to  the  telephone  company's  equip- 
ment and  sought  an  injunction  restraining  the  com- 
pany from  discontinuing  the  service.  The  injunction 
was  denied.  The  court  said : 

"It  is  the  duty  of  the  company  to  keep  abreast 
of  the  march  of  improvement,  so  as  to  serve  its 
customers  as  conveniently  as  they  can  provide  for 
themselves  from  the  market.  Such  improvements 
and  extensions  as  are  offered  must  not  be  accom- 
panied with  extortionate  demands  for  compensa- 
tion, so  as  to  render  the  offer  nugatory.  The  price 
charged  for  the  extra  accommodation  must  bear 
some  proportion  to  the  actual  cost  of  it,  and  the 
additional  burden  of  care  and  maintenance.  While 
the  court  exercises  no  supervision  over  the  prices 
fixed  by  a  telephone  company  generally,  it  must 
consider  the  amount  charged  for  the  performance 
of  a  duty  to  a  customer,  in  deciding  upon  the  rea- 
sonableness in  any  particular  case  of  requiring  the 
customer  to  seek  such  service  exclusively  of  the 
company.  So  long  as  the  company  observes  these 
equitable  principles  in  acting  under  its  rule,  the 
court  will  consider  its  action  reasonable  and  will 
sustain  it.  If,  however,  the  company  neglects  its 


S36 

duty  to  the  public,  and  it  is  not  provided  with  the 
means  to  secure  the  accommodation  of  its  custo- 
mers, or,  having  at  its  command  such  appliances, 
refuses  to  furnish  them,  except  at  exorbitant  rates, 
we  can  not  question  the  right  of  the  customer  to 
supplement  the  imperfect  service  of  the  company 
with  approved  appliances  procured  elsewhere,  pro- 
vided that  such  appliances  can  be  used  in  connec- 
tion with  the  company's  circuits  without  detri- 
ment to  their  harmonious  operation.  We  think, 
however,  that  before  a  customer  is  justified  in 
such  an  invasion  of  the  prima  facie  rights  of  the 
company,  he  must  apply  to  the  company  to  fur- 
nish the  additional  accommodation  desired,  and 
if  the  company  refuses  or  couples  its  consent  with 
unreasonable  conditions,  he  must  be  prepared  to 
show  affirmatively  that  the  appliance  which  he  an- 
nexes to  the  company's  system  is  not  injurious  to 
the  system  or  its  operation  before  he  can  have  the 
assistance  of  a  court  of  equity  to  compel  the  com- 
pany to  include  his  device  in  their  service.  The 
complainant  does  not  bring  himself  within  these 
limitations." 

The  court,  therefore,  holds  in  effect  that  if  the  com- 
pany refuses  to  install  an  extension  telephone  except 
upon  the  payment  of  unreasonable  rates,  the  sub- 
scriber is  justified  in  installing  his  own  equipment. 

Some  time  ago  a  bill  was  filed  in  the  courts  of  this 
county  by  a  subscriber  of  the  Chicago  Telephone  Co. 
who  had  installed  his  own  equipment,  to  restrain  that 
company  from  discontinuing  the  telephone  service  of 
such  subscriber.  The  bill  alleged  that  the  telephone 
company  refused  to  install  extensions  except  upon  the 
payment  of  unreasonable  rates.  Judge  Windes  fol- 
lowed the  holding  of  the  Rhode  Island  Court  in  the 
Gardner  case,  supra,  and  granted  a  temporary  injunc- 
tion restraining  the  company  from  discontinuing  the 
service.  A  motion  to  dissolve  the  injunction  was  there- 
after made,  and  the  matter  was  heard  on  the  bill  and 
affidavits.  The  question  of  fact  as  to  the  reasonable- 
ness of  the  company's  rate  was,  however,  not  involved. 


837 

It  was  contended  by  the  telephone  company  that  the 
language  of  the  Rhode  Island  Court  in  reference  to 
the  right  of  the  subscriber  to  install  his  own  equipment 
when  the  telephone  company  refuses  to  furnish  such 
equipment  at  reasonable  rates,  was  mere  dicta  and  un- 
necessary to  the  decision  of  the  case,  and,  therefore, 
should  not  be  followed.  It  was  also  contended  that 
even  if  the  telephone  company  refused  to  furnish  the 
particular  equipment  at  reasonable  rates,  the  proper 
remedy  of  the  subscriber  was  to  compel  the  telephone 
company  to  furnish  such  equipment  by  mandamus  pro- 
ceedings and  not  for  the  subscriber  to  install  his  own 
equipment.  Judge  Windes,  however,  held  that  the 
language  of  the  Rhode  Island  Court  was  not  dicta,  and 
refused  to  dissolve  the  injunction.  The  attorneys  for 
the  telephone  company,  I  understand,  are  now  prepar- 
ing to  move  to  dissolve  the  injunction  upon  a  final 
hearing  upon  the  facts.  A  final  decision  may  there- 
fore be  expected  in  the  near  future. 

In  this  connection  it  may  be  noted  that  the  ordinary 
form  of  contract  used  by  the  Chicago  Telephone  Com- 
pany provides  that  the  lessee  shall  not  use  any  equips 
ment  or  apparatus  in  connection  with  the  company's 
wires  unless  the  same  is  furnished  by  the  telephone 
company.  I  am  of  the  opinion  that  the  subscriber 
should  and  will,  in  an  appropriate  proceeding,  succeed 
in  obtaining  final  relief  against  the  telephone  company, 
provided  that  the  subscriber  proves  that  the  price  asked 
by  the  telephone  company  for  extensions  is  excessive 
or  extortionate,  and  that  the  appliance  which  he  an- 
nexes "is  not  injurious  to  the  system  or  its  operation." 

NOTE: — Thereafter  the  case  was  heard  before  Judge  Windes  on 
the  facts  alleged  in  the  bill  and  in  the  answer  of  the  defendant  and 
evidence  was  heard.  The  court  decided  that  the  provision  in  the  sub- 
scriber 's  contract  with  the  telephone  company  that  the  subscriber  shall 
not  attach  foreign  equipment  to  his  telephone,  was  valid  and  binding 
and  the  subscriber  was  not  entitled  to  attach  such  equipment,  even 
though  the  telephone  company  exacts  unreasonable  charges  for  the  in- 
stallation thereof.  See  Beach  et  al.  v.  Chicago  Telephone  Co.,  1  111. 
C.  C.,  158.  The  case  is  now  pending  on  appeal  in  the  Appellate  Court. 
See,  also  Standard  Glass  Co.  v.  Chicago  Telephone  Co.,  2  111.  C.  C. — 
Ed. 


838 


IN  REFERENCE  TO  FILING  SCHEDULES  FOE  CAPITAL  STOCK 
TAX  IN  ILLINOIS,  IN  VIEW  OF  THE  ILLINOIS  LAW  OF  1905 
EXEMPTING  CAPITAL  STOCK  OF  CERTAIN  CORPORATIONS 
FROM  TAXATION. 

(Hunt,  Helm,  Ferris  &  Co.,  July  17,  1906.) 

"The  tax  assessor  is  around  again.  Last  year 
we  filed  our  Auditor's  Form  5.  The  assessor  has 
left  with  us  another  form  to  fill  out  this  year.  "We 
understand  that  it  is  not  necessary  for  us  to  fill 
out  this  form  this  year.  Is  our  understanding 
correct  ? ' ' 

I  assume  that  Auditor's  Form  No.  5  is  the  form  of 
schedule  relative  to  capital  stock  tax.  I  advise  that 
the  form  be  not  filled  out  this  year,  since  the  passage 
of  the  capital  stock  act  at  the  1905  session  of  the  legis- 
lature. The  constitutionality  of  the  law  in  question 
has  been  attacked  by  an  opinion  of  the  Attorney- 
General  of  Illinois,  rendered  June  11,  1906,  and  also  in 
a  case  recently  begun  in  the  Circuit  Court  at  Peoria. 
The  form,  in  my  opinion,  should  not  be  returned  until 
that  or  similar  litigation  has  been  finally  determined, 
and  then  only  if  against  the  law. 


THE  APPLICABILITY  OF  THE  WISCONSIN  FOREIGN  CORPORA- 
TION LAW  OF  1905  TO  INTERSTATE  COMMERCE  TRANSAC- 
TIONS. 

(Reid,  Murdoch  &  Co.,  July  17,  1906.) 
There  has  been  submitted  to  me  for  examination 
an  opinion  rendered  by  the  Attorney-General  of  Wis- 
consin to  the  Secretary  of  State,  of  that  State,  in  ref- 
erence to  its  foreign  corporation  law. 

The  Attorney-General  states,  in  substance,  that 
where  an  act  imposes  a  license  tax  upon  a  foreign  cor- 
poration and  such  corporation  carries  on  both  an  in- 
terstate and  intrastate  business  within  the  State,  that 
such  tax  does  not  constitute  a  burden  on  interstate 
commerce,  even  though  the  tax  is  measured  by  the  pro- 
portion of  the  company's  business  carried  on  within 
the  State,  including  interstate  commerce  transactions. 


839 

A  foreign  corporation  has  no  absolute  right  to  carry 
on  business  outside  of  the  State  of  its  creation.  The 
foreign  State  may  therefore  exclude  such  corporation 
entirely,  or  may  impose  such  conditions  upon  it  as  it 
sees  fit,  as  a  condition  of  its  doing  business  within  the 
State.  It  may  impose  a  tax  upon  its  entire  capital 
irrespective  of  what  proportion  is  used  in  the  State. 

I  am  therefore  of  the  opinion  that  a  State  has  the 
power  to  impose  a  license  tax  upon  a  foreign  corpora- 
tion based  upon  the  proportion  of  its  business  carried 
on  in  the  State,  even  though  a  portion  of  such  business 
is  interstate  commerce.  In  this  respect  I  agree  with 
the  contention  of  the  Attorney-General. 

Section  3  of  the  Act  of  1905,  referred  to  in  the  opin- 
ion of  the  Attorney-General,  provides  that  the  cor- 
poration shall  file  a  statement  showing,  among  other 
particulars,  the  following: 

"c.  The  amount  of  the  capital  stock  paid  in 
money,  property  or  services. 

"d.  The  nature  of  the  business  to  be  transacted 
in  this  State. 

"e.  The  proportion  of  the  capital  stock  of  said 
corporation  which  is  represented  in  this  State  by 
its  property  located  or  to  be  acquired  therein  and 
by  its  business  to  be  transacted  therein.  In  de- 
termining said  proportion  of  the  capital  stock,  the 
property  of  said  corporation  located  in  this  State 
or  to  be  acquired  therein  and  the  business  trans- 
acted within  and  without  the  State  for  one  year 
immediately  preceding  the  filing  of  its  charter  or 
articles  of  association  or  incorporation  shall  be 
considered  and  control." 

(Session  Laws  of  1905,  p.  933.) 
Clause  F  of  the  same  section  provides : 

"Shall  constitute  and  appoint  the  Secretary  of 
State  its  true  and  lawful  attorney  upon  whom  the 
summons,  notices,  pleadings  or  process  in  any 
action  or  proceeding  against  it  may  be  served  in 
respect  to  any  liability  arising  out  of  any  business, 
contract  or  transaction  in  this  State,  and  stipulate 
that  service  thereof  upon  the  Secretary  of  State, 
or  his  assistant,  shall  be  accepted  irrevocably  as 


840 

a  valid  service  upon  it,  and  that  such  appointment 
and  stipulation  shall  continue  in  force  irrevocably 
so  long  as  any  liability  of  such  corporation  re- 
mains outstanding  in  this  State. ' ' 
Section  4  provides : 

"Such  corporation  shall  pay  into  the  office  of 
the  Secretary  of  State,  upon  filing  its  articles  of 
association  or  incorporation,  a  fee  of  twenty-five 
dollars  and  one  dollar  for  every  one  thousand  dol- 
lars of  its  capital  stock  exceeding  twenty-five 
thousand  dollars  employed  or  to  be  employed  in 
this  State,  as  shown  by  its  sworn  statement." 
(Ibid.,  p.  934.) 
Section  7  provides: 

"Every  foreign  corporation  which  has  hereto- 
fore filed  with  the  Secretary  of  State  a  copy  of  its 
charter  or  articles  of  association  or  incorporation, 
or  which  shall  hereafter  file  the  same  as  required 
by  this  act,  and  every  foreign  corporation  trans- 
acting business  in  this  State  shall,  annually,  dur- 
ing the  month  of  January,  file  with  the  Secretary 
of  State  a  report  sworn  to  by  the  president,  sec- 
retary, treasurer  or  general  manager  of  the  cor- 
poration, as  of  the  first  day  of  January,  which 
sfcall  state : 

"c.  The  nature  of  the  business  transacted  in 
this  State  during  the  year  preceding. 

' '  d.  The  amount  of  capital  stock  paid  in  money, 
property  or  services. 

"e.  The  total  amount  of  business  transacted  by 
said  corporation  during  the  preceding  year,  and 
the  true  value  of  all  property  held  by  said  corpo- 
ration. 

"f.  The  total  amount  of  business  transacted 
during  the  preceding  year  in  this  State. 

"g.  The  proportion  of  the  capital  stock  repre- 
sented in  the  State  of  Wisconsin  by  its  property 
located  and  business  transacted  therein  during  the 
preceding  year. ' ' 

Section  11  prescribes  a  penalty  of  $500  for  a  failure 
to  comply  with  the  law. 

I  do  not  agree,  however,  with  the  assumption  of  the 


841 

Attorney-General  that  the  license  tax  includes  that 
portion  of  the  business  which  is  interstate  commerce. 
The  tax  is  upon  the  capital  stock  "employed  or  to  be 
employed"  in  the  State.  In  determining  the  propor- 
tion of  the  capital  stock,  the  property  located  "and 
the  business  transacted  within  and  without  the  State" 
controls. 

A  State  has  no  power  to  impose  burdens  on  trans- 
actions in  interstate  commerce.  Such  transactions  do 
not  constitute  "doing  business"  within  the  State.  If 
your  company  sends  its  traveling  salesmen  into  Wis- 
consin to  solicit  orders  and  these  orders  are  filled  and 
the  goods  are  shipped  from  here,  such  business  is  car- 
ried on  here  and  not  in  Wisconsin.  If  all  the  transac- 
tions of  your  company  were  carried  on  in  this  man- 
ner, it  would  not  be  necessary  to  comply  with  the  for- 
eign corporation  law  of  Wisconsin,  for  the  reason  that 
your  company  would  not  be  doing  business  in  that 
State.  The  term  "business  transacted"  within  the 
State  can  only  mean  domestic  business  and  not  inter- 
state business.  Of  course,  as  I  have  stated,  the  State 
can  impose  a  license  tax  which  would  include  the  inter- 
state business,  but  the  law  must  clearly  show  an  inten- 
tion to  include  such  transactions.  Laws  of  this  char- 
acter being  penal  in  their  nature  must  be  strictly  con- 
strued. 

I  am  therefore  of  the  opinion  that  in  determining  the 
tax  to  be  paid,  only  the  business  carried  on  in  Wiscon- 
sin need  be  taken  into  consideration. 


IT  IS  NOT  NECESSARY  FOR  A  CORPORATION  TO  FILE  THE  ILLI- 
NOIS ANTI-TRUST  AFFIDAVIT  UNLESS  IT  RECEIVES  AN  IN- 
QUIRY FOR  THE  SAME  FROM  THE  SECRETARY  OF  STATE. 

(Beacon  Falls  Eubber  Shoe  Co.,  July  17,  1906.) 

"We  are  in  receipt  of  your  communcation  of 
the  2nd  inst.,  relative  to  filing  an  anti-trust  affi- 
davit. We  note  that  you  say  that  those  who  receive 
notice  to  file  affidavit  are,  if  facts  permit,  advised 
to  file  same  at  once  and  as  we  note  this  law  also 
applies  to  foreign  corporations  doing  business  in 


842 

this  state  would  like  to  have  counsel's  advice  as  to 
whether  a  foreign  corporation  who  had  not  been 
notified  to  file  affidavit  are  supposed  to  do  it  of 
their  own  volition,  and  whether  there  is  a  penalty 
attached  for  not  filing  the  affidavit  whether  they 
are  notified  to  do  so  or  not." 

The  Illinois  law  provides  in  part : 

'•'It  shall  be  the  duty  of  the  secretary  of  state, 
on  or  about  the  first  day  of  September  of  each 
year,  to  address  to  the  president,  secretary  or 
treasurer  of  each  incorporated  company  doing 
business  in  this  state  whose  postoffice  address  is 
known  or  may  be  ascertained,  a  letter  of  inquiry 
as  to  whether  the  said  corporation  has  all  or  any 
part  of  its  business  or  interest  in  or  with  any  trust, 
combination  or  association  of  persons  or  stock- 
holders, as  named  in  the  preceding  provisions  of 
this  act,  and  to  require  an  answer,  under  oath,  of 
the  president,  secretary  or  treasurer,  of  any  direc- 
tor of  said  company,  a  form  of  affidavit  shall  be  en- 
closed in  said  letter  of  inquiry,  as  follows : ' ' 

(Setting  forth  the  affidavit.) 

"And  on  refusal  to  make  oath  in  answer  to  said 
inquiry,  or  on  failure  to  do  so  within  thirty  days 
from  the  mailing  thereof,  the  secretary  of  state 
shall  certify  that  fact  to  the  attorney  general, 
whose  duty  it  shall  be  to  direct  the  state's  attorney 
of  the  county  wherein  such  corporation  or  corpo- 
rations are  located,  and  it  is  hereby  made  the  duty 
of  the  state's  attorney,  under  the  direction  of  the 
attorney  general,  at  the  earliest  practical  moment, 
in  the  name  of  the  People  of  the  State  of  Illinois, 
and  at  the  relation  of  the  attorney  general,  to  pro- 
ceed against  such  corporation  for  the  recovery  of 
a  penalty  of  fifty  dollars  for  each  and  every  day 
after  such  refusal  to  make  oath,  or  failure  to  make 
said  oath  within  the  thirty  days  from  the  mailing 
of  said  notice."  (Hurd's  1905  statutes.) 

By  the  act  of  May  18,  1905,  such  reports  as  domestic 
corporations  are  required  to  make  must  be  made  by 
foreign  corporations.  (Laws  111.  1905,  page  126.) 


843 

In  People  v.  Butler  Street  Foundry,  201  111.,  236,  255 
(1903),  it  is  said: 

"The  statute  in  apt  terms  provides  the  affidavit 
shall  be  filed  or  the  penalty  shall  be  incurred.  The 
offense  is  the  failure  to  file  the  affidavit  in  reply  to 
the  letter  of  inquiry." 

I  am  of  the  opinion  that  a  foreign  corporation  is  not 
liable  for  failure  to  file  the  anti-trust  affidavit  unless 
it  receives  the  notice  from  the  secretary  of  state.  The 
statute  by  referring  to  the  mailing  and  receiving  of  the 
notice  constitutes  this  a  condition  precedent  to  liability 
on  the  part  of  the  foreign  corporation  under  the 
statute. 

In  any  event  the  burden  of  proof  would  be  on  the 
secretary  of  state  to  prove  the  mailing  of  the  specific 
notice,-  and  if  this  could  be  done  by  the  secretary  of 
state  it  would  then  be  necessary  for  the  foreign  cor- 
poration to  prove  that  it  never  received  the  notice.  A 
case  involving  this  precise  question  in  reference  to  a 
foreign  corporation  is  now  pending  in  the  Circuit  Court 
of  Sangamon  County,  in  which  I  am  making  this  de- 
fense. 


THE    LEGALITY    OF    THE    USE    OF    THE    NATIONAL    FLAG    FOR 
ADVERTISING   PURPOSES. 

uf     ' 
"  (Merkle- Wiley  Broom  Company,  July  20, 1906.) 

"We  beg  to  inquire  whether  the  association's 
attorney,  Mr.  Mayer,  knows  of  any  law  preventing 
the  use  of  the  national  emblem  on  broom  labels, 
as  per  enclosed  label,  which  we  used  in  a  former 
campaign. 

We  are  advised  by  Attorney  General,  Mr.  Stead, 
of  this  state,  that  there  is  no  law  in  this  state  pro- 
hibiting its  use. ' ' 

An  act  was  passed  by  the  Illinois  legislature  in  1899 
(Laws  of  Illinois,  1899,  p.  234)  known  as  the  "Flag- 
Law,"  prohibiting  under  penalty  the  use  of  the  na- 
tional flag  or  emblem  for  advertising  purposes.  In  my 
opinion  of  October  20,  1899,  to  the  association,  I  came 
to  the  conclusion  that  the  law  was  unconstitutional.  In 


844 

April,  1900,  in  the  case  of  Rushtrat  v.  People,  185  111., 
133   (1900),  the  Illinois  Supreme  Court  declared  the 
law  unconstitutional  as  an  arbitrary  invasion  of  the 
personal  rights  and  liberties  of  a  citizen. 
The  court  there  said  (p.  146) : 

"The  use  of  the  flag  of  the  United  States,  as 
embodied  in  advertising  sheets  and  placards  and 
labels  and  in  common  law  trademarks,  has  received 
the  unqualified  approval  of  the  whole  commercial 
world.  It  has  also  received  the  sanction  of  those 
having  in  charge  the  execution  of  the  trademark 
laws  of  the  United  States.  The  usage  and  practice 
of  employing  a  flag  for  commercial  purposes  have 
been  indulged  in  by  citizens  of  the  United  States 
with  the  knowledge  of  the  national  government. 
The  absence  of  congressional  prohibition  against 
the  usage  and  practice,  thus  indulged  in  with  the 
knowledge  of  the  general  government,  has  created 
a  'privilege'  in  the  citizens  of  the  United  States 
to  continue  such  use  until  withdrawn  by  the  com- 
petent authority.  An  act  of  legislation,  passed  by 
a  particular  state,  which  deprives  the  citizens  of 
such  privilege,  contravenes  that  clause  of  the 
amendment  to  the  national  constitution  which  for- 
bids any  state  to  abridge  the  privileges  and  im- 
munities of  a  citizen  of  the  United  States.  If  the 
state  legislature  can  restrict  the  use  of  the  national 
flag,  and  permit  its  use  for  one  purpose,  and  pro- 
hibit its  use  for  another  purpose,  it  would  have 
the  right  to  prohibit  its  use  altogether  within  the 
limits  of  the  state.  But  it  cannot  be  pretended  that 
the  state  of  Illinois  has  authority  to  prohibit  the 
use  of  the  national  flag  altogether.  It  necessarily 
follows  that  it  has  no  authority  to  prohibit  its  use 
for  certain  purposes." 

There  is  therefore  no  law  in  Illinois  prohibiting  the 
use  of  the  national  flag  on  broom  labels. 

A  similar  law  in  New  York  was  declared  unconsti- 
tutional in  People  ex  rel  v.  Van  de  Carr,  178  N.  Y., 
425;  70  N.  K,  965  (1904). 

In  Nebraska,  however,  a  "Flag  Law"  prohibiting 
the  use  of  the  national  flag  or  emblem  for  advertising 


845 

purposes,  etc.,  has  recently  been  upheld  as  constitu- 
tional in  Halter  v.  State,  105  N.  W.,  298  (Neb.,  Oct., 
1905).  The  Nebraska  court  expressly  disapproves  and 
refuses  to  follow  the  decision  of  the  Illinois  Supreme 
Court  in  Rushtrat  v.  People,  185  111.,  133  (1900). 

Though  they  might  be  sent  in  original  packages  into 
Nebraska,  yet  I  would  advise  that  the  labels  be  not 
used  because  the  law  would  apply  when  the  brooms 
are  put  into  distribution.  In  other  states  there  is  no 
legal  objection  to  the  use  of  the  labels  with  the  national 
flag  thereon. 

NOTE: — The  United  States  Supreme  Court  in  Halter  v.  Nebraska, 
205  U.  S.,  34,  on  March  4,  1907,  upheld  the  Nebraska  flag  law  as  con- 
stitutional and  as  a  valid  regulation  under  the  police  power. 

In  Commonwealth  v.  Sherman  Mfg.  Co.,  189  Mass.,  76,  a  law  pro- 
hibiting the  use  of  the  State  arms  or  seal  for  advertising  purposes 
was  held  valid. 

After  the  decision  of  the  United  States  Supreme  Court  in  Halter 
V.  Nebraska  the  Illinois  legislature  passed  another  law  prohibiting  the 
use  of  the  national  flag  or  emblem  for  advertising  purposes.  (Laws  of 
Illinois,  1907,  page  351.)— Ed. 


LIABILITY     OF     A     EAILEOAD     FOE     GOODS     DBLIVEBED     AT     A 
"PBEPAY  STATION." 

(Illinois  Sewing  Machine  Company,  July  20,  1906.) 
"We  have  a  claim  against  the  Illinois  Central 
Railroad  Company,  covering  a  shipment  to  a  firm 
in  Arkansas.  Destination  is  a  prepaid  point,  that 
is,  the  railroad  company  does  not  maintain  an 
agent  at  that  point. 

"The  connections  of  the  Illinois  Central  Rail- 
road Company  refuse  to  pay  the  claim  on  the 
grounds  that  their  records  show  delivery  to  this 
station.  They  do  not  hold  consignee's  receipt,  but 
claim  that  delivery  at  a  prepaid  station  constitutes 
delivery  to  consignee.  The  Illinois  Central  Rail- 
road Company  declines  to  pay  our  claim  and  refers 
us  to  such  firms  as  Montgomery  Ward  &  Company, 
and  Sears,  Roebuck  &  Company,  who  accept  deliv- 
ery at  prepaid  point  as  delivery  to  consignee." 
It  is  the  general  rule  either  by  custom  and  usage  or 
contract  that  delivery  at  a  "prepay  station"  consti- 


846 

tutes  delivery  by  the  carrier  sufficient  to  relieve  it  from 
liability. 

In  Hill  v.  St.  L.  S.  W.  Ry.  Co.,  67  Ark.,  402 ;  55  S.  W., 
216  (1900),  the  defendant  railroad  received  as  a  con- 
necting carrier  a  carload  of  freight,  consigned  to  Hill, 
for  transportation  to  a  point  on  its  road  where  it  had 
neither  freight  agent  or  depot  building.  The  bill  of 
lading  issued  by  the  initial  carrier  showed  that  the 
freight  charges  were  paid ;  and  provided  that  delivery 
of  freight  destined  to  switches  or  sidetracks  having 
no  agent  should  be  complete  upon  switching  the  car  at 
such  sidetrack.  Defendant  carried  the  car  to  the  point 
indicated  and  sidetracked  it  on  a  switch  in  front  of 
the  office  of  a  lumber  company,  for  whom  the  freight 
was  really  intended,  although  consigned  to  Hill.  The 
lumber  company  broke  open  the  car,  unloaded  its  con- 
tents and  failed  to  pay  a  draft  for  its  value.  The 
court  held  that  the  carrier  was  not  liable  for  the  loss 
of  the  contents  of  the  car,  since  delivery  was  completed 
by  the  carrier  at  the  prepay  station. 

In  Allam  v.  Penn  R.  Co.,  183  Pa.,  174;  38  Atl.,  709 
(1897),  it  is  said: 

"The  evidence  shows  substantially  that  along 
the  lines  of  the  defendant's  railroad  there  are 
small  stations  known  as  'prepaid  stations,'  at 
which  no  depot  building  has  been  erected  and  no 
freight  agent  located.  The  business  at  such  sta- 
tions will  not  ordinarily  justify  the  expense  which 
such  conveniences  would  involve ;  but  the  railroad 
company  will  accommodate  people  near  such  sta- 
tions by  delivering  goods  consigned  to  them  on  a 
platform  or  on  the  ground,  as  the  case  may  be. 
Among  such  'prepaid  stations'  was  one  called 
Strafford.  The  only  convenience  at  Strafford  for 
the  receipt  and  delivery  of  goods  was  a  platform 
by  the  side  of  the  road.  There  was  no  shelter,  and 
no  employe  of  the  company  to  give  notice  of  the 
arrival  of  goods  at  this  station,  up  to  the  7th  day 
of  October,  1893.  It  is  alleged,  and  evidence 
was  given  upon  the  trial  to  show,  that  custom 
exists  among  the  railroads  of  the  country  for  con- 
signees of  goods  at  such  stations  to  look  out  for 


847 

the  arrival  of  their  parcels  and  take  charge  of 
them  when  they  are  set  down  from  the  train.  It 
is  not  difficult  to  see  how  such  a  custom  should 
grow  out  of  the  necessities  of  the  situation  in  which 
both  shippers  and  the  carriers  find  themselves  at 
such  stations.  Shippers  know,  for  they  are  bound 
to  know,  that  at  a  prepaid  station  they  cannot 
expect  notice  from  the  carrier,  nor  attention  or 
shelter  for  their  goods,  but  their  wants  are  such 
that  they  may  prefer  to  accept  the  risks  rather 
than  be  compelled  to  go  to  some  more  remote  sta- 
tion where  shelter  exists  and  employes  are  abun- 
dant, to  receive  their  goods.  When  persons  so  sit- 
uated elect  to  have  goods  shipped  to  them  at  a 
prepaid  station  there  is  no  hardship  in  holding 
that  they  thereby  assume  to  do  for  themselves 
what  they  know  the  railroad  company  cannot  do 
for  them.  If  we  hold  that  a  carrier  is  bound  to 
give  notice  to  the  consignee  of  the  arrival  of  goods 
at  such  stations,  and  keep  them  safely  for  a  rea- 
sonable time  until  they  can  be  taken  away,  we 
simply  compel  the  railroad  company  to  abandon 
all  such  stations  and  deprive  the  neighborhood  of 
the  accommodation  which  they  afford.  As  there 
is  no  shelter  there  the  company  cannot  keep  the 
goods  for  the  owner.  As  there  is  no  employe  at 
the  station  notice  cannot  be  given. 

"The  carrier  must  transport  the  goods  in  the 
only  way  he  can,  or  refuse  to  transport  them  to  a 
prepaid  station.  If,  therefore,  the  general  rule  as 
to  notice  be  as  contended  for  by  the  plaintiff,  where 
the  ordinary  facilities  exist,  we  must,  neverthe- 
less, admit  the  existence  of  some  exceptions  grow- 
ing out  of  the  special  circumstances  under  which 
the  carriage  is  undertaken,  and  out  of  the  customs 
that  have  grown  up  for  the  mutual  advantage 
of  both  shipper  and  carrier.  But  in  this  case  we 
have  an  express  contract  entered  into  because  of 
the  character  of  the  station  and  the  refusal  of  the 
carrier  to  assume  risks  against  which  he  cannot 
protect  himself  at  the  place  for  the  delivery  of 


848 

goods.    In  the  bill  of  lading  of  February  22,  1894, 
there  is  the  following  provision : 

'When  merchandise  is  destined  to  or  from  way 
stations  and  platforms  where  station  buildings 
have  not  been  established  by  the  carrier,  or  where 
there  are  no  regularly  appointed  freight  agents, 
it  shall  be  at  the  risk  of  the  owner  until  loaded 
into  the  cars  and  when  unloaded  therefrom;  and 
when  received  from  or  delivered  on  private  turn- 
outs it  shall  be  at  the  owner's  risk  until  cars  are 
attached  to  and  after  they  are  detached  from  the 
train.'  The  goods  were  received  and  transported 
under  the  terms  of  this  agreement  by  which  the 
consignors  undertook  to  receive  the  goods  when 
they  were  put  upon  the  platform  at  StrafFord  and 
care  for  them  at  their  own  risk.  If  this  was  not 
done  it  was  not  the  fault  of  the  carrier.  He  was 
to  carry  only,  and  all  responsibility  for  protecting 
the  goods,  whether  from  thieves  or  from  the 
weather,  after  reaching  their  destination,  was 
assumed  by  the  consignor,  the  owner. ' ' 
In  this  case  goods  were  unloaded  during  a  storm,  left 
on  a  platform  and  damaged.  The  court  held  that  the 
carrier  was  not  liable  for  any  damage  resulting. 

In  8.  &  N.  Ala.  R.  R.  Co.  v.  Wood,  66  Ala.,  168  (1880), 
it  was  held : 

"A  railroad  company  is  not  required  by  law  to 
keep  a  warehouse  or  depot  at  every  station  along 
the  line  of  its  road,  and  may  lawfully  stipulate, 
either  expressly  or  by  implication,  that  it  will 
assume  no  liability  as  a  warehouseman  at  a  'flag 
station, '  where  it  has  no  depot  or  agent ;  and  when 
the  consignee  is  fully  advised  at  the  time  of  ship- 
ment, that  the  company  has  no  depot  nor  agent 
at  such  station,  and  it  is  not  shown  that  the  exi- 
gencies of  its  business  required  that  it  should 
have  an  agent  or  depot  at  that  place,  the  liability 
of  the  company  as  a  common  carrier  terminates 
with  the  safe  delivery  of  the  goods  on  the  side 
track  at  that  point,  and  it  assumes  no  liability  as 
a  warehouseman." 
In  Wells  v.  Wilmington,  etc.,  R.  Co.,  51  N.  C.,  47 


849 

(1858),  it  was  held  that  an  action  could  not  be  main- 
tained against  a  railroad  company  as  a  common  car- 
rier for  the  loss  or  destruction  of  goods  deposited  on 
the  road  side,  at  a  place  where  there  is  no  regular 
station  and  no  agent. 
Other  cases  are  to  the  same  effect. 

L.  &  N.  R.  R.  Co.  v.  GUmer,  89  Ala.,  534;  7  So., 

654  (1890). 
McMasters  v.  Penn.  R.  Co.,  69  Pa.  St.,  374 

(1871). 

It  should  be  observed  that  the  proposed  uniform  bill 
of  lading  and  most  of  the  bills  of  lading  in  use  con- 
tain the  following  or  a  similar  provision : 

"Property  destined  to  or  taken  from  a  station 
at  which  there  is  no  regularly  appointed  agent, 
shall  be  entirely  at  risk  of  owner  when  unloaded 
from  cars,  or  until  loaded  into  cars ;  and  when  re- 
ceived from  or  delivered  on  private  or  other  sid- 
ings, shall  be  at  owner's  risk  until  the  cars  are 
attached  to,  and  after  they  are  detached  from, 
trains." 

Goods  carried  under  a  contract  containing  such  a 
provision  would  be  at  owner's  risk  after  delivery  at  a 
prepay  station.  A  carrier  is  under  no  obligation  to 
transport  goods  to  a  point  at  which  there  is  no  sta- 
tion or  business  sufficient  to  warrant  a  station,  and 
when  it  takes  goods  to  such  a  point  it  can  limit  its 
liability  as  to  what  constitutes  a  delivery.  But  the  bur- 
den of  proof  of  the  delivery  at  the  "prepay"  station 
is  on  the  Illinois  Central  Railroad.  In  a  suit  against 
it,  in  order  to  constitute  a  defense  it  must  prove  such 
delivery.  Whether  it  did  make  such  delivery  is  a  ques- 
tion of  fact  upon  which  I  can  express  no  opinion. 


IN   REFERENCE  TO  A  GENERAL   CONTRACT   WITH  AN   EXPRESS 
COMPANY  BY  WHICH  IT  SEEKS  TO  LIMIT  ITS  LIABILITY. 

(Joseph  T.  Ryerson  &  Son,  July  20,  1906.) 

"We  beg  to  enclose  herewith  copy  of  contract 
left  by  the  Pacific  Express  Company  for  us  to 
sign.  We  were  first  approached  by  the  American 


850 

Express  Company  and  refused  to  sign  their  con- 
tract, which  reads  practically  the  same  as  the  one 
attached,  except  that  their  conditions  are  a  little 
different. 

It  is  our  practice,  when  prepaying  shipments,  to 
use  our  own  form,  copy  of  which  we  are  enclos- 
ing. This  is  what  the  express  companies  object  to, 
and  both  the  American  and  Wells  Fargo  com- 
panies have  advised  us  that  they  will  not  accept 
any  more  shipments,  or  receipt  for  same,  unless  we 
use  their  form. 

This  appears  to  us  to  be  about  the  same  as  the 
uniform  bill  of  lading  which  the  railroad  company 
insisted  on  the  shippers  signing. 

Will  you  kindly  take  up  and  advise  if  you  think 
it  proper  that  we  sign  this  contract,  or  if  we  should 
contest  it,  and  what  our  rights  are  1 ' ' 
The  form  of  express  receipt  used  by  Byerson  &  Son 
is  a  form  of  due  bill,  reading: 
''Joseph  T.  Ryerson  &  Son, 
To Express  Co.,  Dr., 

For  prepaid  charges  on  articles  described  below 
(with  columns  for  notations  endorsed) :     (1)  Ar- 
ticle, (2)  Value  asked  and  given  as:  (3)  Weight: 
(4)  Consignee:  (5)  Destination:  (6)  Prepaid." 
The  form  of  contract  which  the  express  company 
requests  to  be  signed  is  as  follows : 

"Whereas,  the  undersigned,  Jos.  T.  Ryerson  & 
Co.,  engaged  in  the  business  of  manufacturing  and 
shipping and  miscellaneous  express  mat- 
ter in  Chicago,  111.,  are  frequent  shippers  over 
the  lines  of  the  Pacific  Express  Company, 

And,  whereas,  the  attached  is  the  regular  form 
of  receipt  which  is  issued  by  said  express  company 
to  all  shippers  of  goods  over  its  lines,  viz. : 
(Here  is  attached  a  copy  of  the  usual  form  of  ex- 
press receipt  used  by  Pacific  Express  Company:) 

"But  the  Jos.  T.  Ryerson  &  Co.  for  its  own  con- 
venience has  prepared  a  receipt  book  for  goods  to 
be  shipped  by  them  via  said  express  company, 
which  they  desire  said  express  company,  by  its 
agent,  to  sign,  and  said  book  does  not  contain  the 


851 

conditions  of  shipment  which  are  part  of  the  reg- 
ular receipt  of  said  express  company,  as  above 
set  out: 

And,  whereas,  said  express  company  desires  to 
accommodate  the  said  Jos.  T.  Ryerson  &  Co.  by 
signing  for  shipments  by  them  in  receipt  book  so 
prepared  by  them. 

Now,  therefore,  in  consideration  of  such  accom- 
modation so  extended  to  them  by  said  express 
company,  and  in  consideration  of  one  dollar  and 
other  good  and  valuable  considerations  to  them  in 
hand  paid  by  said  express  company,  the  said  Jos. 
T.  Ryerson  &  Co.  agree  to,  and  do  hereby  accept 
and  adopt,  as  a  part  and  condition  of  each  receipt 
which  may  be  given,  as  aforesaid,  by  said  express 
company  for  goods  shipped  by  said  Jos.  T.  Ryer- 
son &  Co.  all  the  terms  and  conditions  of  the  reg- 
ular shipping  receipt  of  said  express  company 
above  set  forth,  the  intention  hereof  being,  that 
each  shipment  of  goods  by  said  Jos.  T.  Ryerson  & 
Co.  over  said  The  Pacific  Express  Company's 
lines,  and  the  rights  to  all  parties  in  any  way  in- 
terested therein,  shall  be  subject  to  and  controlled 
by  all  the  terms  and  conditions  of  shipments  which 
may  be  contained  in  the  regular  form  of  express 
receipt,  which  may  be  in  general  use  by  said  ex- 
press company  at  the  place  where  the  shipment 
is  made,  at  the  time  or  times  when  each  shipment 
respectively  is  receipted  for  by  said  express  com- 
pany. 

Witness  our  hands  and  seals  this—  — day  of 
April  1906. 

(Seal) 

(Seal)" 

I  advise  that  this  contract  be  not  signed  under  any 
circumstances.  The  express  company  is  attempting  by 
this  form  of  contract  to  obtain  the  express  assent  of 
the  consignor  to  all  conditions  in  its  usual  form  of  re- 
ceipt. By  signing  the  contract  the  consignor  would 
waive  many  rights  which  would  otherwise  be  his  in 
event  of  loss  or  damage  to  the  property  in  transit. 


852 

It  is  the  law  in  Illinois  that  the  express  assent  of 
the  consignor  to  the  terms  of  the  bill  of  lading  or  ex- 
press receipt  must  be  shown  by  the  carrier  in  order  to 
bind  the  consignors,  and  the  receipt  or  acceptance  of 
a  receipt  or  bill  of  lading,  even  with  knowledge  of  its 
terms,  will  not  bind  the  consignor.    The  express  assent 
of  the  shipper  to  the  terms  and  conditions  is  necessary. 
C.  &  N.  W.  R.  Co.  v.  Calumet  Stock  Farm, 
194111.,  9  (1901). 

B.  &  0.  S.  W.  R.  Co.  v.  Fox,  113  111.  App.,  180, 
185  (1904). 

E.  J.  &  E.  R.  Co.  v.  Bates,  98  111.  App.,  311 
(1901). 

C.  &  N.  W.  Ry.  Co.  v.  Simon,  160  111.,  648 
(1896). 

C.  &  A.  R.  Co.  v.  Davis,  159  111.,  53  (1895). 
E.  &  W.  Transp.  Co.  v.  Dater,  91  111.,  195 

(1878). 
Mchts.  D.  Transp.  Co.  v.  Leysor,  89  111.,  43 

(1878). 
Western  Transp.  Co.  v.  Newhall,  24  111.,  466 

(1860). 
Mchts.  D.  Transp.  Co.  v.  Furthmann,  149  111., 

66  (1893). 
C.  C.  C.  &  St.  L.  Ry.  Co.  v.  Patton,  203  111., 

376  (1903). 
Adams  Exp.  Co.  v.   Stettaners,  61   111.,   184 

(1871). 

Anchor  Line  v.  Dater,  68  111.,  369  (1873). 
C.  &  N.  W.  R.  Co.  v.  Chapman,  133  111.,  96 

(1890). 

But  where  a  limitation  of  carrier's  liability  is  con- 
tained in  a  contract  signed  by  the  shipper,  the  shipper 
cannot  relieve  himself  from  its  terms  by  reason  of 
ignorance  of  the  same,  unless  he  has  been  induced  to 
execute  it  through  fraud  or  misrepresentation. 

Coles  v.  R.  R.  Co.,  41  111.  App.,  607  (1892). 
Blck.  v.  Wabash  R.  Co.,  Ill  111.,  351  (1884). 
But  even  by  a  signed  contract  expressly  assented 
to  by  the  consignor  it  is  beyond  the  power  of  a  carrier 
to  limit  its  liability  for  damages  resulting  from  its 
gross  negligence  or  that  of  its  servants. 


853 

C.  &  N.  W.  R.  Co.  v.  Calumet  Stock  Farm, 

194  111.,  9  (1901). 
C.  &  N.  W.  R.  Co.  v.  Chapman,  133  111.,  96 

(1890). 

The  form  of  contract  here  presented  is  one  designed 
to  secure  to  the  express  company  all  the  advantages 
which  the  railroads  sought  to  obtain  by  the  uniform 
bill  of  lading.  I  advise  that  Joseph  T.  Ryerson  &  Son 
refuse  to  sign  the  contract  under  any  circumstances. 

NOTE:— In  Wabash  R.  E.  Co.  v.  Thomas,  222  111.,  337  (Oct.,  1906), 
it  was  held  that  even  though  the  contract  of  shipment  is  signed  by  the 
shipper  it  is  incumbent  upon  the  carrier  to  prove  that  the  shipper  as- 
sented to  the  terms  of  the  contract. — Ed. 


UPON  WHOM  FALLS  THE  RISK  OF  TRANSPORTATION  OF  GOODS, 
"P.  O.  B."  POINT  OF  SHIPMENT. 

(Spielman  Brothers,  July  20,  1906.) 

"We  would  like  to  have  Mr.  Levy  Mayer's  opin- 
ion as  to  where  our  liability  ceases  in  the  following 
case.  We  are  selling  a  product  which  we  call  dis- 
tillers dried  grains  free  on  board  or  dock,  Chi- 
cago; car  in  question  being  loaded  by  our  teams 
to  the  Michigan  Central  Railroad  and  handled  by 
their  freight  handlers,  for  which  we  hold  railroad 
receipts  for  goods  delivered  in  good  condition. 
This  car  was  ordered  east  by  our  customer  who 
had  same  held  in  New  York  for  seventeen  days 
for  disposition.  Upon  arrival  of  disposition  car 
was  heated  and  was  refused  and  ordered  reshipped 
to  us.  Upon  its  arrival  and  examination  we  found 
car  having  a  metallic  roof  and  being  held  for  so 
long  a  time  we  contend  that  the  change  in  tem- 
perature caused  roof  to  sweat,  dampening  the 
food  or  grains  which  caused  same  to  heat. 

We  contend  that  our  responsibility  ceased  upon 
delivery  to  railroad  company  in  good  condition 
and  should  there  be  any  loss  or  claim  our  customer 
should  stand  same  or  if  it  is  found  to  be  the  fault 
of  the  railroad  equipment  it  is  his  place  to  file 


claim  with  the  railroad  company  for  settlement, 
not  us." 

In  my  opinion  of  July  12,  1905,  for  the  Chicago 
Varnish  Company,  I  discussed  f.  o.  b.  contracts,  and 
to  that  opinion  I  refer. 

The  words  "free  on  board"  imply  that  the  vendor 
will  save  the  vendee  from  any  expense  attending  the 
bringing  of  the  goods  to  or  upon  the  vehicle  or  con- 
veyance specified,  or  to  the  point  named.  The  effect 
of  putting  goods  free  on  board  for  transportation,  in 
compliance  with  an  agreement  so  to  do,  consigned  to 
the  vendee  without  restrictions  of  any  kind,  is  to  place 
the  risk  of  the  transportation  thenceforth  upon  the 
vendee. 

In  Lord  v.  Edwards,  148  Mass.,  476;  20  N.  E.,  161, 
sugar  was  shipped  f.  o.  b.  at  Manila  for  New  York, 
guaranteed  to  be  of  a  certain  standard.  This  was  held 
to  be  a  sale  of  a  specified  article  at  Manila,  where,  upon 
its  delivery  upon  board  of  ship,  the  title  passed  to  the 
vendee,  who  thereupon  assumed  all  risks  of  its  future 
condition,  and  the  vendor  was  held  not  liable  for  any 
deterioration  in  its  quality  upon  the  arrival  at  New 
York  caused  by  the  long  sea  voyage. 

In  Orthwein's  Sons  v.  Wichita  Mill  &  Elevator  Co. 
(Tex.  Civ.  App.),  75  S.  W.,  364,  where  wheat  was  sold 
"f.  o.  b.,  shipment  within  ten  days,"  the  place  of  deliv- 
ery to  the  vendee  was  held  to  be  at  the  initial  point  of 
shipment,  at  which  time  title  passed  to  the  vendees  and 
the  transportation  was  thenceforward  at  their  risk. 

In  McKee  v.  Wild,  52  Neb.,  9;  71  N.  W.,  958,  a  con- 
tract for  the  sale  of  corn  of  a  certain  grade  provided 
that  it  was  to  be  shipped  "f.  o.  b.  Stockham"  and  to  be 
"Toledo  weights  and  grades."  It  was  held  that  the 
conditions  of  the  warranty  were  satisfied  if  the  corn 
upon  delivery  at  Stockham  was  of  the  weight  and 
grade  specified. 

In  Blakeslee  Mfg.  Co.  v.  Hilton,  5  Pa.  Super,  Ct., 
184,  a  contract  provided  that  a  pump  was  to  be  de- 
livered "free  on  board  cars  at  Duquoin,  in  the  State 
of  Illinois. ' '  It  was  held  that  the  carrier  at  that  point 
to  whom  delivery  was  made  thereupon  became  the  ven- 


855 

dee's  agent  and  answerable  to  the  vendee  for  the  dam- 
ages resulting  from  the  delay  in  the  transportation. 

But  the  rule  above  stated  that  under  a  contract  to 
ship  f.  o.  b.  a  delivery  to  the  common  carrier  passes 
the  title  and  risk  to  the  vendee,  is  changed  if  the  vendor 
takes  the  bill  of  lading  to  his  own  order.  The  risk  of 
transportation  is  then  on  the  vendor,  as  this  shows  a 
retention  of  title  in  himself. 

Erwin  v.  Harris,  87  Ga.,  333 ;  13  S.  E.,  513. 

See,  also,  on  subject  in  general: 

Hurst  v.  Altamont  Mfg.  Co.,  85  Pac.,  551. 

The  exact  terms  of  the  contract  of  sale  are  not  set 
forth,  but  I  assume  the  contract  provides  for  shipment 
free  on  board  Chicago.  After  delivery  to  the  Michigan 
Central  Railroad  Company,  the  risk  of  transportation 
then  was  upon  the  vendee.  If  the  grains  were  deliv- 
ered in  good  condition  to  the  carrier  as  called  for  by 
the  contract,  there  was  then  no  liability  upon  the  ven- 
dor. If  the  loss  was  occasioned  through  the  fault  or 
negligence  of  the  carrier,  it  falls  upon  the  vendee,  who 
should  file  his  claim  for  settlement  with  the  railroad  in- 
stead of  with  the  vendor. 


NOTE: — See,  also,  opinion  of  April  20,  1907  (United  Breweries 
Co.)  as  to  upon  whom  is  the  risk  of  transit  when  goods  are  sold 
f.  o.  b.  point  of  shipment  with  sight  draft  attached  to  order  bill  of  lading 
taken  in  name  of  consignor. — Ed. 


THE  LIABILITY  OF  AN  EXPRESS  COMPANY  FOR  C.  O.  D.  SHIP- 
MENTS DESTROYED  BY  FIRE  BEFORE  BEING  TAKEN  OUT  OF 
THE  EXPRESS  OFFICE. 

(Edward  Eose  &  Company,  July  20, 1906.) 

"Will  you  kindly  favor  us  with  the  opinion  of 
your  attorney  as  to  whether  we  can  hold  the  ex- 
press company  responsible  for  C.  0.  D.  shipments 
which  have  been  destroyed  by  fire  before  goods 
were  taken  out  of  the  office.  In  the  case  in  ques- 
tion, goods  were  shipped  May  31st,  June  8th  and 
June  30th,  and  were  destroyed  by  fire  in  the  ex- 
press office  on  July  6th." 


856 

Where,  by  contract  or  custom — as  is  usually  the  case 
with  express  companies — the  duty  of  the  carrier  is  to 
make  personal  delivery  to  the  consignee,  the  express 
company  remains  liable  as  an  insurer  until  reasonable 
effort  to  deliver  has  proven  ineffectual.  Then  if  by 
reason  of  inability  to  find  the  consignee,  or  the  con- 
signee's refusal  to  receive  the  goods,  delivery  is  not 
completed,  the  express  company  is  liable  only  for  safe- 
keeping as  bailee  for  hire,  and  would  not  be  liable  for 
goods  destroyed  by  fire  unless  due  to  its  own  negli- 
gence. 

Am.  Mchts.  Ex.  Co.  v.  Wolf,  79  111.,  430. 

Am.  Exp.  Co.  v.  Baldwin,  26  111.,  504. 

6  Cyc.,  454. 

Hutchinson  on  Carriers  (2nd  Ed.),  Sec.  380. 
No  different  rule  as  to  liability  would  apply  in  the 
case  of  C.  0.  D.  shipments,  which  imply  simply  that  on 
delivery  the  express  company  will  collect  the  amount 
stated. 

However,  if  the  destination  and  place  of  loss  of  the 
goods  is  such  a  small  town  or  station  that  the  express 
company  cannot  be  held  to  make  personal  delivery,  or 
the  consignee  resides  outside  certain  established  de- 
livery limits  and  the  consignee  is  notified  of  the  arrival 
of  the  shipment,  a  different  question  arises  and  the  ex- 
press company,  after  transportation  is  ended,  will  not 
then  be  liable  for  loss  by  fire  not  due  to  its  own  negli- 
gence. 

Am.  Mchts.  Exp.  Co.  v.  Schier,  55  111.,  140. 

Hutchinson  on  Carriers  (2nd  Ed.),  Sec.  380. 

Bollard  v.  Am.  Exp.  Co.,  107  Mich.,  695;  65 

N.  W.,  551. 

Where  goods  sent  C.  0.  D.  are  tendered  to  the  con- 
signee and  refused  it  is  the  duty  of  the  express  com- 
pany to  notify  the  consignor,  or  it  will  then  be  held  lia- 
ble for  depreciation  in  value. 

Am.  Exp.  Co.  v.  Wolf,  79  111.,  430. 
The  express  receipts  of  many  of  the  express  com- 
panies generally  contain  the  following  or  a  similar 
provision : 

"If  any  sum  of  money  besides  the  charges  for 
transportation  is  to  be  collected  from  the  con- 


857 

signee  on  delivery  of  the  above  described  prop- 
erty, and  the  same  if  not  paid,  or  if  in  any  case 
the  consignee  cannot  be  found  or  refuses  to  receive 
such  property,  or  for  any  other  reason  it  cannot 
be  delivered,  the  shipper  agrees  that  this  company 
may  return  said  property  to  him  subject  to  the 
conditions  of  this  receipt,  and  that  he  will  pay 
all  charges  for  transportation,  and  that  the  lia- 
bility of  this  company  for  such  property  while  in 
its  possession  for  the  purpose  of  making  such  col- 
lection, shall  be  that  of  warehouseman  only. ' ' 
In  Illinois  an  express  assent  of  the  shipper  is  neces- 
sary to  any  restriction  of  common  law  liability,  and 
mere  acceptance  of  the  bill  of  lading  or  receipt  does 
not  show  such  assent.    An  express  company  is  bound  to 
make  personal  delivery  and  is  an  insurer  therefore 
until  reasonable  effort  is  made  to  deliver,  within  the 
limitations  heretofore   stated.     This  clause  will  not, 
unless  expressly  assented  to,  therefore,  by  the  shipper, 
limit  the  liability  of  the  express  company  for  any  loss 
caused  by  fire  before  attempt  to  make  delivery.     But 
after  delivery  is  attempted  and  cannot  be  made,  the 
liability  of  the  express  company  will  then  be  that  of  a 
warehouseman. 

Sufficient  facts  are  not  stated  to  express  a  positive 
opinion  in  the  case  given,  but  if  the  goods  were  de- 
stroyed by  fire  not  due  to  the  negligence  of  the  com- 
pany before  any  attempt  was  made  to  deliver  at  a 
delivery  station  the  express  company  is  liable ;  if  they 
were  destroyed  by  fire  not  due  to  negligence  after  rea- 
sonable effort  to  deliver  was  made,  the  express  com- 
pany is  not  liable  for  the  value  thereof. 


THE  RIGHT  OF  THE  TRANSCONTINENTAL  FREIGHT  INSPEC- 
TORS TO  CHANGE  THE  CLASSIFICATION  OF  FREIGHT  TO  A 
HIGHER  CLASS  THAN  THAT  UNDER  WHICH  IT  IS  SHIPPED. 

(Chicago  Specialty  Box  Co.,  July  20,  1906.) 

"As  members  of  your  valued  organization  we 
will  thank  you  if  you  get  information  of  the  emi- 
nent attorney,  Mr.  Levy  Mayer,  on  the  following: 


858 

Can  the  Trans-Continental  Inspectors  without  re- 
course give  annoyance  to  the  shippers  by  contin- 
uously raising  classification  of  carload  or  local 
shipments,  which  mistakes  are  rectified  after  a 
great  deal  of  correspondence  by  the  railroad  com- 
panies!   We  have  had  within  the  last  sixty  days 
this  experience  with  car  shipments.    For  instance, 
we  shipped  over  the  Chicago  &  North- Western, 
a  Union  Pacific  car  of  ordinary  common  bottles 
which  take  a  rate  of  $0.90  and  they  changed  the 
rate  on  this  car  to  $2.55.    We  could  mention  quite 
a  number  of  similar  cases.    We  have  written  to 
R.  H.  Countiss,  agent  of  the  Trans-Continental 
Freight  Bureau,  as  stated,  and  in  many  cases  re- 
ceived relief  after  weeks  of  correspondence,  but 
what  we  would  like  to  have  rectified  is  that  these 
Trans-Continental  inspectors  cannot  and  without 
cause  make  the  shippers  of  this  market  so  much 
trouble  and  annoy  the  consignees  so  much  that 
they  prefer   to   make   their   purchases   from  the 
Pacific  coast  instead  of  from  our  market." 
In  I.  C.  R.  R.  Co.  v.  Seitz,  214  111.,  351  (1905),  goods 
were  shipped  under  the  wrong  classification,  but  not 
through  the  fault  of  the  shipper.     In  this  case  the 
shipper's  agent  did  not  know  of  the  classification,  but 
described  the  goods  as  "emigrant  movables"  and  the 
railroad  clerk  so  described  them  in  the  bill  of  lading 
and  rated  the  goods  as  seventh  class  and  fixed  the 
freight  rates  accordingly.     It  appeared  that  the  rail- 
road clerk  saw  the  goods  while  they  were  being  loaded 
and  had  knowledge  of  their  character.     In  the  state- 
ment of  facts  it  appeared  that : 

"After  the  bill  of  lading  had  been  delivered  to 
Kendall,  a  freight  inspector,  employed  by  the 
Western  Railroad  Weighing  Association,  who  had 
seen  the  goods  loaded  into  the  car,  saw  the  dupli- 
cate bill  of  lading  which  had  been  retained  by  the 
railroad  company,  and  observed  that  the  goods 
had  been  shipped  as  emigrant  movables  and  placed 
in  the  seventh  class,  when  according  to  the  classi- 
fication adopted  by  the  railroad  company,  under 


859 

the  rules  of  the  Eailroad  and  Warehouse  Commis- 
sion, they  should  have  been  designated  as  grocer- 
ies, fixtures,  horse,  wagon,  etc.,  and  placed  in  the 
first  class.  The  inspector,  acting  for  appellant, 
thereupon  changed  the  duplicate  bill  of  lading  to 
correspond  with  the  proper  classification.  This 
change  increased  the  freight  on  the  goods  $45.18. 
The  consignor  refused  to  pay  the  increased  freight 
and  the  goods  were  sold  by  the  carrier.  Suit  was 
instituted  to  recover  the  value  of  the  goods." 
The  court  said  in  its  opinion : 

"The  law  is  that  if  the  consignor  falsely  repre- 
sents to  the  common  carrier  that  the  goods  which 
he  desires  to  ship  are  of  a  certain  kind,  and  the 
carrier,  without  notice  or  knowledge  that  they  are 
of  a-  different  kind,  accepts  the  goods  and  fixes 
and  accepts  the  freight  and  delivers  to  the  con- 
signor a  bill  of  lading  on  the  basis  that  the  goods 
are  of  the  character  stated  by  the  consignor  when 
in  fact  the  goods  are  of  an  entirely  different  char- 
acter, upon  which  the  carrier  would  be  lawfully 
entitled  to  charge  a  higher  rate  of  freight,  the 
carrier  may,  upon  discovering  this  fact  before  the 
goods  are  delivered  to  the  consignee  at  the  place 
of  destination,  charge  the  excess  of  the  freight 
against  the  goods  and  hold  the  shipment  until  the 
additional  charges  are  paid.     Smith  v.  Findley, 
34  Kan.,  316;  Missouri,  Kansas  &  Texas  Rail- 
road Co.  v.  Trinity  County  Lumber  Co.,  1  Tex. 
Civ.  App.,  553.    The  evidence  tended  to  show  that 
appellant's  clerk,  who  first  classified  the  goods  as 
'emigrant  movables'  had  seen  the  goods  as  they 
were  being  loaded.    If  he  had,  then  the  company 
had  notice  of  the  character  of  the  shipment. ' ' 
The  court,  however,  held  that  inasmuch  as  the  agent 
of  the  carrier  was  familiar  with  and  knew  the  charac- 
ter of  the  goods,  it  was  not  entitled  to  collect  any  addi- 
tional freight  charges.    The  plaintiff  therefore  recov- 
ered the  value  of  his  goods. 
The  court  also  said: 

"Appellant  contends,  however,  that  even  if  it 


860 

knew  the  character  of  the  goods,  it  could  not  law- 
fully have  allowed  them  to  be  snipped  at  a  lower 
rate  than  the  usual  rate,  so  that  it  became  its  duty, 
even  after  collecting  the  freight  and  accepting 
the  goods,  to  re-classify  them  and  charge  the 
additional  freight  against  them,  for  the  reason 
that  not  to  do  so  would  have  been  an  unlawful  dis- 
crimination in  favor  of  the  consignor,  under  Sec- 
tions 125  and  126  of  Chapter  114,  Kurd's  Revised 
Statutes  of  1903. 

"Conceding,  for  the  sake  of  argument,  that 
making  a  rate  lower  than  the  ordinary  rate  would 
be  an  unlawful  discrimination  as  to  the  party 
favored  within  the  purview  of  the  statute  referred 
to,  we  still  think  appellant's  position  untenable. 
If  a  common  carrier  makes  an  unlawful  .discrimi- 
nation in  favor  of  a  shipper  by  contracting  to 
carry  his  goods  at  a  lower  rate  than  they  should 
bear  and  accepts  the  goods  and  carries  them  at 
that  rate,  it  cannot,  after  the  goods  have  reached 
their  destination,  charge  against  them  an  addi- 
tional amount  of  freight  sufficient  to  bring  the 
total  charge  up  to  the  proper  rate.  To  do  so 
would  permit  the  carrier  to  make  a  rate  lower 
than  it  properly  should  make,  to  secure  the  busi- 
ness, and  thereafter  take  advantage  of  its  own 
wrong  to  increase  the  charge  and  secure  the  usual 
compensation. ' ' 

The  usual  bill  of  lading  also  contains  the  following 
clause  : 

"Owner  or  consignee  shall  pay  freight  at  the 
rate  here  stated,  and  all  other  charges  accruing 
on  said  property,  before  delivery  and  according 
to  weights  as  ascertained  by  any  carrier  hereun- 
der;  and  if  upon  inspection  it  is  ascertained  that 
the  articles  shipped  are  not  those  described  in  this 
bill  of  lading,  the  freight  charges  must  be  paid 
upon  the  articles  actually  shipped,  and  at  the  rates 
and  under  the  rules  provided  for  by  published 
classifications. ' ' 

I  am  therefore  of  the  opinion  that  if  the  bottles  in 


861 

question  are  shipped  under  the  wrong  classification, 
the  inspectors  can  correct  the  same  and  collect  the 
proper  charges;  but,  if  the  carrier  has  knowledge  of 
the  character  of  the  goods  and  yet  places  the  articles 
in  the  wrong  classification,  it  cannot  recover  the  freight 
charges  based  on  the  higher  classification.  If  the  car- 
rier refuses  in  such  case  to  deliver  the  goods  without 
payment  of  the  added  freight,  the  shipper  may  recover 
the  same  or  the  value  thereof,  and  any  damages  he 
can  legally  prove. 

NOTE: — See,  however,  the  opinions  of  Nov.  7,  1906,  and  of  May  31, 
1907  (Illinois  Glass  Co.),  as  to  whether  under  the  Interstate  Commerce 
Act  a  carrier  is  bound  by  a  rate  quoted  by  mistake  when  its  tariff 
rate  is  different  than  the  quoted  rate. — Ed. 


SUMMARY  OF  THE  STATUTES  OF  THE  VAEIOUS  STATES  IN 
RELATION  TO  THE  DUTIES  AND  LIABILITIES  OF  INITIAL  AND 
CONNECTING  CARRIERS. 

(A.  L.  Goetzmann,  July  20,  1906.) 
"Some  time  ago  I  wrote  you  in  reference  to 
an  opinion  given  by  Levy  Mayer  at  one  of  the 
hearings  of  the  Uniform  Bill  of  Lading  Commit- 
tee, as  to  certain  states  wherein  the  initial  car- 
rier by  law  was  compelled  to  assume  responsibili- 
ity  for  loss  or  damage  on  freight  shipments.    In 
reply  you  advised  me  that  you  would  endeavor  to 
learn  in  which  states  this  law  was  effective,  since 
which  time  I  have  heard  nothing  concerning  it, 
and  as  our  member  is  quite  anxious  to  secure  the 
information  at  the  earliest  possible  date,  I  beg  to 
again  call  the  matter  to  your  attention,  and  re- 
quest if  entirely  consistent  that  you  secure  the 
information  at  your  early  convenience." 
In  the  following  states  there  are  statutes  in  refer- 
ence to  the  liabilities  of  initial  and  connecting  carriers : 
California:  Kerr's  Civil  Code  (1905),  Sec.  2201. 
Georgia:   Code  of  1895,  Sees.  2298,  2302,  2317, 
2318. 


862 

Iowa:    Laws  of  Iowa,  1904,  page  78;  Laws  of 
Iowa,  1906,  Ch.  89. 

Mississippi:    Code  of  1892,  Sec.  4301. 
Missouri:     Laws  of  Missouri,  1905,  pages  53, 
54. 

Montana:    Civil  Code  (1895),  Sees.  2914,  2915. 
Nebraska:    Compiled  Statutes  (1905),  page  538, 
par.  2069. 

New  York:  Birdseye's  Eevised  Statutes  (1902 >, 
page  2947,  par.  48. 

North  Dakota:  Eevised  Code  (1905),  Sees.  5696, 
5697. 

Oklahoma:    Eevised  Statutes  (1903),  Sees.  724, 
725. 

Rhode  Island:    General  Laws  (1896),  Ch.  187, 
Sec.  33. 

South   Carplina:     Code   of  Laws    (1902),   Sec. 
1710. 

South  Carolina:    Acts  of  South  Carolina,  1903, 
pages  1,  81. 

South  Dakota:  Eevised  Code  (1903),  Sec.  1602. 
Texas:     Eevised   Statutes    (1895),  Arts.   331a, 
331b. 

Virginia:      Code    of    1904,    Sees.    1294c    (24); 
1294L. 

In  the  following  states,  by  statute,  the  initial  car- 
rier is  made  liable  for  loss  or  damage  caused  by  con- 
necting carriers : 

Missouri:     Laws  of  Missouri,  1905,  pages  53, 
54. 

Nebraska:     Compiled    Statutes     (1905),    page 
538;  par.  2069. 

New  York:  Birdseye's  Eevised  Statutes  (1902), 
page  2947,  par.  48. 

Virginia:      Code    of    1904,    Sees.    1294c    (24); 
1294L. 

Under  the  Iowa  Act  (Laws  of  Iowa,  1904),  page 
78),  all  the  carriers  engaged  in  the  transportation 
may  be  held  liable  for  losses  unless  one  or  more  of 
the  carriers  shall  prove  that  it  or  they  were  not  liable, 
and  then  judgment  shall  go  against  the  remaining 
carrier. 


The  following  provision : 

"If  freight  addressed  to  a  place  beyond  the 
usual  route  of  the  common  carrier  who  first  re- 
ceived it,  is  lost  or  injured,  he  must  within  a  rea- 
sonable time  after  demand,  give  satisfactory  proof 
to  the  consignor  that  the  loss  or  injury  did  not 
occur  while  it  was  in  his  charge,  or  he  will  be  him- 
self liable  therefor." 
is  in  the  statutes  of  the  following  states : 

Montana:  Civil  Code  (1895),  Sec.  2915. 
North  Dakota:  Revised  Code  (1899),  Sec.  4249. 
Oklahoma:  Eevised  Statutes  (1903),  Sec.  725. 
South  Dakota:  Eevised  Code  1903,  Sec.  1602. 
In  other  states  it  is  provided  that  any  of  the  con- 
necting carriers  engaged  in  the  transportation  may 
be  held  liable. 

South  Carolina:  Acts  of  South  Carolina,  1903, 
page  1. 

Texas:  Revised  Statutes  (1895),  art.  331a,  331b. 
So-called  "Tracing  Acts"  exist  in  the  states  of 
Georgia  and  Mississippi.  Under  the  Georgia  Act 
(Code  of  1895,  Sec.  2302,  2317,  2318),  the  initial  car- 
rier is  required  to  trace  a  lost  or  damaged  shipment 
and  inform  the  shipper  when  and  by  which  carrier  the 
shipment  was  lost  or  damaged,  or  else  be  liable  itself. 
This  statute  was  held  void  so  far  as  it  affects  inter- 
state commerce  shipments  by  the  United  States  Su- 
preme Court  in  Cent,  of  Ga.  Ry.  Co.  v.  Murphy,  196  U. 
S.,  194  (1905).  The  Mississippi  Act  (Code  of  1892, 
Sec.  4301)  provides  that  the  last  of  several  carriers 
delivering  the  shipment  furnish  to  the  consignee  copies 
of  all  notations,  etc.,  on  the  books  of  each  carrier  in 
relation  to  the  freight  damaged,  etc.,  in  transit,  or  it 
will  be  presumed  to  have  caused  the  loss  or  damage. 

The  recent  amendment  to  the  Interstate  Commerce 
Act  (Sec.  20  provides) : 

"That  any  common  carrier,  railroad  or  trans- 
portation company  receiving  property  for  trans- 
portation from  a  point  in  one  state  to  a  point  in 
another  state  shall  issue  a  receipt  or  bill  of  lading 
therefor  and  shall  be  liable  to  the  lawful  holder 


864 

thereof  for  any  loss,  damage  or  injury,  to  such 
property  caused  by  it  or  by  any  common  carrier, 
railroad  or  transportation  company  to  which  such 
property  may  be  delivered  or  over  whose  line  or 
lines  such  property  may  pass,  and  no  contract,  re- 
ceipt, rule  or  regulation  shall  exempt  such  com- 
mon carrier,  railroad  or  transportation  company 
from  the  liability  hereby  imposed;  provided,  that 
nothing  in  this  section  shall  deprive  any  holder  of 
such  receipt  or  bill  of  lading  of  any  remedy  -or 
right  of  action  which  he  has  under  existing  law. 

That  the  common  carrier,  railroad  or  transpor- 
tation company  issuing  such  receipt  or  bill  of  lad- 
ing shall  be  entitled  to  recover,  from  the  common 
carrier,  railroad  or  transportation  company,  on 
whose  line  the  loss,  damage  or  injury  shall  have 
been  sustained  the  amount  of  such  loss,  damage  or 
injury  as  it  may  be  required  to  pay  to  the  own- 
ers of  such  property,  as  may  be  evidenced  by  any 
receipt,  judgment  or  transcript  thereof." 


IN  REFERENCE  TO  THE  TEXAS  LAW  OF  1905,  LEVYING  A  TAX 
UPON  THE  GROSS  RECEIPTS  OF  PRIVATE  CAR  LINES. 

(Barrett  Manufacturing  Company,  July  20, 1906.) 

' l  The  other  day,  when  I  called  on  you  I  referred 
to  the  affidavit  which  we  are  obliged  to  make  to 
the  State  of  Texas  covering  mileage  earned  by 
our  company  in  that  state  and  promised  to  send 
you  one  of  the  forms  which  you  will  find  enclosed 
herewith.  In  the  letter  which  accompanied  same 
from  Mr.  James  W.  Stephens,  comptroller,  Aus- 
tin, Texas,  he  requested  that  the  mileage  be  shown 
by  counties.  This  letter  was  forwarded  to  our 
New  York  office,  so  are  unable  to  send  it  to  you. 
Beg  to  state  that  it  is  almost  an  impossibility  for 
us  to  furnish  accurate  information  in  regard  to 
mileage  earned  in  any  specific  territory,  particu- 
larly as  to  counties.  If  you  can  advise  whether 
it  is  necessary  for  us  to  file  these  affidavits  we 
would  greatly  appreciate  it." 


865 

The  Texas  law  referred  to  is  as  follows:  (Acts  of 
Texas,  1905,  Ch.  148,  Sec.  11;  Sayle's  Supplement, 
1906,  page  530) : 

"Sec.  11.  Stock  and  other  car  companies  to 
pay  2  per  cent.  Every  person,  firm,  joint  stock 
association  or  corporation  owning  stock  cars,  re- 
frigerator and  fruit  cars  of  any  kind,  tank  cars 
of  any  kind,  coal  cars  of  any  kind,  furniture  cars, 
or  common  box  and  flat  cars,  and  leasing,  renting, 
operating,  hiring  or  charging  mileage  for  the  use 
of  such  cars,  shall  on  or  before  the  first  day  of 
April,  and  quarterly  thereafter,  through  its  super- 
intendent or  other  chief  officer,  or  authorized 
agent,  file  with  the  comptroller  of  public  accounts 
a  report  under  oath,  showing  the  amount  of  gross 
receipts  from  such  rentals  or  mileage,  or  other 
sources  of  revenues,  for  the  preceding  three 
months,  and  shall  pay  a  tax  of  2  per  cent,  on  their 
gross  receipts  from  all  rentals  or  mileage  or  other 
sources  of  revenue  received  from  any  railway 
companies  or  other  persons  or  from  all  other 
sources  within  this  state;  provided,  this  shall  not 
apply  to  the  mileage  and  per  diem  paid  by  one 
railway-  company  to  another  railway  company 
within  this  state  for  the  use  of  such  cars.  Said 
tax  herein  levied  shall  be  paid  to  the  state  treas- 
urer quarterly.  If  any  person,  firm,  joint  stock 
association  or  corporation  shall  fail  to  make  the 
report  and  pay  the  tax  as  above  provided,  for 
thirty  days  after  the  termination  of  any  quarter 
of  the  year,  each  and  every  such  person,  firm, 
joint  stock  association  or  corporation  so  failing 
shall  forfeit  and  pay  to  the  state  twenty-five  dol- 
lars for  each  day  said  report  and  payment  are 
delayed,  which  forfeiture  and  tax  shall  be  sued 
for  by  the  attorney  general,  in  the  name  of  the 
state.  And  it  is  hereby  provided  that  the 
cars  or  property  of  any  such  persons,  firm,  joint 
stock  association  or  corporation  shall  be  subject 
to  seizure  and  sale  whenever  found  in  this  state, 
to  pay  the  taxes,  penalties  and  costs  that  may  ac- 


866 

crue  under  this  article;  provided,  that  upon  'the 
request  of  the  comptroller  each  railroad  company 
in  the  State  of  Texas  shall  forthwith  and  within 
not  more  than  thirty  (30)  days  after  such  request 
shall  have  been  made,  report  to  said  comptroller 
under  oath  the  amounts  paid  by  it  for  the  use  of 
the  cars  of  the  kind  mentioned  in  this  section  with- 
in such  period  as  the  comptroller  shall  have  fixed 
and  to  what  companies,  associations  or  individuals 
the  same  was  paid  and  the  amount  paid  to  each 
and  the  dates  and  particulars  of  such  payments, 
and  if  any  railroad  shall  fail  to  make  any  report 
as  herein  provided  it  shall  forfeit  and  pay  to  the 
state  twenty- five  (25)  dollars  for  each  and  every 
day  during  which  said  report  is  delayed,  which 
shall  be  sued  for  by  the  attorney  general  in  the 
name  of  the  state.  For  the  purpose  of  suits  pro- 
vided for  herein,  venue  and  jurisdiction  are  here- 
by expressly  conferred  upon  the  courts  of  Travis 
County,  and  service  may  be  had  upon  any  officer 
or  agent  of  any  such  person,  firm,  company  or  cor- 
poration within  this  state,  and  if  no  officer  or 
agent  can  be  found  within  this  state,  service  may 
be  had  by  citation  by  publication  and  such  service 
shall  in  all  respects  be  held  legal  and  valid.  The 
tax  provided  for  in  this  article  shall  be  in  addi- 
tion to  all  other  taxes  levied  by  law. '  ' ' 
If  the  taxes  upon  gross  receipts  attempted  to  be  col- 
lected under  this  act  are  based  upon  receipts  derived 
from  interstate  traffic,  such  taxes  will  be  void  and  un- 
enforceable. 

In  Fargo  v.  Michigan,  121  U.  S.,  230  (1887),  it  was 
held,  that  while  a  state  may  tax  the  money  actually 
within  the  state,  after  it  has  passed  beyond  the  stage 
of  compensation  for  carrying  persons  or  property,  as 
it  may  tax  other  money  or  property  within  its  limits, 
yet  a  tax  upon  receipts  for  this  class  of  carriage 
specifically  is  a  tax  upon  the  commerce  out  of  which  it 
arises,  and  if  that  be  interstate  commerce,  it  is  void 
under  the  Constitution.  The  statute  of  the  State  of 
Michigan  under  which  this  tax  was  imposed  was  en- 


867 

titled,  "An  Act  to  provide  for  the  taxation  of  per- 
sons, co-partnerships,  association,  car-loaning  com- 
panies, corporations,  and  fast  freight  lines  engaged 
in  the  business  of  running  cars  over  any  of  the  rail- 
roads of  this  state,  and  not  being  exclusively  the  prop- 
erty of  any  railroad  company  paying  taxes  on  their 
gross  receipts."  Sections  1  and  2  required  reports 
to  be  made  to  the  Commissioner  of  Railroads  of  the 
gross  amount  of  their  receipts  for  freight  earned 
within  the  state  from  all  persons  and  corporations  run- 
ning railroad  cars  within  the  state.  The  Commis- 
sioner was,  by  par.  4,  required  to  make  and  file  with  the 
Auditor  General  on  the  first  day  of  June  of  each  year, 
a  computation  of  the  amount  of  tax  which  would 
become  due  on  the  first  day  of  July  next  from  each 
person,  association  or  corporation  liable  to  pay  such 
taxes.  Each  one  of  these  was,  by  par.  5,  required  to 
pay  to  the  state  treasurer  upon  the  statement  of  the 
auditor  general  an  annual  tax  of  two  and  one-half  per 
cent,  upon  its  gross  receipts. 

The  Merchants'  Dispatch  Transportation  Company 
carried  no  freight  between  points  exclusively  within 
the  State  of  Michigan ;  and  in  filing  its  schedule  it  set 
forth  its  gross  receipts  estimated  and  prorated  ac- 
cording to  the  mileage  of  its  cars  within  the  state, 
divided  into  two  classes.  In  the  first  class,  the  re- 
ceipts from  transportation  from  points  within  to 
points  without  the  state,  and  from  points  without  to 
points  within  the  state  were  given  as  $28,890.01;  in 
the  second  class  the  receipts  from  transportation  pass- 
ing entirely  through  the  state  to  and  from  other  states 
were  given  as  the  sum  of  $95,714.50.  The  auditor  of 
the  state  assessed  the  tax  upon  the  first  class  of  re- 
ceipts. This  was  held  void  as  a  tax  upon  interstate 
commerce. 

The  court  said : 

"Freight  carried  from  a  point  within  that  state 
to  other  states,  is  as  much  commerce  among  the 
states  as  that  which  passes  entirely  through  the 
state  from  its  point  of  original  shipment  to  its 
destination. ' ' 


868 

In  the  case  of  the  State  Freight  Tax,  15  Wall.,  232 
(1872),  and  State  Tax  on  Railway  Gross  Receipts,  15 
Wall.,  286  (1872),  it  was  held  that  a  tax  upon  freight 
taken  up  within  the  state  and  carried  out  of  it,  or 
taken  up  without  the  state  and  brought  within  it,  is  a 
burden  on  interstate  commerce  and,  therefore,  in  vio- 
lation of  the  constitutional  provision  that  Congress 
shall  have  power  to  regulate  commerce  with  foreign 
nations  and  among  the  several  states.  A  statute 
of  the  State  of  Pennsylvania  imposed  upon  all  the 
railroad  corporations  doing  business  within  that  state, 
as  well  as  others  engaged  in  the  carrying  trade,  a  spe- 
cific tax  on  each  two  thousand  pounds  of  freight  car- 
ried. The  Reading  Railroad  Company,  a  party  to 
the  suit,  in  making  its  report  under  this  statute, 
divided  its  freight  on  which  the  tax  was  to  be  levied 
into  two  classes,  namely,  freight  transported  between 
points  within  the  state  and  freight  which  either  passed 
from  within  the  state  out  of  it  or  from  without  the 
state  into  it.  The  Supreme  Court  of  Pennsylvania- 
decided  that  all  the  freight  carried  without  regard  to 
destination  was  liable  to  the  tax.  The  United  States 
Supreme  Court,  however,  held  that  freight  carried  en- 
tirely through  the  state  from  without,  and  the  other 
class  of  freight  brought  into  the  state  from  without  or 
carried  from  points  within  to  points  without,  all  came 
under  the  description  of  interstate  commerce  within 
the  meaning  of  the  Constitution ;  and  it  also  held  that 
freight  transported  from  and  to  points  exclusively 
within  the  limits  of  the  state  was  internal  commerce. 
The  taxing  law  of  the  state  was,  therefore,  valid  as 
to  the  latter  class  of  transportation,  but  with  regard 
to  the  others  it  was  invalid,  because  it  was  interstate 
commerce  and  the  state  could  lay  no  tax  upon  it. 

In  Pickard  v.  Pullman  Southern  Car  Co.,  117  U.  S., 
34  (1880),  it  was  held  that  a  statute  of  Tennessee  im- 
posing a  privilege  tax  of  $50  per  annum  on  every  sleep- 
ing car  run  over  a  railroad  in  Tennessee  was  void  so 
far  as  it  applied  to  interstate  commerce,  and  that 
taxes  levied  on  cars  engaged  in  interstate  transporta- 
tion were  void. 


869 

In  Phila.  &  So.  Steamship  Co.  v.  Pennsylvania,  122 
U.  S.,  326  (1887),  it  was  held  that  a  state  tax  of  Penn- 
sylvania upon  the  gross  receipts  of  a  steamship  com- 
pany which  are  derived  from  the  transportation  of 
persons  and  property  was  a  regulation  of  interstate 
commerce  and  void. 

In  Ratterman  v.  W.  U.  Telegraph  Co.,  127  U.  S., 
411  (1888),  it  was  held  that  a  single  tax  assessed  un- 
der the  laws  of  Ohio  upon  the  receipts  of  a  telegraph 
company  which  were  partly  derived  from  interstate 
commerce  and  partly  from  commerce  within  the  state 
and  which  were  capable  of  separation,  but  were  re- 
turned and  assessed  in  gross  and  without  separation 
or  apportionment  is  invalid  in  proportion  to  the  ex- 
tent that  such  receipts  were  derived  from  interstate 
commerce,  but  is  otherwise  valid. 

In  Leloup  v.  Mobile,  127  U.  S.,  640  (1888),  it  was 
held  that  a  general  license  tax  exacted  by  a  municipal- 
ity on  the  business  of  a  telegraph  company  affects  its 
entire  business,  interstate  as  well  as  domestic  and  is 
unconstitutional  and  void. 

In  W.  U.  Telegraph  Co.  v.  Alabama,  132  U.  S.,  472 
(1889),  a  statute  of  Alabama  imposed  a  tax  "on  the 
gross  amount  of  the  receipts  by  any  and  every  tele- 
graph company  derived  from  the  business  done  by  it 
in  this  state."  The  Western  Union  Telegraph  Com- 
pany reported  to  the  Board  of  Assessors  only  its  gross 
receipts  received  from  business  wholly  transacted 
within  the  state.  The  board  required  of  the  company 
a  further  return  of  its  gross  receipts  from  messages 
carried  partly  within  and  partly  without  the  state. 
The  company  made  such  further  return  and  the  tax 
imposed  upon  its  gross  receipts  as  shown  by  the  two 
returns.  It  was  held  that  the  statute  thus  construed 
was  a  regulation  of  commerce,  and  that  the  tax  im- 
posed upon  the  receipts  in  the  second  return  was  un- 
constitutional. 

In  Maine  v.  Grand  Trunk  Ey.  Co.,  142  U.  S.,  217 
(1891),  the  Maine  statute  requiring  railroads  operated 
within  the  state  to  pay  an  annual  tax  for  the  privilege 
of  operating,  to  be  determined  by  the  amount  of  gross 


870 

transportation  receipts,  and  providing  that  when  ap- 
plied to  a  railroad  lying  partly  within  and  partly  with- 
out the  state,  or  to  one  operated  as  a  part  of  a  line 
or  system  extending  beyond  the  state,  the  tax  shall  be 
equal  to  the  proportion  of  the  gross  receipts  in  the 
state,  to  be  ascertained  as  provided  by  the  statute,  was 
held  not  a  regulation  of  commerce  in  conflict  with 
the  Constitution,  and  a  tax  thereby  imposed  on  an  in- 
terstate railway  was  within  the  power  of  the  state  to 
levy.  The  court  held  that  this  was  simply  a  means 
of  ascertaining  the  value  of  the  privilege. 

In  Pacific  Express  Co.  v.  Seibert,  142  U.  S.,  339 
(1892),  a  Missouri  statute  levying  a  tax  upon  the  busi- 
ness of  an  express  company  done  within  the  state  was 
held  valid. 

In  Allen  v.  Pullman's  Palace  Car  Company,  191  U. 
S.,  171  (1903),  taxes  exacted  by  the  State  of  Tennessee 
from  a  sleeping  car  company  engaged  in  both  inter- 
state and  intrastate  traffic  under  a  statute  imposing 
an  annual  tax  of  $500  per  car  upon  sleeping  car  com- 
panies doing  business  in  the  state  which  makes  no  dis- 
tinction between  cars  used  in  interstate  traffic  or  in 
traffic  wholly  within  the  borders  of  the  state,  were  held 
void  as  an  attempt  by  the  state  to  impose  a  burden 
upon  interstate  commerce. 

The  court  there  said  (p.  179) : 

"The  act  in  its  terms  applies  to  cars  running 
through  the  state  as  well  as  those  whose  operation 
is  wholly  intra-state.  It  applies  to  all  alike,  and 
requires  payment  for  the  privilege  of  running  the 
cars  of  the  company  regardless  of  the  fact  whether 
used  in  interstate  traffic  or  in  that  which  is  wholly 
within  the  borders  of  the  state.  There  is  no 
decision  of  the  Supreme  Court  of  Tennessee  lim- 
iting the  act  in  its  operation  to  intra-state  traffic. 
It  is  true  that  the  comptroller  has  sought  to  re- 
strain the  operation  of  the  law  by  imposing  the 
tax  for  two  years  upon  cars  running  between 
Nashville  and  Memphis  and  between  Nashville 
and  Chattanooga  for  two  years,  and  fixing  one 
car  in  each  year  as  the  proportion  of  local  busi- 


871 

ness  done  on  interstate  cars  for  two  years.  But 
this  action  does  not  conclude  the  state  in  taxing 
for  other  years,  and  the  action  taken  by  the  comp- 
troller does  not  limit  the  terms  of  the  law  affect- 
ing interstate  commerce." 
And: 

"In  Osborne  v.  Florida,  164  U.  S.,  650,  a  license 
tax  upon   express   companies   was    sustained,   in 
view  of  the  decision  of  the   Supreme  Court  of 
that  state,  that  it  affected  only  business  of  the 
company  within  the  state.    The  statute  now  under 
consideration  requires   payment   of  the  sum  ex- 
acted for  the  privilege  of  doing  any  business  when 
the  principal  thing  to  be  done  is  interstate  traffic. 
We  are  not  at  liberty  to  read  into  the  statute 
terms  not  found  therein  or  necessarily  implied, 
with  a  view  to  limiting  the  tax  to  local  business, 
which  the  legislature  in  the  terms  of  the  act  impose 
upon  the  entire  business  of  the  company.     We 
are  of  opinion  that  taxes  exacted  under  the  act 
of  1887  are  void  as  an  attempt  by  the  state  to 
impose  a  burden  upon  interstate  commerce." 
Under  the  decisions  above  noted  it  is  beyond  the 
power  of  the  State  of  Texas  to  impose  any  tax  upon 
the  gross  receipts  from  cars  engaged  in  trasporting 
property   from   points  within   to   points   without,   or 
from  points  without  to   points   within   the   State   of 
Texas.     In  Ratterman  v.  W.  C.  Tel.  Co.,  127  U.  S.r 
411,  424  (1888),  the  Supreme  Court  said: 

"Where  the  subjects  of  taxation  can  be  sepa- 
rated so  that  that  which  arises  from  interstate 
commerce  can  be  distinguished  from  that  which 
arises   from  commerce   wholly  within  the   state, 
the  court  will  act  upon  the  distinction,  and  will 
restrain  the  tax  on  interstate  commerce,  while  per- 
mitting the  state  to  collect  that  arising  from  com- 
merce solely  within  its  own  territory." 
By  Section  1,  Article  8,  of  the  Constitution  of  Texas, 
the  legislature  is  authorized  to  "impose  occupation 
taxes  both  upon  natural  persons  and  upon  corpora- 
tions,  other   than   municipal,   doing  business   in   the 


872 

state."  It  is  within  the  power  of  the  state  to  pro- 
vide for  privilege  or  occupation  taxes  based  upon 
gross  receipts  collected  from  traffic  entirely  within  the 
state.  It  is  in  the  nature  of  a  tax  upon  the  privi- 
lege of  running  cars  within  the  state  for  local  traffic. 
But  such  a  tax  can  in  no  event  be  based  upon  receipts 
derived  from  interstate  commerce. 

I  am  of  the  opinion  that  any  taxes  attempted  to  be 
levied  upon  receipts  from  transportation  from  points 
within  to  points  without,  or  from  points  without  to 
points  within  the  state  are  invalid. 

I  advise  that  if  any  return  be  made  on  the  schedule 
the  Barrett  Manufacturing  Company  limit  its  state- 
ment of  gross  receipts  derived  solely  from  traffic  be- 
tween points  entirely  within  the  state.  There  is  no 
provision  of  the  law  requiring  the  return  to  be  made 
by  counties  and  it  is  not  necessary  so  to  do.  If  the 
state  attempts  to  collect  taxes  on  the  receipts  from  in- 
terstate traffic,  such  action  may  be  restrained. 

On  July  24,  1901,  I  rendered  an  opinion  to  the  Illi- 
nois Zinc  Company  in  reference  to  a  similar  law  passed 
by  the  legislature  of  Indiana.  I  there  stated  that  if 
the  Zinc  Company  was  not  doing  business  in  Indiana, 
but  merely  shipped  its  own  goods  from  Illinois  to  In- 
diana, in  its  own  cars,  and  the  cars  when  emptied 
were  returned  to  the  principal  place  of  business  of 
the  company  in  Illinois,  and  were  not  used  in  any  other 
way,  and  the  Zinc  Company  did  no  other  business  of 
any  kind  in  Indiana,  that  in  such  a  case  the  situs  of  the 
cars  was  in  Illinois  and  not  in  Indiana,  and  therefore 
the  Zinc  Company  did  not  come  within  the  purview  of 
the  act  in  question. 

If  the  methods  of  doing  business  pursued  by  the 
Barrett  Company  of  Texas  are  similar  to  those  then 
pursued  by  the  Zinc  Company  in  Indiana,  I  am  of  the 
opinion  that  the  Texas  law  need  not  be  complied  with, 
even  if  it  be  valid. 

P.  S. — Since  writing  the  above  there  has  been  pub- 
lished the  opinion  of  the  Texas  Court  of  Civil  Ap- 
peals in  the  case  of  Galveston,  etc.,  Ry.  Co.  v.  David- 
son, 93  S.  W.,  436  (July,  1906),  which  holds  that  the 


873 

Gross  Receipts  Tax  Act  levying  a  tax  upon  the  gross 
receipts  of  railroads  (Acts  of  Texas,  1905,  ch.  141)  is 
unconstitutional  and  void.  While  this  is  not  the  iden- 
tical chapter  of  the  statute  under  which  the  tax  on 
gross  receipts  of  car  lines  is  levied,  the  same  reason- 
ing in  holding  unconstitutional  the  statute  levying  a 
tax  on  the  gross  receipts  is  applicable  to  the  statute 
in  reference  to  taxes  on  car  lines,  etc.  The  court  en- 
joined the  state  officials  from  proceeding  to  levy  and 
collect  the  taxes  as  required  by  the  act. 

There  is  a  certain  distinction  between  the  section  of 
the  statute  as  to  taxes  on  gross  receipts  of  railroads 
and  upon  gross  receipts  of  car  lines,  in  that  the  lat- 
ter section  contains  the  expression  "or  from  all  other 
sources  within  this  state."  It  is  doubtful  whether 
"within  this  state"  limits  the  taxes  solely  to  intrastate 
receipts. 

I  advise  that  the  Barrett  Manufacturing  Company 
make  no  payment  of  taxes  on  any  of  its  gross  receipts 
until  the  Supreme  Court  of  Texas  has  passed  upon 
the  question. 


EMPLOYMENT   OF    CHILDREN    UPON   HAZARDOUS   MACHINERY 
UNDER   THE  ILLINOIS   CHILD  LABOR  LAW. 

(Foley  Mfg.  Co.,  July  20,  1906.) 
"We  want  to  know  whether  or  not  there  is 
danger  of  liability  for  employing  boys  between 
the  ages  of  14  and  16  on  machinery,  on  work  that 
might  be  called  hazardous.    This  matter  may  have 
been  covered  heretofore,  but  if  so  it  has  escaped 
writer's  attention." 
Section  11  of  the  Act  of  May  15, 1903,  provides : 

"EMPLOYMENT  FORBIDDEN  CHILDREN  UNDER  SIX- 
TEEN YEARS  OF  AGE.  No  child  under  the  age  of  six- 
teen years  shall  be  employed  at  sewing  belts,  or 
to  assist  in  sewing  belts,  in  any  capacity  whatever  ; 
nor  shall  any  child  adjust  any  belt  to  any  ma- 
chinery; they  shall  not  oil  or  assist  in  oiling,  wip- 
ing or  cleaning  machinery ;  they  shall  not  operate 


874 

or  assist  in  operating  circular  or  band  saws,  wood- 
shapers,  wool-jointers,  planers,  sandpaper  or 
wood-polishing  machinery,  emery  or  polishing 
wheels  used  for  polishing  metal,  wood-turning  or 
boring  machinery,  stamping  machines  in  sheet 
metal  and  tinware  manufacturing,  stamping  ma- 
chines in  washer  and  nut  factories,  operating  cor- 
rugating rolls,  such  as  are  used  in  roofing  fac- 
tories, nor  shall  they  be  employed  in  operating 
any  passenger  or  freight  elevators,  steam  boiler, 
steam  machinery,  or  other  steam  generating  ap- 
paratus, or  as  pin  boys  in  any  bowling  alleys; 
they  shall  not  operate  or  assist  in  operating,  dough 
brakes,  or  cracker  machinery  of  any  description; 
wire  or  iron  straightening  machinery;  nor  shall 
they  operate  or  assist  in  operating  rolling  mill 
machinery,  punches  or  shears,  washing,  grinding 
or  mixing  mill  or  calendar  rolls  in  rubber  manu- 
facturing, nor  shall  they  operate  or  assist  in  op- 
erating laundry  machinery;  nor  shall  children  be 
employed  in  any  capacity  in  preparing  any  com- 
position in  which  dangerous  or  poisonous  acids 
are  used,  and  they  shall  not  be  employed  in  any 
capacity  in  the  manufacture  of  paints,  colors  or 
white  lead;  nor  shall  they  be  employed  in  any 
capacity  whatever  in  operating  or  assisting  to 
operate  any  passenger  or  freight  elevator;  nor 
shall  they  be  employed  in  any  capacity  whatever 
in  the  manufacture  of  goods  for  immoral  pur- 
poses, or  any  other  employment  that  may  be  con- 
sidered dangerous  to  their  lives  or.  limbs,  or  where 
their  health  may  be  injured  or  morals  depraved; 
nor  in  any  theater,  concert  hall,  or  place  of  amuse- 
ment wherein  intoxicating  liquors  are  sold;  nor 
shall  females  under  sixteen  years  of  age  be  em- 
ployed in  any  capacity  where  such  employment 
compels  them  to  remain  standing  constantly." 
The  above  section  has  been  recently  construed  in  the 
case  of  Swift  v.  Rennard,  119  111.  App.,  173,  and  it  was 
held  that  the  phrase  "or  any  other  employment"  does 
not  refer  to  the  list  enumerated  in  the  section,  but  is 


875 

broad  enough  to  include  any  employment  which  may 
be  considered  dangerous.  There  is  therefore  in  my 
opinion  serious  "danger  of  liability  for  employing 
boys  between  the  ages  of  14  and  16  on  machinery  or 
work  that  might  be  called  hazardous." 


AS  TO  THE  AMOUNT  OF  FEES  THAT  SHOULD  BE  CHAEGED  FOE 
INSPECTING  AND  SEALING  YAED  MEASUEES  UNDEE  THE 
CHICAGO  OEDINANCES. 

(W.  D.  Allen  Mfg.  Co.,  July  20,  1906). 

"For  several  years  when  the  department  of 
weights  and  measures  from  the  City  Hall  have 
been  in  here  we  have  had  a  little  controversy  with 
them  about  the  100  foot  measures  we  have  on  our 
floors  for  the  sake  of  convenience.  We  have  the 
figures  for  100  feet  tacked  down  on  our  floor  in  we 
think  three  places  and  when  these  representatives 
come  in  from  the  City  Hall  they  have  measured 
each  100-ft.  lengths  and  charged  us  for  certifying 
to  the  length  of  33  yard  sticks  in  each  case.  It 
looked  to  the  writer  like  a  mild  form  of  graft,  and 
while  we  do  not  care  for  the  amount  in  contro- 
versy, we  object  to  being  imposed  upon  this  way 
and  we  received  the  enclosed  notice  this  morning. 

These  people  advise  us  that  it  is  customary  to 
collect  this  way  from  other  people.  We  think  it 
is  an  imposition,  and  we  would  like  to  know  if 
your  legal  department  will  take  this  matter  up 
and  make  a  test  case  of  it." 

Section  2466  of  the  Eevised  Municipal  Code  of  Chi- 
cago of  1905  (Tolman)  provides: 

"2466.  ANNUAL  AND  SEMI-ANNUAL  INSPECTIONS. — 
It  shall  be  the  duty  of  said  inspector  to  inspect  and 
examine  once  in  each  year  all  weights,  measures, 
scale  beams,  patent  balances,  steel-yards  and  other 
instruments  used  for  weighing  and  measuring  in 
the  city,  except  track  scales  and  scales  of  a  ca- 
pacity of  three  tons  or  upwards,  which  shall  be 
inspected  once  in  every  six  months,  and  to  stamp 
with  a  suitable  seal  all  weights  and  measures  and 


876 

scales  so  used  which  he  may  find  accurate,  and  de- 
liver to  the  owner  thereof  a  certificate  of  their 
accuracy. ' ' 

Section  2467  provides: 

"2467.  EEGISTER — REPORT.  It  shall  be  the  duty 
of  the  said  inspector  to  make  a  register  of  all  the 
weights,  measures,  scale  beams,  patent  balances, 
steelyards,  and  other  instruments  used  for  weigh- 
ing, inspected  and  sealed  by  him,  in  which  he  shall 
state  the  names  of  the  owners  of  the  same,  and 
whether  they  are  conformable  to  the  standard  of 
the  state." 

Section  2473  provides  the  fees  for  inspection  as  fol- 
lows: 

"For  inspecting  and  selling  yard  measures, 
each  .05." 

Section  2476  provides: 

"2476.  INSPECTION  OBLIGATORY.  Every  person 
using  weights,  measures,  scale  beams,  patent  bal- 
ances, steelyards,  or  any  instrument,  in  weighing 
or  measuring  any  article  intended  to  be  purchased 
or  sold  in  the  city,  or  in  weighing  or  measuring 
any  person  or  animal  for  hire  or  reward  shall 
cause  the  same  to  be  inspected  and  sealed  by  the 
inspector  of  weights  and  measures  in  accordance 
with  the  provisions  of  this  chapter." 

Section  2480  provides: 

1 1 2480.  CERTIFICATE  REQUIRED.  Any  person  who 
shall,  in  weighing  or  measuring  any  article  for 
purchase  or  sale  within  the  city,  use  any  weight, 
measure,  scale  beam,  patent  balance,  steelyard,  or 
other  instrument  or  who  shall  maintain  or  operate 
any  weight,  measure,  scale  beam,  patent  balance, 
steelyard,  or  other  instrument,  whether  automatic 
or  otherwise,  used  for  the  purpose  of  weighing  or 
measuring  any  person  or  animal  for  hire  or  re- 
ward, which  has  not  been  sealed  or  for  which  the 
aforesaid  certificate  has  not  been  obtained  from 
the  inspector,  as  required  by  this  chapter,  shall 
be  fined  not  less  than  five  nor  more  than  twenty- 
five  dollars  for  each  offense." 


Section  2481  provides: 

"2481.  INCORRECT  OR  FAULTY  MEASURES  OR 
SCALES.  If  any  person  shall  use,  maintain  or  oper- 
ate in  the  city,  in  weighing  or  measuring  as  afore- 
said, any  weight,  measure,  scale  beam,  patent  bal- 
ance, steelyard,  or  other  instrument,  which  shall 
not  be  conformable  to  the  standard  of  this  state, 
or  shall  use  in  weighing,  as  aforesaid,  any  scale 
beam,  patent  balance,  steelyard,  or  other  instru- 
ment, which  shall  be  out  of  order  or  incorrect,  or 
which  shall  not  balance,  he  shall  be  fined  for  every 
such  offense  not  less  than  twenty-five  dollars  nor 
more  than  one  hundred  dollars." 
Section  2482  provides : 

"2482.    REFUSAL  TO  EXHIBIT.    No  person   shall 
refuse  to  exhibit  any  weight,  measure,  scale  beam, 
patent  balance,  steelyard,  or  other  instrument,  to 
said  inspector  for  the  purpose  of  being  so  in- 
spected and  examined,  under  a  penalty  of  not  less 
than  twenty-five  dollars  for  each  offence." 
If  the  measures  in  question  were  used  by  the  com- 
pany in  measuring  any  article  intended  to  be  pur- 
chased or  sold  within  the  city  they  are  subject  to  in- 
spection by  the  City  of  Chicago,  as  provided  by  the 
ordinance   above   quoted.      The  ordinance  is  passed 
under  the  police  power  of  the  city  and  is  a  valid  ordi- 
nance. 

A  more  difficult  question  is  presented  as  to  the 
amount  of  the  charge  for  the  inspection.  Section 
2473  prescribes  various  fees  for  inspection.  The  fees 
for  the  inspection  of  scales  vary  according  to  the 
capacity  of  the  scales;  the  fees  for  the  inspection  of 
liquid  and  dry  measures  vary  according  to  the  capacity 
of  the  measure. 

The  provision  as  to  other  measures  is 

"for  inspecting  and  sealing  yard  measures,  each, 
.05." 

This  is  the  only  reference  in  the  law  to  yard  meas- 
ures. If  the  term  "yard  measure"  as  used  in  the  ordi- 
nance means  an  instrument  used  for  the  purpose  of 
measuring  yard  lengths,  it  is  clear  that  the  charge 


878 

could  not  exceed  five  cents  for  each  measure  irrespec- 
tive of  its  length. 

In  the  Century  Dictionary  "yard  measure"  is  thus 
defined:  "A  measure  of  3  feet  in  length,  made  of 
either  rigid  or  flexible  material." 

If  the  term  "yard  measure"  is  used  in  the  ordinance 
as  meaning  a  measure  three  feet  in  length,  it  is  prob- 
able that  the  inspector  is  entitled  to  charge  five  cents 
for  each  yard  inasmuch  as  it  is  the  clear  intention  of 
the  city  council  to  make  the  fees  proportionate  to  the 
amount  of  labor  performed.  The  evident  intent  of  the 
city  council  was  to  make  the  fee  dependent  upon  the 
capacity,  and  it  is  so  expressly  specified  with  reference 
to  liquid  and  dry  measures,  scales,  etc.  Furthermore 
the  amount  of  labor  involved  in  inspecting  a  100  or 
1000  "yard  measure"  is  manifestly  greater  than  if 
the  measure  consisted  of  only  one  yard.  A  counter  in 
a  dry  goods  store  may  be  100  or  200  feet. 

The  question  is  not  free  from  doubt  and  until  the 
question  is  finally  passed  upon  by  the  courts,  it  is  very 
difficult  to  say  what  the  exact  outcome  will  be,  but  I  am 
inclined  to  the  opinion  that  the  city  inspector's  con- 
struction will  be  upheld. 


AS  TO  THE  RIGHT  OF  THE  CITY  OF  CHICAGO  TO  GRANT  BY 
ORDINANCE  OR  OTHERWISE  PERMISSION  TO  MERCHANTS  TO 
BUILD  PLATFORMS  FOR  BULKHEADS  IN  PUBLIC  STREETS. 

(Reid,  Murdoch  &  Company,  July  20,  1906.) 

"There  was  an  opinion  filed  in  the  Branch  Ap- 
pellate Court  (First  District)  May  29th,  1906,  en- 
titled as  follows: 

*  Chicago  Cold  Storage  Warehouse  Company, 
City  of  Chicago,  Frederick  W.  Blocki,  Commis- 
sioner of  Public  Works,  Michael  J.  Doherty,  super- 
intendent of  streets  and  alleys,  plaintiffs  in  error, 
v.  The  People  ex  rel.  William  E.  Stirling,  Charles 
E.  Brown,  Hugh  McBirney  Johnston,  Robert  B. 
Gregory,  and  Hugh  J.  McBirney,  defendants  in 
error. ' 
As  we  understand  it,  this  case,  in  substance,  de- 


879 

nies  the  right  of  the  city  to  grant  by  ordinance  or 
otherwise  permission  to  merchants  to  build  plat- 
forms for  bulk-heads  on  a  public  street.  We  be- 
lieve the  streets  were  intended  for  use  in  business 
subject  to  such  regulation  as  the  city  may  see  fit 
to  impose  to  protect  the  public  and  that  possibly 
all  that  may  be  said  on  the  subject  is  not  set  forth 
in  that  case  and  that  if  the  doctrine,  as  laid  down, 
is  permitted  to  become  a  settled  rule  of  law  in  this 
city,  it  will  be  very  prejudicial  to  the  interests  of 
Chicago. 

As  you  undoubtedly  are  aware  bulk-heads  are 
constructed  to  avoid  the  use  of  skids  and  facili- 
tate the  use  of  the  street  both  by  the  merchant  and 
public,  it  being,  we  think,  conceded  by  all  that  a 
bulk-head  is  far  superior  to  the  skid  system.  To* 
go  a  step  further,  if  we  are  not  entitled  to  use 
either  bulk-head  or  skid,  then,  it  must  mean  that 
we  are  substantially  barred  from  transacting  busi- 
ness in  buildings  abutting  public  streets.  We 
think  you  will  agree  with  us  that  it  affects  all  mer- 
chants and  is  important  to  have  the  case  reviewed 
by  the  Supreme  Court  and  presented  in  the  best 
possible  light  to  that  court  and  to  that  end,  we 
thought  possibly  it  could  be  handled  to  better  ad- 
vantage through  the  General  Counsel  of  your  as- 
sociation than  elsewhere. 

Kindly  advise  whether  the  association  will  fol- 
low the  subject  through  or  not." 
The  opinion  of  the  Branch  Appellate  Court  in  Chi- 
cago Cold  Storage  Company  v.  People  ex  rel.  Stirling, 
127  111.  App.,  179  (June  2,  1906).    The  court,  by  Jus- 
tice Baker,  said: 

"It  is  conceded  by  plaintiffs  in  error  that  it  is 
not  within  the  power  of  any  municipality  in  this 
State  to  give  any  person  the  exclusive  right  to  use 
any  part  of  a  street  permanently,  but  it  is  said 
that  a  city  may  readjust  the  plane  of  its  sidewalks 
to  meet  new  needs  and  conditions ;  that  this  is  all 
that  was  attempted  to  be  done  by  this  ordinance, 
and  therefore  the  city  was  clearly  within  its  cor- 


880 

porate  powers  in  passing  the  ordinance.  No 
doubt  the  city  has  the  power  to  establish  the 
grade  and  level  of  a  sidewalk  and  to  alter  and 
change  such  grade  and  level,  'to  meet  new  needs 
and  conditions, '  provided  the  need  is  a  public  and 
not  a  mere  private  need,  the  condition  one  in 
which  a  change  is  demanded  by  considerations  of 
public  benefit,  and  public  interest,  and  not  one 
where  a  change  is  made  to  further  and  advance  a 
mere  private  interest  to  the  detriment  of  the  in- 
terest of  the  general  public.  But  this  ordinance 
does  not  establish  the  grade  or  level  of  the  side- 
walk on  the  west  side  of  Indiana  avenue  in  the 
vicinity  of  the  premises  described  therein.  It  as- 
sumes that  there  is  in  front  of  said  premises,  and 
north  and  south  of  said  premises  a  sidewalk.  It 
provides  that  said  Warehouse  Company  may,  upon 
complying  with  the  conditions  therein  described, 
construct  in  front  of  its  premises  'a  platform  or 
bulkhead;  that  said  platform  shall  be  elevated 
above  the  remainder  of  the  sidewalk'  a  certain 
distance ;  that  at  the  expiration  of  the  term  there- 
in granted  said  'platform  or  bulkhead  shall  be  re- 
moved by  said  grantee  *  *  *  and  if  so  re- 
moved the  sidewalk  shall  be  restored  to  its  proper 
level. ' 

It  is  true  that  the  ordinance  provides  that  said 
platform  shall  be  considered  the  sidewalk  in  front 
of  said  premises,  and  that  signs  with  the  words 
'public  sidewalk'  shall  be  displayed  at  each  end 
of  such  structure.  But  in  passing  upon  the  valid- 
ity of  the  ordinance  regard  must  be  had  to  the 
substance  rather  than  to  the  form,  to  the  purpose 
and  intention  of  the  Council  as  the  same  appear 
in  the  ordinance,  rather  than  to  the  language  of 
any  particular  clause  or  phrase.  Looking  to  the 
substance  of  this  ordinance  to  the  object  sought 
to  be  attained,  to  the  interest  sought  to  be  bene- 
fited, to  the  intention  of  the  Council,  as  the  same 
appear  in  the  terms  and  provisions  of  the  ordi- 
nance, and  it  must,  in  our  opinion,  be  held  in  effect 


881 

to  grant  to  said  Warehouse  Company  the  right  to 
construct  and  maintain  upon  a  public  sidewalk,  in 
a  public  street,  a  structure  for  the  private  use 
and  benefit  of  said  Warehouse  Company,  which 
structure  serves  no  public  use.  but  on  the  contrary 
interferes  in  a  substantial  manner  with  the  use  of 
such  sidewalk  by  the  public,  and  therefore  must 
be  held  to  be  invalid.  It  is  not  a  sufficient  answer 
to  say  that  the  sidewalk  is  not  wholly  obstructed 
by  the  platform  in  question;  that  persons  desir- 
ing to  pass  in  front  of  said  premises  may  leave  the 
sidewalk  at  one  end  of  such  platform,  go  up  five 
or  six  steps,  pass  over  and  along  the  platform, 
and  at  the  other  end  go  down  five  or  six  steps  to 
the  sidewalk.  It  is  sufficient  that  it  appears  that 
the  ordinance  was  passed  in  l;he  interest  of  the 
Warehouse  Company,  that  it  grants  to  that  Com- 
pany, to  further  and  advance  a  mere  private  in- 
terest, a  right  not  given  to  other  property  owners 
on  said  street,  and  that  its  effect  is  to  interfere  in 
a  substantial  manner  with  the  right  of  the  public 
to  the  free  and  unobstructed  use  of  a  sidewalk, 
which  is  in  and  a  part  of  a  public  street. ' ' 
It  is  the  settled  law  in  this  State  that  in  the  absence 
of  express  statute,  a  city  has  no  power  to  grant  to  an 
individual  or  corporation  an  easement  of  a  private 
nature  in  a  public  street,  or  anv  portion  thereof. 

Field  v.  Barling,  149  111.,  556. 

Hibbard,  Spencer,  Bartlett  &  Co.  v.  Chicago, 
173  111.,  91. 

Snyder  v.  Mt.  Pulaski,  176  111.,  397. 

Penn  Co.  v.  Chicago,  181  111.,  289. 

People  v.  Chicago,  193  111.,  543. 

In  Hibbard,  etc.,  Co.  v.   Chicago,  173  111.,   91,   96 
(1898),  the  Supreme  Court  said: 

"The  public  streets  of  a  city  are  dedicated  to 
the  public  for  public  use  and  are  subject  to  the 
control  and  management  of  the  city  council,  but 
that  body  has  no  power  to  alien  or  otherwise  en- 
cumber such  streets  so  long  as  they  are  public 
streets,  but  must  hold  them  in  trust  for  public 


882 

uses  only.  The  municipal  corporation  can  grant 
no  easement  or  right  therein  not  of  a  public  na- 
ture, and  the  entire  street  must  be  maintained  for 
public  use,  hence  no  individual  or  corporation  can 
acquire  any  portion  of  the  street  for  exclusive  pri- 
vate use  to  the  exclusion  of  the  public.  The  city 
council  has  no  power  to  grant  such  use.  (Field 
v.  Barling,  149  111.,  556.)  Whilst  it  may  grant  in- 
dividuals or  corporations  a  temporary  use  for 
such  time  and  in  such  way  as  not  to  interfere  with 
public  use,  yet  there  is  no  power  in  the  munici- 
pality to  sell  or  grant  for  private  use  a  public 
street  and  exclude  the  public  therefrom." 
And  (p.  99): 

"The  right  of  the  public  to  the  exclusive  use  of 
the  streets  for  public  purposes  is  inconsistent  with 
the  right  of  a  private  citizen  to  encroach  thereon 
by  the  erection  of  a  permanent  structure.  The 
streets  are  held  in  trust  by  the  municipality,  and 
this  fact  prevents  the  municipality  from  author- 
izing any  encroachment  on  or  obstruction  of  them 
by  such  structures.  The  mere  consent  of  the  city 
council  by  resolution  or  order  gives  no  vested 
right." 

By  an  act  of  May  18,  1905,  the  State  Legislature 
granted  certain  powers  to  the  City  Council  of  Chi- 
cago. The  Act  of  May  18,  1905  (Laws  of  1905,  page 
109,  Sec.  5),  provides: 

"The  City  Council  may  also  regulate  the  use  of 
space  over  the  streets,  alleys  and  public  places  of 
the  city,  and  upon  payment  of  proper  compensa- 
tion, to  be  fixed  by  ordinance,  may  permit  the  use 
of  space  more  than  twelve  feet  above  the  level 
thereof. ' ' 

This  provision,  however,  will  not  permit  the  use  of 
bulkheads.  As  the  law  now  stands  it  is  beyond  the 
power  of  the  City  Council  to  authorize  the  use  of 
bulkheads  in  the  streets  by  private  corporations  to  the 
exclusion  of  the  public.  I  expressly  abstain  from 
passing  upon  the  question  whether  even  the  Legis- 
lature can  authorize  the  City  to  pass  an  ordinance 


883 

which  will  permit  public  property  to  be  used  for  pri- 
vate purposes. 

NOTE: — The  case  in  the  Appellate  Court  referred  to  in  the  above 
opinion  was  subsequently  affirmed  by  the  Supreme  Court  in  Chicago 
Cold  Storage  Co.  v.  The  People,  224  111.,  287  (December  22,  1906).— 
Ed. 


THE  RIGHT  OF  A  TENANT  TO  LEASE  THE  SIDE  OF  A  BUILDING 
FOE  ADVERTISING  PURPOSES. 

(Selz,  Schwab  &  Co.,  July  20,  1906.) 
"We  would  like  to  have  you  obtain  for  us  from 
your  legal  department  an  opinion  in  regard  to  the 
right  of  a  tenant  to  lease  the  side  of  a  building  on 
which  to  paint  a  sign.  An  advertising  company  is 
doing  a  lot  of  this  sign  painting  work  for  us  in 
several  states,  and  at  present  is  working  in  Illi- 
nois, and  a  dispute  has  come  up  between  the  owner 
of  a  building  and  the  tenant  as  to  which  has  the 
right  to  lease  the  space  on  the  building  for  sign 
purposes." 

The  right  of  the  tenant  to  lease  the  side  of  a  build- 
ing for  advertising  purposes  will  depend  upon  the 
terms  of  the  lease  under  which  he  holds  the  premises. 
If  the  tenant  holds  by  lease  the  entire  premises  he  will 
have  the  right  to  let  the  side-walls  for  advertising  pur- 
poses, provided  there  are  no  conditions  to  the  contrary 
in  the  lease.  The  outside  wall  of  a  building  leased  or 
conveyed  passes  by  the  lease  or  deed  as  much  as  the 
inside  of  the  same  wall. 

In  Riddle  v.  Litchfield,  53  N.  H.,  503,  A  leased  to  B 
a  certain  store  known  as  "No.  191  Elm  street."  The 
plaintiff  owned  this  building  and  brought  suit  against 
the  defendants,  the  tenants,  for  money  received  by  the 
tenants  as  rent  of  the  outside  walls  of  the  building 
for  advertising  purposes.  It  was  held  that  the  lessees 
had  the  right  to  rent  the  outside  walls  for  advertising 
purposes. 

The  court  said: 

"Now,  it  will  hardly  be  contended  that  the  out- 
side wall  of  a  store  or  house  is  not  essential  for 


884 

the  reasonable  and  proper  enjoyment  of  the  in- 
terior of  the  building.  The  outer  side  of  the  wall 
is  but  one  side  of  the  same  wall  that  has  an  inner 
side,  and  the  removal  of  the  wall  removes  both 
sides. 

If,  then,  a  lessee  or  grantee  may  have  the  wall 
which  he  pays  for,  it  would  seem  that  he  should  be 
entitled  to  the  use  of  it,  not  only  for  the  purposes 
indispensable  to  the  occupation  of  the  building,  but 
also  for  any  purpose  of  service  or  profit  not  in- 
consistent with  the  lawful  and  reasonable  enjoy- 
ment of  the  property. 

If  he  uses  the  tenement  for  a  store,  he  would 
ordinarily  be  entitled  to  affix  his  signs  to  the  outer 
wall ;  an  awning,  also,  if  such  appendage  would  be 
deemed  necessary  or  convenient.  He  may  sus- 
pend his  wares  upon  the  building,  if  nobody  is  in- 
commoded thereby,  and  he  may  cover  the  outer 
walls  with  his  advertisements  of  the  merchandise 
which  he  keeps  for  sale  within,  if  he  does  not  in- 
jure the  building,  nor  obstruct  the  public  passage, 
nor  offend  the  public  eye  and  taste  by  unseemly 
exhibitions,  or  otherwise  violate  the  laws.  And 
if  he  may  thus  encumber  and  cover  the  exterior 
walls  of  his  store,  clearly  his  lessor  cannot  do  the 
same  thing  at  the  same  time.  The  occupation  by 
both  parties  to  the  lease,  for  incongruous  pur- 
poses, is  impossible.  If  the  premises  are  leased 
for  a  clothing  store,  for  example,  the  lessor  cannot 
use  for  a  bulletin  board  the  space  which  the  lessee 
may  reasonably,  properly,  conveniently,  and  profit- 
ably occupy  with  the  ready-made  garments  which 
he  there  suspends  for  exhibition  and  sale. 

Who,  then,  shall  occupy  the  exterior  walls  of  the 
demised  building?  The  landlord,  who  for  a  suffi- 
cient consideration  has  parted  with  the  possession 
and  use  of  the  property,  usque  ad  filum  viae  (if  it 
is  bounded  by  a  street) !  or  the  tenant,  who  cannot 
have  the  full  and  complete  as  well  as  reasonable 
beneficial  enjoyment  of  the  property  for  which  he 
pays  rent,  without  the  opportunity  to  display  his 


885 

wares  and  his  advertisements  upon  the  external 
walls  of  the  building? 

The  lessee  who  affixes  his  signs  and  advertise- 
ments upon  the  wall,  or  thereupon  suspends  his 
wares,  does  so  in  order  to  attract  custom,  and 
thereby  increase  the  profit  derived  from  the  use 
of  the  demised  premises.  The  outer  wall  is  there- 
fore to  him  a  source  of  legitimate  profit.  And,  as 
the  lessor  does  not  ordinarily  prescribe  the  uses 
to  which  the  interior  of  the  store  shall  be  devoted 
—provided  only  the  use  be  not  offensive,  improper 
or  illegal — so  he  may  not,  otherwise  than  with  the 
same  proviso,  prescribe  the  uses  to  which  the 
outer  walls  may  be  devoted  by  his  lessee.  If  the 
lessee  deems  it  more  advantageous  to  employ  the 
walls  for  advertising  the  goods  or  the  business  of 
others,  receiving  payment  therefor,  than  to  adver- 
tise or  expose  his  own  goods  upon  the  wall,  it  is 
none  of  the  landlord's  business,  unless  he  has  re- 
stricted and  forbidden  such  use  of  the  premises, 
or  inserted  in  his  lease  a  covenant  against  the  sub- 
letting of  them." 

A  different  question  may  arise  if  the  lessee  rents 
only  a  portion  of  the  entire  premises.  Thus,  in  Booth 
v.  Gaither,,  58  111.  App.,  263  (1895),  a  tenant  who  occu- 
pied a  storeroom  of  a  one-story  building  attempted  to 
interfere  with  the  use  of  the  space  in  front  of  the  build- 
ing above  the  ceilings  for  advertising  purposes,  under 
a  lease  of  such  space  from  the  landlord.  He  was  en- 
joined from  so  doing  on  the  ground  that  the  space  on 
the  front,  above  the  ceilings,  or  at  least  above  the  top 
of  the  ceiling  joists,  remained  in  the  possession  of  the 
landlord,  who  could  grant  the  use  of  the  same  to  an- 
other for  advertising  purposes. 

If  the  lease  contains  a  covenant  by  the  lessee  not  to 
sublet  the  premises  without  the  consent  of  the  landlord, 
another  question  arises.  But  I  am  of  the  opinion  that 
even  if  such  a  provision  is  in  the  lease  the  covenant 
will  not  be  broken  by  the  lessee  in  granting  the  use  of 
the  side  walls  for  advertising  purposes.  That  does 
not  constitute  a  subletting  within  the  conditions  of  the 
lease. 


886 

In  Lowell  v.  Strahan,  145  Mass.,  1  (1877),  two  ac- 
tions were  brought  by  the  lessor  of  a  building  against 
the  lessee ;  one  to  recover  money  which  the  lessee  had 
received  from  a  person  he  had  allowed  to  place  a  sign 
on  the  outer  wall  of  the  part  of  the  building  leased 
to  the  defendant;  and  the  second  action,  for  a  breach 
of  the  covenant  in  the  lease  against  subletting  on  the 
ground  that  the  outer  wall  was  included  in  the  lease, 
and  that  the  act  of  the  lessee  in  allowing  the  placing 
of  the  sign  thereon  by  a  third  person  was  a  subletting 
of  the  wall.  It  was  held  that  this  was  not  a  subletting 
within  the  condition  in  the  lease,  the  court  saying,  at 
page  12: 

"It  is  contended  that  the  agreement  of  the  de- 
fendant to  allow  the  sign  of  a  stranger,  in  consid- 
eration of  an  annual  payment  by  him,  to  remain 
upon  the  outside  wall  demised,  was  a  breach  of  the 
covenant  in  the  lease  not  to  underlet  any  part  of 
the  premises.  But  this  was  a  license,  and  not  a 
lease.  It  wTas  permission  to  do  a  particular  act, 
namely,  to  affix  a  sign  to  the  wall,  and  gave  no  au- 
thority to  do  any  other  act  upon  the  premises. 
The  fact  that  the  permission  was  paid  for,  and 
that  the  act  permitted  was  a  continuing  one,  are 
ordinary  elements  of  a  license.  Every  license  to  do 
an  act  upon  land  involves  the  exclusive  occupa- 
tion of  the  land  by  the  licensee,  so  far  as  is  neces- 
sary to  do  the  act,  and  no  further.  A  lease  gives 
the  right  of  possession  of  the  land,  and  the  ex- 
clusive occupation  of  it  for  all  purposes  not  pro- 
hibited by  its  terms.  It  is  clear  in  this  case  that 
the  intention  was  that  the  licensee  should  have  no 
other  right  in  the  premises  than  to  affix  his  sign 
to  them,  and  that  every  other  right  should  remain 
in  the  defendant.  An  agreement  of  this  nature 
cannot  be  construed  as  a  lease;  it  must  create 
either  a  license  or  an  agreement." 
It  was  further  held  that  if  the  lease  demised  the 
first  floor  of  premises  the  outer  walls  would  be  in- 
cluded; but  if  the  lease  was  of  a  "room"  the  outer 
walls  would  not  be  included. 


887 

Other  cases  are  to  the  same  effect: 

Baldwin  v.  Morgan,  43  Hun.,  355  (N.  Y.). 
Carlisle  Cafe  Co.  v.  Muse,  67  L.  J.  Ch.,  53 
(England). 

In  Willoughby  v.  Lawrence,  116  111.,  11,  where  a  con- 
tract was  entered  into  by  the  lessees  of  a  tract  of  land 
used  for  a  race  course,  giving  the  other  party  thereto 
the  right  to  use  the  fences  and  other  buildings  erected 
on  the  tract  for  advertising  purposes,  it  was  held  that 
the  right  granted  by  the  contract  involved  the  right  of 
entry  upon  the  premises  to  reach  the  buildings  and 
fence,  and  that  such  right  was  a  burden  or  servitude 
in  the  nature  of  an  easement  upon  the  premises  which, 
when  recorded,  would  be  binding  upon  subsequent  pur- 
chasers or  creditors  of  the  lessee.  The  court  did  not 
pass  on  the  question  as  to  whether  this  would  be  a  sub- 
letting prohibited  by  the  lease,  on  the  ground  that 
only  the  lessor  could  raise  the  question. 

In  Levy  v.  Louisville  Gunning  System,  89  S.  W.,  528 
(Ky.,  1905),  it  was  held  that  the  right  granted  by  the 
owner  to  display  a  sign  on  the  walls  of  a  building, 
given  in  writing,  for  a  definite  time  for  a  valuable  con- 
sideration, is  not  revocable  at  the  will  of  the  owner  of 
the  building,  and  that  a  lessee  renting  the  premises 
with  a  knowledge  of  the  prior  right  granted  by  the 
owner  of  the  premises  to  use  the  walls  for  advertising 
purposes  can  properly  be  enjoined  from  interfering 
with  such  use. 

As  a  general  rule,  therefore,  unless  otherwise  cove- 
nanted in  the  lease  of  a  building  or  of  an  entire  floor, 
the  lessee  has  the  right  to  let  the  space  on  the  outside 
walls  of  the  particular  premises  rented  and  controlled 
by  him,  for  advertising  purposes  free  from  any  inter- 
ference by  the  landlord. 


THE    MICHIGAN   LAW   OF    1905,   IMPOSING   A   TAX   UPON    PRI- 
VATE CAE  LINE  COMPANIES. 

(Barrett  Mfg.  Co.,  July  20,  1906). 
"We  have  just  received  from  the  State  Board 
of  Assessors,  Lansing,  Michigan,  annual  report  to 
be  filled  out,  covering  movements  of  our  tank  cars 
in  the  State  of  Michigan  and  the  amount  of  mile- 
age earned,  etc.  We  also  received  a  letter  from 
Orin  T.  Bolt,  Secretary,  under  date  of  June  8th, 
which  reads  as  follows: 

'We  are  sending  you  today  by  express,  blanks 
for  making  the  Public  Acts  of  1905.  Kindly  ac- 
knowledge receipt  of  postal  card  enclosed  here- 
with. Section  No.  6  of  the  above  Act  (a  copy  of 
which  is  enclosed  with  the  blanks)  provides  that 
the  report  must  be  filed  in  this  office  by  August 
31st  and  Section  No.  8  provides  a  penalty  for  neg- 
lect or  refusal  to  file  same. 

I  am  instructed  by  the  board  to  inform  you  that 
the  report  must  be  in  this  office  by  the  time  fixed 
by  law  for  filing  same.' 

Will  you  kindly  advise  us  whether  it  is  necessary 
to  furnish  the  information  referred  to?" 
This  inquiry  involves  the  constitutionality  of  the  Act 
in  question.     If  the  Act  is  unconstitutional  in  an  im- 
portant provision,  so  that  without  such  provisions  the 
purposes  of  the  Act  would  be  rendered  nugatory,  the 
whole  statute  must  fail;  or  if  the  good  and  bad  are 
inseparably  mixed,  the  whole  Act  must  fall.    The  title 
of  the  Act  is  as  follows: 

"No.  282  Pub.  Acts  of  Michigan,  1905. 
An  act  to  provide  for  the  assessment  of  the 
property  of  railroad  companies,  union  station  and 
depot  companies,  sleeping  car  companies,  express 
companies,  car  loaning  companies,  stock  car  com- 
panies, refrigerator  car  companies  and  fast  freight 
line  companies,  and  for  the  levy  of  taxes  thereon 
by  a  State  Board  of  Assessors,  and  for  the  collec- 
tion of  such  taxes,  and  to  repeal  all  acts  or  parts 


889 

of  acts  contravening  any  of  the  provisions  of  this 
act." 

(Sess.  Laws  of  Mich.,  1905,  pp.  439,  et  seq.) 
Sec.  1  provides  that  the  State  Board  of  Tax  Com- 
missioners  shall  constitute  the   State  Board  of  As- 
sessors. 

Sec.  2  provides  for  the  compensation  of  clerks,  etc. 
Sec.  3  gives  the  board  right  of  access  to  public  rec- 
ords, and  provides  inter  alia. 

"It  shall  have  the  right  to  inspect  and  examine 
the  books,  papers  or  accounts  of  any  corporation, 
firm  or  individual,  owning  property  to  be  assessed 
by  said  board,"  etc. 

In  opinions  of  Attorney-General,  8  D.  L.  N.,  587, 
588,  the  Attorney-General  rendered  an  opinion  that  the 
State  Tax  Commissioners  had  the  power  to  examine 
the  books  of  private  banks. 
Sec.  4  provides: 

"It  shall  be  the  duty  of  said  board  to  make  an 
annual  assessment  upon  an  assessment  roll  to  be 
prepared  by  said  board,  of  the  property  having 
a  situs  in  this  state  as  hereinafter  defined,  of  rail- 
road  companies,   union   station   and   depot   com- 
panies, express  companies,  and  sleeping  car  com- 
panies, doing  business  within  this  state,  car  loan- 
ing companies  and  refrigerator  and  fast  freight 
line  companies,  and  all  other  corporations  owning, 
leasing,  running  or  operating  any  freight,  stock, 
refrigerator,  or  any  other  cars,  not  being  exclu- 
sively the  property  of  any  railroad  company  pay- 
ing taxes  upon  its  rolling  stock  under  the  pro- 
visions of  this  act,  over  and  upon  the  line  or  lines 
of  any  railroad  or  railroads  in  this  state." 
This  provision  is  valid,   as  it  is  well  settled  that 
property  may  have  a  situs  distinct  from  the  domicile  of 
the  owner  of  such  property,  and  may  be  taxed  wherever 
it  has  a  situs. 

Tappan  v.  Bank,  19  Wall.,  499. 
State  R.  E.  Tax  Cases,  92  U.  S.,  607. 
American  Refrigerator  &  Transit  Co.  v.  Hall, 
174  U.  S.,  70. 


890 

Sec.  5  provides: 

"The  term  property  as  used  in  this  act  shall  be 
deemed  to  include  all  property,  real  or  personal, 
belonging  to  the  corporation  subject  to  taxation 
under  this  act,  including  the  right  of  way,  road- 
bed, stations,  cars,  rolling  stock,  tracks,  wagons, 
horses,  office  furniture,  telegraph  or  telephone 
poles,  wires,  conduits,  switchboards,  and  all  other 
property  used  in  carrying  on  the  business  of  said 
corporations,  and  owned  by  them  respectively,  and 
all  other  real  and  personal  property  and  fran- 
chises, said  franchises  not  be  directly  as- 
sessed, but  to  be  taken  into  consideration 
in  determining  the  value  of  the  other  prop- 
erty. (Proviso — not  to  handle  certain  real 
estate).  The  term  'property  having  a  situs  in  this 
state,'  shall  include  all  the  property,  real  and  per- 
sonal, of  the  corporations  enumerated  in  this  act, 
owned,  used  and  occupied  by  them  within  the  limits 
of  this  state,  and  also  all  such  proportion  of  the 
rolling  stock,  cars  and  other  property  of  such  cor- 
porations as  is  used  partly  within  and  partly  with- 
out this  state,  as  herein  provided  to  be  deter- 
mined. ' ' 
Section  6  provides : 

"The  several  corporations,  enumerated  in  this 
act,  doing  business  in  this  state,  shall  annually  be- 
tween the  first  day  of  July  and  the  thirty-first  day 
of  August  in  each  year,  under  oath  of  their  presi- 
dent, secretary,  treasurer,  superintendent  or  chief 
officer  of  such  company,  make  and  file  with  the 
State  Board  of  Assessors  in  such  form  as  said 
board  may  provide,  upon  blanks  to  be  furnished 
by  said  board,  a  statement  containing  the  follow- 
ing facts: 

Car  loaning,  stock  car,  refrigerators  and  fast 
freight  line  companies  and  other  car  companies. 

The  blanks  furnished  to  car  loaning,  stock  car, 
refrigerator  and  fast  freight  line  companies,  shall 
provide  for  the  following  information: 

First :    The  corporate  name  of  the  company. 


891 

Second :  The  nature  of  the  business  of  said  com- 
pany, and  under  the  laws  of  what  state  or  country 
organized. 

Third :    The  location  of  its  principal  office. 

Fourth :  The  name  and  postoffice  address  of  the 
president,  secretary,  auditor,  treasurer  and  super- 
intendent or  general  manager. 

Fifth :  The  location  of  its  principal  office  in  the 
State  of  Michigan,  together  with  the  name  and  ad- 
dress of  the  chief  officer  or  managing  agent  of  the 
company  in  Michigan. 

Sixth:  The  total  number  of  cars  and  rolling 
stock  of  any  such  corporation  run  over  or  op- 
erated upon  any  line  or  lines  of  railroad  within 
this  state  each  day  during  the  entire  year  preced- 
ing the  date  of  making  and  filing  such  report. 

Seventh:  The  cost  of  construction  of  each  of 
said  cars: 

Eighth :  The  length  of  time  the  same  has  been 
in  service. 

Ninth:  The  cash  value  of  each  of  said  cars  so 
operated  and  run  in  this  state  at  the  time  of  mak- 
ing and  filing  of  such  report. 

Tenth :  And  such  other  and  additional  informa- 
tion as  may  be  deemed  necessary  by  said  board 
or  any  member  thereof,  to  the  proper  assessment 
of  the  cars  of  such  company  in  this  state  in  accord- 
ance with  the  provisions  of  this  act  and  to  the  per- 
formance of  the  duties  imposed  upon  it  thereby." 
Sec.  7  applies  solely  to  sleeping  car  companies. 
Sec.  8  provides  in  substance: 

"  Blanks  to  be  furnished  on  application,  reports 
so  made  not  to  relieve  company  from  making  re- 
port required  by  other  state  officer.  Board  may 
act  when  company  fails  to  report.  Penalty  of 
$500  per  day  for  neglect  or  refusal  to  file  report 
within  the  time  specified." 
Sec.  9  provides: 

' '  Subsequent  to  the  filing  of  the  reports  required 
in  the  preceding  section,  and  prior  to  the  fifteenth 
day  of  January  in  each  year,  it  shall  be  the  duty 


892 

of  the  State  Board  of  Assessors  to  prepare  an  as- 
sessment roll  as  provided  in  section  four  of  this 
act,  upon  which  they  shall  assess  at  the  true  cash 
value  on  the  thirtieth  day  of  June  of  the  year  in 
which  the  assessment  is  made  all  the  property  of 
the  companies  herein  enumerated,  subject  to  tax- 
ation, under  this  act.  Boards  may  personally  in- 
spect property  and  consider  reports  to  arrive  at 
cash  value. 

In  ascertaining  the  cash  value  of  the  property 
of  car  loaning  (etc.),  companies,  subject  to  taxa- 
tion under  this  act,  they  shall  ascertain  the  aver- 
age number  of  cars  used  in  this  state  during  the 
year  preceding  the  date  of  the  filing  of  the  report 
mentioned  in  the  prevailing  section,  such  average 
to  be  determined  by  dividing  the  total  number  of 
cars  so  used  or  operated  within  this  state  during 
said  year  by  the  total  number  of  days  on  which 
said  cars  were  so  used  or  operated  within  this 
state,  and  they  shall  then  ascertain  the  average 
cash  value  of  such  average  number  of  cars  and 
from  said  data  the  total  valuation  shall  be  de- 
termined and  shall  be  assessed  against  the  prop- 
erty of  said  corporation." 

Sec.  10: 

11  Assessment  roll  to  contain  general  description 
of  property. ' ' 

Sec.  11 : 

"Annual  meeting  of  board  of  reviews  for  assess- 
ment.— May  subpoena  witnesses. — May  place  on 
roll  any  property  omitted,  etc." 

Sec.  12: 

* '  Duty  of  county  clerk,  etc. ' ' 

Sec.  13: 

"Board  of  assessors  to  determine  cash  value  of 
all  property  of  state — 'to  ascertain  and  determine 
the  true  cash  value  of  all  property  of  the  state, 
other  than  that  included  upon  said  assessment 
roll,  upon  which  ad  valorem  taxes  are  a-ssessed  for 
state,  county,  township,  school  and  municipal  pur- 
poses for  the  current  year,  and  shall  enter  the  same 
upon  its  records  forthwith,  and  not  later  than  the 


893 

fifteenth  day  of  January  in  each  year  the  said 
board  of  assessors  shall  ascertain  and  determine 
the  average  rate  of  taxation  levied  upon  such  other 
property  for  the  then  current  year,  by  dividing 
the  aggregate  amount  of  ad  valorem  taxes  levied 
upon  such  other  property  in  the  state  for  such 
purposes,  as  shown  by  the  report  required  by  the 
preceding  section, '  etc.  Proviso  as  to  correction  in 
true  cash  value  and  average  rate  of  taxation." 
This  section  is  almost  an  exact  duplicate  of  Sec.  11, 
Art.  14,  of  the  Constitution  as  amended,  and  is  sus- 
tained in 

Atty.  General  v.  Assessors,  106  N.  W.,  698 

(Mich.). 
Section  14 : 

"Property  of  the  companies  enumerated  in  this 
act  to  be  taxed  at  average  rate  of  taxation  as  com- 
puted in  Sec.  13,  as  assessed — When  tax  roll  to  be 
certified  to — Form  of  certificate — Tax  roll  deliv- 
ered to  auditor  general — When  taxes  payable— 
"The  said  taxes  shall  be  in  lieu  of  all  taxes  for 
state  and  local  purposes,"  not  including  special  as- 
sessment for  particular  benefits,  etc. 
This  section  has  been  declared  constitutional  in  the 
recent  decision  of  the  Supreme  Court  of  Michigan  in 
Atty.  General  v.  State  Board  of  Assessors,  R. 
R.  Cos.  intervenors  (decided  Feb.  26,  1906), 
106  N.  W.,  698. 

The  law  in  question,  as  applied  to  car  companies, 
means  that  such  cars  as  have  a  situs  in  the  state,  al- 
though engaged  in  interstate  commerce,  shall  be  avail- 
able for  taxation. 

In  Vol.  1,  Desty  on  Taxation,  p.  322,  Sec.  67,  it  is 
said: 

' '  The  situs  of  personal  property,  whether  tangi- 
ble or  intangible,  for  the  purposes  of  taxation,  un- 
less otherwise  provided  by  statute,  is  the  place  of 
residence  of  the  owner;  the  only  exception  being 
ivliere  the  property  is  employed  in  business  or  is 
in  the  hands  of  an  agent  of  the  owner  having  an 
actual  situs,  different  from  the  domicile  of  the 
owner/'  etc. 


894 

In  R.  R.  Co.  v.  Pennsylvania,  15  Wall.,  323,  it  is 
said: 

"Actual  situs  of  personal  property,  which  has 
a  visible  and  tangible  existence,  and  not  the  domi- 
cile of  owner,  will  in  man}r  cases  determine  state 
in  which  it  may  be  taxed." 

In  Century  Diet,  and  Encyclopedia,  Vol.  VIT,  page 
5661,  situs  in  law  is  defined  as  "a  situation  in  con- 
templation of  law ;— ' '  locality,  actual  or  recognized  :— 
the  jurisdiction  within  which  the  property  is  located. ' 

The  question  remains  whether  it  is  competent  for  the 
legislature  of  a  state  to  impose  a  tax  upon  property 
which  has  no  permanent  situs  within  the  state  where 
such  property  is  continually  changing  according  to  the 
exigencies  of  a  particular  business.  It  is  now  settled 
by  the  adjudications  of  the  United  States  Supreme 
Court  that  such  a  tax  is  valid.  It  is,  of  course,  beyond 
the  power  of  a  state  to  levy  any  tax  upon  interstate 
commerce,  but  the  state  may  tax  property  having  a 
situs  within  its  borders  even  though  such  property  is 
used  in  interstate  commerce  transactions.  The  tax  is 
not  considered  as  a  tax  upon  the  commerce  itself,  but  as 
a  property  tax.  Anywhere,  as  above  stated,  the  tax 
is  levied  upon  property  which  is  continually  changing 
and  which  is  sometimes  within  the  state  and  sometimes' 
not,  the  tax  may  be  arrived  at  by  estimating  the  aver- 
age amount  of  property  within  the  state  during  a  par- 
ticular period. 

American  Refrigerator  Co.  v.  Hall,  174  U.  S., 

70. 

W.  U.  Tel.  Co.  v.  Massachusetts,  125  U.'S.,  530. 
Pullman  Pal.  Car  Co.  v.  Penn.,  141  U.  S.,  18. 
Adams  Express  Co.  v.  Ohio,  165  U.  S.,  194. 
Marye  v.  B.  &  0.  R.  R.  Co.,  127  U.  S.,  117,  123. 
Gray's  Limitations  in  the  Taxing  Power,  p.  59. 
In  American  Refrigerator  Co.  v.  Hall,  supra,  the 
principal  authorities  are  reviewed.     The  facts  there 
were  as  follows:     The  Eefrigerator  Company  was  a 
corporation  organized  under  the  laws  of  the  State  of 
Illinois.     Its  business  was  the  transportation  of  per- 
ishables in  refrigerator  cars.    At  the  trial  the  parties 
agreed  to  the  following  stipulations  (p.  71) : 


895 

1.  That  the  Refrigerator  Company  was  organized 
under  the  laws  of  the  State  of  Illinois,  with  its  prin- 
cipal office  in  that  state.  That  it  is  engaged  in  the 
business  of  furnishing  refrigerator  cars  for  the  trans- 
portation of  perishables  over  the  various  railroads  of 
the  United  States.  That  it  has  never  had  and  has 
not  any  contract  of  any  kind  whatever  by  which  any 
of  its  cars  were  to  be  leased  or  alloted  to  any  rail- 
road operating  within  the  State  of  Colorado;  "that 
it  has  and  has  had  during  said  times  no  office  or 
place  of  business,  nor  other  property  than  its  cars 
within  the  State  of  Colorado,  and  that  all  the  freight 
transported  in  plaintiff's  cars  in  or  through  the  State 
of  Colorado,  including  the  cars  assessed,  was  trans- 
ported in  such  cars  either  from  a  point  or  points  in  a 
state  of  the  United  States  outside  of  the  State  of 
Colorado  to  a  point  in  the  State  of  Colorado,  or  from 
a  point  in  the  State  of  Colorado  to  a  point  outside  of 
said  state,  or  between  points  wholly  outside  of  the 
State  of  Colorado,  and  said  cars  never  were  run  in 
said  state  in  fixed  numbers  nor  at  regular  times,  nor  as 
a  regular  part  of  particular  trains,  nor  were  any  cer- 
tain cars  ever  in  the  State  of  Colorado,  except  as  en- 
gaged in  such  business  aforesaid,  and  then  only  tran- 
siently present  in  said  state  for  such  purposes." 

The  court  reviewed  the  authorities,  and  said  (p. 
82): 

"It  having  been  settled,  as  we  have  seen,  that 
where  a  corporation  of  one  state  brings  into  an- 
other, to  use  and  employ,  a  portion  of  its  movable 
personal  property,  it  is  legitimate  for  the  latter 
to  impose  on  such  property,  thus  used  and 
employed,  its  fair  share  of  the  burdens  of 
taxation  imposed  upon  similar  property  used 
in  like  way  by  its  own  citizens,  we  think 
that  such  a  tax  may  be  properly  assessed 
and  collected,  in  cases  like  the  present,  where 
the  specific  and  individual  items  or  prop- 
erty so  used  and  employed  were  not  con- 
tinuously the  same,  but  were  constantly  chang- 
ing, according  to  the  exigencies  of  the  business, 


896 

and  that  the  tax  may  be  fixed  by  an  appraise- 
ment and  valuation  of  the  average  amount  of  the 
property  thus  habitually  used  and  employed.  Nor 
would  the  fact  that  such  cars  were  employed  as 
vehicles  of  transportation  in  the  interchange  of 
interstate  commerce  render  their  taxation  invalid. 
Mart/e  v.  Baltimore  &  Ohio  Railroad,  127  U.  S., 
117;  Pullman's  Palace  Car  Co.  v.  Pennsylvania, 
141  U.  S.,  18." 
See,  also, 

State  v.  Union  Tank  Line  Co.,  102  N.  W.,  721 

(Minn.). 

I  am  of  the  opinion  that  the  act  in  question  is  a 
valid  and  constitutional  enactment.  If,  therefore, 
the  Barrett  Mfg.  Co.  come  within  the  terms  of  the 
law  it  should  furnish  the  information  required  by 
Section  6  of  the  act  above  quoted. 

On  July  24,  1901,  I  rendered  an  opinion  to  the  Illi- 
nois Zinc  Company  in  reference  to  a  similar  law 
passed  by  the  legislature  of  Indiana.  I  then  stated 
that  if  the  Zinc  Company  was  not  doing  business  in 
Indiana,  but  merely  shipped  its  own  goods  from  Illi- 
nois to  Indiana,  in  its  own  cars,  and  the  cars  when 
emptied  were  returned  to  the  principal  place  of  busi- 
ness of  the  company  in  Illinois,  and  were  not  used  in 
any  other  way,  and  the  Zinc  Company  did  no  other 
business  of  any  kind  in  Indiana,  that  in  such  a  case 
the  situs  of  the  cars  was  in  Illinois  and  not  in  Indiana, 
and  therefore  the  Zinc  Company  did  not  come  within 
the  purview  of  the  act  in  question. 

If  the  methods  of  doing  business  pursued  by  the  Bar- 
rett Mfg.  Co.  in  Michigan  are  similar  to  those  then 
pursued  by  the  Zinc  Company  in  Indiana,  I  am  of 
the  opinion  that  the  Michigan  law  need  not  be  com- 
plied with,  but  if,  as  above  stated,  the  Barrett  Mfg. 
Co.  are  within  the  terms  of  the  law,  it  should  be  com- 
plied with. 


897 


SERVICE  OF  NOTICE  OF  DEMAND  IN  GARNISHMENT  AND  FOR 
WHAT  PERIOD  OF  TIME  THE  EMPLOYER  MUST  HOLD  THE 
WAGES  DUE  EMPLOYEES  AFTER  SERVICE  OF  NOTICE  OF  DE- 
MAND IN  GARNISHMENT. 

(Borden's  Condensed  Milk  Company,  July  30,  1906.) 

"We  beg  to  ask  your  opinion  on  the  following 
points  connected  with  the  following  points  con- 
nected with  a  demand  of  garnishment  notice : 

1st.  Does  the  law  require  that  the  written  de- 
mand be  served  personally  on  the  employer? 

2nd.  Does  the  written  demand  hold  valid  when 
sent  through  the  mails  to  employer? 

3rd.  Is  employer,  after  the  expiration  of  five 
days  from  date  of  service  of  notice,  released  from 
any  liability  by  paying  money  to  wage  earner,  pro- 
vided no  additional  notices  were  served  in  the 
meantime  ? 

4th.  If  a  demand  notice  sent  by  mail  be  valid, 
what  time  is  considered  the  time  of  service;  the 
date  of  notice  or  the  time  the  notice  was  received 
by  employer? 

We  inquire  for  your  opinion  on  these  matters 
that  we  may  know  where  our  liability  begins  and 
ceases  in  the  matter  of  these  demands  in  garnish- 
ment notices,  in  order  to  protect  our  rights  and 
those  of  our  employes  against  a  possible  misuse 
of  same." 

Section  14  of  the  Act  of  March  9,  1872,  as  amended, 
provides  (Hurd's  Rev.  Stat.,  Chap.  62,  Sec.  14) : 

"Before  bringing  suit  a  demand  in  writing 
shall  first  be  made  upon  the  wage  earner  and  the 
employer  for  the  excess  above  the  amount  herein 
exempted,  and  a  copy  of  such  demand  shall  be 
left  with  him  and  with  the  emplo}rer,  having  en- 
dorsed thereon  the  time  of  service,  at  least  twenty- 
four  hours  previous  to  bringing  such  suit.  Such 
notice  shall  be  filed  with  the  justice,  or  clerk  of 
the  court,  with  the  manner  and  time  of  the  service 
of  the  same  endorsed  thereon,  and  the  return  duly 
sworn  to  before  some  officer  authorized  to  adminis- 


898 

ter  oaths  before  it  shall  be  lawful  to  issue  a  sum- 
mons in  such  case,  or  to  require  an  employer  to 
answer  in  any  garnishee  proceedings.    Any  judg- 
ment rendered  without  said  demand  being  served 
upon  the  wage  earner,  and  so  proven  and  filed  as 
aforesaid  shall  be  void.  The  excess  of  wages  shall 
be  held  by  the  employer,  subject  to  garnishment  by 
the  creditor   serving  demand,  for  five    (5)    days 
after  such  service  of  demand." 
I  am  of  the  opinion  that  the  act  above  quoted  con- 
templates that  the  demand  upon  the  employer  shall  be 
made  by  personally  leaving  a  copy  of  the  same  at  the 
place  of  business  of  the  employer.   The  phrase,  "shall 
be  left  with  him,"  is  equivalent  to  the  phrase  "deliv- 
ered to,"  and  this  implies  personal  service  of  the  em- 
ployer and  not  service  by  mail.    This  view  is  strength- 
ened by  the  further  provisions  that  "a  copy  of  such 
demand  shall  be  left  with  the  employer,  having  en- 
dorsed thereon  the  time  of  service/'  and  that 

' l  Such  notice  shall  be  filed  with  the  justice  with 
the  manner  and  time  of  the  service  endorsed  there- 
on." 

Service  of  notice,  therefore,  by  mailing  the  same 
would,  in  my  opinion,  be  insufficient. 
See: 

Buck  v.  Buck,  60  111.,  105. 
Adams  v.  Wright,  14  Wis.,  442. 
Westfall  v.  Farwell,  13  Wis.,  504. 
Wilson  v.  Railway  Co.,  108  Mo.,  588. 
The  employer  is  required  to  hold  the  wages  of  the 
employe  for  five  days  after  the  service  of  the  demand 
as  above  indicated,  and  at  the  expiration  of  such  five 
days   (if  he  has  not  been  served  with  summons)   he 
may  safely  pay  over  the  moneys  withheld  unless  a 
new  notice  is  received  during  the  five  days. 


899 


WHETHER  A  NOTE  SIGNED  BY  A  WOMAN  AS  ACCOMMODATION 
SURETY  FOR  HER  HUSBAND  IN  KENTUCKY  AND  PAYABLE 
IN  ILLINOIS  IS  ENFORCEABLE  AGAINST  THE  MARRIED 
WOMAN  WHEN  THE  KENTUCKY  STATUTES  ANNUL  THE 
WIFE'S  LIABILITY  AS  SURETY  ON  HER  HUSBAND'S  PAPER. 


(Hibbard,  Spencer,  Bartlett  &  Co.,  August  1,  1906.) 

' '  A  customer  of  ours  located  in  the  State  of  Ken- 
tucky, gave  to  us  in  settlement  of  his  account  a 
note  signed  by  himself  and  his  wife.  The  note 
read:  'We  promise  to  pay  to  Hibbard,  Spencer, 
Bartlett  &  Co.  at  their  office  in  Chicago.'  The 
note  was  signed  and  delivered  to  our  agent  in  Ken- 
tucky, but  you  will  notice  that  it  is  payable  in  Chi- 
cago. We  understand  that  there  is  a  statutory  en- 
actment in  Kentucky  which  annuls  a  wife's  signa- 
ture as  a  surety  on  her  husband's  paper.  Assum- 
ing that  the  note  to  us  was  signed  for  the  hus- 
band's debt,  and  that  the  wife  signed  it  only  as  an 
accommodation  to  her  husband,  could  she  take  ad- 
vantage of  this  Kentucky  statute  to  escape  liability 
on  the  note1? 

The  note  was  executed  in  Kentucky,  but  pay- 
ment is  to  be  made  in  Illinois.  If  we  bring  suit  in 
Kentucky  would  the  wife's  liability  be  determined 
by  the  law  of  Kentucky  or  the  law  of  Illinois? 

If  she  could  under  this  statute  prevent  us  from 
recovering  a  judgment  against  her  could  she  plead 
the  same  defense  as  against  one  who  has  purchased 
the  note  from  us  before  maturity  for  value  and 
without  notice  that  the  wife  signed  the  paper  as 
an  accommodation!" 

The  Kentucky  statute  provides  (Carroll's  Ky.  Com- 
piled Stat.,  1903,  Chap.  66,  Sec.  2127) : 

"No  part  of  a  married  woman's  estate  shall  be 
subjected  to  the  payment  or  satisfaction  of  any 
liability  upon  a  contract  made  after  marriage,  to 
answer  for  the  debt,  default  or  misdoing  of  an- 
other, including  her  husband,  unless  such  estate 
shall  have  been  set  apart  for  that  purpose  by 
deed  of  mortgage  or  other  conveyance." 


900 

(Chap.  27,  Sec.  474): 

"All  bonds,  bills  or  notes  for  money  or  prop- 
erty shall  be  assignable  so  as  to  vest  the  right  of 
action  in  the  assignee;  but  except  in  case  of  bills 
of  exchange  not  to  impair  the  right  to  any  defense, 
discount  or  offset  that  the  defendant  has  and 
might  have  used  against  the  original  obligee,  or 
any  intermediate  assignor,  before  notice  of  the 
assignment. ' ' 

Under  this  statute,  the  Kentucky  courts  hold  a  wife 
cannot  be  held  for  any  liabilities  assumed  as  surety  for 
her  husband. 

Deposit  Bank  of  Carlisle  v.  Stitt,  107  Ky.,  9; 

52  S.  W.,  950  (1899). 
Russell  v.  Rice,  44  S.  W.,  110  (Ky.). 
Crumbaugh  v.  Postell,  49  S.  W.,  334  (Ky.). 
The  law  applicable  to  promissory  notes  executed  in 
one  state  and  payable  in  another,  and  having  conflicting 
laws,  may  be  summed  up  as  follows : 

(1)  All  matters  bearing  upon  the  executing,  the 
interpretation  and  validity  of  the  note,  including  the 
capacity  of  the  parties  to  contract,  are  to  be  deter- 
mined by  the  law  of  the  place  where  the  contract  is 
made.  (2)  All  matters  connected  with  the  payment, 
including  presentation,  notice,  demand,  protest  and 
damages  for  non-payment,  are  to  be  regulated  by  the 
law  of  the  place  where  by  its  terms  the  note  is  to  be 
paid.  (3)  All  matters  respecting  the  remedy  to  be 
pursued,  including  the  bringing  of  suits,  service  of 
process  and  admissibility  of  evidence,  depend  upon 
the  law  of  the  place  where  the  action  is  brought.  (4) 
A  contract  must  be  construed  and  its  validity  deter- 
mined under  the  law  of  the  state  where  it  is  executed, 
unless  it  can  be  fairly  said  that  the  parties  at  the 
time  of  its  execution  clearly  manifested  an  intention 
that  it  should  be  governed  by  the  laws  of  another  state. 
(5)  If  a  contract  is  valid  in  the  state  where  it  is  exe- 
cuted, it  is  valid  anywhere. 

Garrigue  v.  Keller,  74  N.  E.,  523  (Ind.,  1905). 
In  Scudder  v.  Union  National  Bank,  91  U.  S.,  406, 
the  court  says  (p.  412) : 

"Thus  whether  a  contract  shall  be  in  writing,  or 


901 

may  be  made  by  parol,  is  a  formality  to  be  deter- 
mined by  the  law  of  the  place  where  made.  Mat- 
ters bearing  upon  the  execution,  the  interpretation 
and  the  validity  of  a  contract  are  determined  by 
the  law  of  the  place  where  the  contract  is  made 
(First  rule). 

A  careful  examination  of  the  well  considered 
decisions  of  this  country  and  of  England  will  sus- 
tain these  positions." 

In  Wharton  on  Conflict  of  Laws  (Edition  of  1905), 
page  907,  it  is  said : 

"As  between  the  law  of  the  place  where  the 
contract  is  made  and  that  of  the  place  where  it  is 
performable,  the  weight  of  authority  favors  the 
former.  Campbell  v.  Grampian,  2  Fed.,  417.  In 
other  words,  this  matter  comes  within  the  first 
rule  of  the  Scudder  case,  which  for  this  purpose 
may  be  treated  as  an  absolute  rule,  not  dependent 
upon  the  intention  of  the  parties. ' ' 
In  Stacy  v.  Baker,  2  111.,  417,  it  is  said : 

"No  principle  is  better  settled  than  that  of  the 
law  of  the  country  where  the  contract  is  made  shall 
govern  its  construction  and  determine  its  valid- 
ity." 

In  Union  National  Bank  v.  Chapman,  169  N.  Y.,  538, 
57  L.  B.  A.,  513,  the  question  is  squarely  passed  upon. 
There  a  note  was  executed  by  a  married  woman  in  Ala- 
bama as  accommodation  surety  for  her  husband.  The 
note  was  on  its  face  payable  in  Chicago,  and  was  dis- 
counted there.  By  the  laws  of  Alabama  this  note  was 
void  as  to  the  wife,  but  valid  under  the  laws  of  Illi- 
nois. The  court  held  that  the  note  as  to  the  capacity 
of  the  parties  was  governed  by  the  law  of  Alabama, 
and  hence  void  as  to  the  wife.  Under  the  decisions  re- 
ferred to  the  note  is  invalid  as  to  the  wife. 

Inasmuch  as  the  note  in  question  is  void  as  to  the 
wife,  the  same  rule  would  apply  where  the  note  is  trans- 
ferred to  a  holder  for  value,  without  notice  that  the 
wife 's  indorsement  was  as  accommodation  for  her  hus- 
band. I  am  of  the  opinion  that  under  the  facts  above 
stated  no  recovery  can  be  had  against  the  wife.  Of 
course,  where  the  parties  contract  that  the  laws  of  a 


902 

particular  state  shall  control  the  interpretation  of  their 
contract,  such  agreement  will  control,  but  the  mere  fact 
that  a  note  is  made  payable  in  another  state,  is  not  suf- 
ficient evidence  to  show  that  the  parties  have  agreed 
to  be  bound  by  the  laws  of  the  state  where  such  note 
is  made  payable. 

Wm.  Glenny  Glass  Co.  v.  Taylor,  99  Kv.,  24; 
34  S.  D.,  711. 

SUPPLEMENTARY. 

(Hibbard,  Spencer,  Bartlett  &  Co.,  November  7,  1906.) 
"Yours  of  the  2nd  inst.,  enclosing  the  opinion 
of  Mr.  Levy  Mayer,  dated  August  1st.,  relating  to 
the  legality  of  a  Kentucky  married  woman 's  signa- 
ture to  her  husband's  note  received.      Will  you 
kindly  call  Mr.  Mayer's  attention  to  the  case  of 
Stevens  v.  Gregg  et  al.,  reported  in  the  12  S.  W. 
Rep.,  775  and  89  Ky.  Rep.,  461,  and  ask  him  if  this 
decision,  which  is  a  Kentucky  case,  might  not  pos- 
sibly change  his  opinion.   Please  refer  him  also  to 
Goddin  v.  Shipley,  1  B.  Mon.  (Ky.),  577." 
In  the  opinion  of  August  1st  referred  to,  I  stated 
where  a  married  woman  signed  a  note  as  accommoda- 
tion surety  for  her  husband,  in  violation  of  the  Ken- 
tucky statutes,  that  no  recovery  could  be  had  thereon 
against  the  wife,  even  though  the  note  was  made  pay- 
able in  Illinois,  where  such  a  contract  would  be  valid, 
—in  other  words,  that  the  mere  fact  that  such  note  was 
made  payable  in  Illinois  was  not  sufficient  evidence  to 
show  that  the  parties  had  agreed  to  be  bound  by  the 
laws  of  Illinois.       I  am  now  asked  to  reconsider  the 
opinion  in  question  on  account  of  the  decisions  of  the 
Kentucky  courts  in  Stevens  v.  Gregg,  12  S.  W.,  775,  89 
Ky.,  461,  and  Goddin  v.  Shipley,  1  B.  Mon.  (Ky.),  577. 
I  reply  thus : 

It  must  be  borne  in  mind  under  the  statutes  of  Ken- 
tucky referred  to  in  the  prior  opinion  that  where  a 
married  woman  signs  a  contract  as  surety  for  her  hus- 
band the  contract  of  such  married  woman  is  absolutely 
void,  unless  she  binds  herself  in  the  statutory  mode, 


903 

and  no  recovery  can  be  had  thereon.     In  addition  to 
the  authorities  referred  to  in  the  prior  opinion,  see : 

Planters'  Bank  v.  Major,  76  S.  W.,  331;  80 
S.W.,  1089  (Ky.). 

Skinner  v.  Lynn,  51  S.  W.,  167  (Ky.). 

Chever  v.  Glover,  4  Ky.  L.  R.,  360. 

Magoffin  v.  Boyle  Nat.  Bank,  69  S.  W.,  702 

(Ky.). 

The  case  of  Union  National  Bank  v.  Chapman,  169 
N.  Y.,  538,  57  L.  E.  A.,  513,  referred  to  in  my  prior 
opinion,  squarely  holds  that  a  note  of  the  character  of 
the  one  under  discussion  is  governed  by  the  law  of 
the  place  where  it  is  made,  and  that  the  fact  that  such 
note  is  made  payable  in  another  state  is  not  sufficient 
evidence  that  the  parties  agreed  to  be  bound  by  the 
laws  of  that  state.  Many  other  cases  might  be  cited  to 
the  same  effect,  among  them  being: 

Stansell  v.  Georgia,  etc.,  Co.,  22  S.  E.,  898 

(Ga.). 
Jackson  v.  American,  etc.,  Co.,  15  S.  E.,  812 

(Ga.). 

Joslin  v.  Miller,  15  N.  W.,  214  (Neb.). 
Olmstead  v.  New  England  Co.,  9  N.  W.,  650 

(Neb.). 

As  reference,  however,  has  been  made  to  some  Ken- 
tucky decisions,  I  will  refer  briefly  to  all  of  the  Ken- 
tucky cases. 

In  Win.  Glenny  Glass  Co.  v.  Taylor,  99  Ky.,  24,  34 
S.  "W.,  711,  the  glass  company  instituted  a  suit  against 
two  makers  of  a  note.  The  note  was  dated  at  Washing- 
ton, D.  C.,  and  was  payable  at  a  New  York  bank,  and 
provided  for  interest  at  the  rate  of  8  per  cent.  The 
note  was  executed  and  delivered  by  one  of  the  makers 
at  Washington,  D.  C.,  and  was  thereupon  mailed  by  the 
other  payee  to  the  other  maker  in  Kentucky,  when  it 
was  signed  and  forwarded  to  the  payee  in  New  York 
for  the  purpose  of  being  negotiated.  It  was  contended 
as  by  the  laws  of  New  York  the  rate  of  interest  was 
usurious  that  no  recovery  could  be  had. 
The  court  said: 

' '  The  mere  fact  that  the  note  was  made  payable 
in  New  York  and  received  by  the  payee  in  that 


904 

city,  under  the  circumstances  of  this  case,  is  not 
sufficient  evidence  of  the  fact  that  it  was  intended 
the  law  of  that  state  should  govern,  or  its  validity 
to  be  tested  by  the  statute  in  regard  to  usury." 
And  again: 

''It  is  a  question  of  intention,  and  all  the  facts 
must  jbe  considered  in  order  to  determine  what  law 
the  parties  looked  to  as  controlling  their  rights 
under  the  contract,  whether  the  law  of  the  place 
where  the  contract  was  entered  into  or  the  law  of 
the  place  where  it  was  to  be  performed ;  nor  is 
the  rule  here  recognized  in  conflict  with  the  cases 
heretofore  decided  by  this  court  in  Goddin  v.  Ship- 
ley, 7  B.  Mon.,  575 ;  Hyatt  v.  Bank  of  Kentucky,  8 
Bush.,  193 ;  Young  v.  Harris,  14  B.  Mon.,  447." 
In  Rogers  v.  Raines  (Ky.,  1896),  38  S.  W.,  483,  the 
plaintiff  was  the  receiver  of  a  building  and  loan  asso- 
ciation, a  Tennessee  corporation.    The  defendant  pro- 
cured a  loan  from  the  association  and  gave  his  note 
therefor,  secured  by  a  mortgage.    Suit  was  brought  on 
the   note  in  Kentucky.      The   note   was   executed  in 
Kentucky   and   made   payable   in   Tennesee,    and   the 
note  and  mortgage  were  there  delivered  and  accepted. 
The  laws  of  Tennessee  allowed  the  collection  of  an  at- 
torney's fee  when  contracted  for.     The  note  in  ques- 
tion provided  for  an  attorney's  fee.     The  court  said: 
"The  appeal,  therefore,  presents  but  two  ques- 
tions for  decision:    First,  whether  the   contract 
for  attorney's  fees,  which  was  valid  according  to 
the  laws  of  the  state  where  the  contract  was  by  its 
terms  to  be  performed,  is  enforceable  in  this  state. 
This  question  has  been  recently  decided  by  this 
court  in  the  negative.    It  was  held  in  the  case  of 
Clark  v.  Tanner  (decided  December  9,  1896),  38 
S.  W.,  11,  that  the  general  rule  of  comity  giving 
effect  to  contracts  beyond  the  limits  of  the  state 
where  made  does  not  embrace  contracts  like  the 
one  in  question.    Such  contracts  come  within  rec- 
ognized exceptions  to  the  general  doctrine.    Those 
exceptions,  as  said  by  Justice  Martin  in  Whiston 
v.  Stodder,  8  Mart.   (La.),  95,  apply  to  cases  in 
which  the  contract  is  immoral,  or  unjust,  or  in 


905 

which  the  enforcing  of  it  in  a  state  would  be  in- 
jurious to  the  rights,  the  interest,  or  convenience 
of  such  state  or  its  citizens.  As  is  said  by  this 
court  in  Witlierspoon  v.  Musselman,  14  Bush,  214, 
of  such  contracts  for  the  payment  of  attorney's 
fees.  'They  are  agreements  to  pay  penalties, 
tend  to  oppression  of  the  debtor,  and  to  encour- 
age litigation.'  There  was,  therefore,  no  error  by 
the  lower  court  upon  this  point." 
See  also  to  the  same  effect  Clark  v.  Tanner  (Ky. 
1896),  38  S.  W.,  11. 

In  Ford  v.  Buckeye  State  Insurance  Co.,  69  Ky., 
133  (1869),  a  contract  of  insurance  was  executed  in 
Indiana  by  an  agent  of  the  company  which  had  not  com- 
plied with  the  laws  in  relation  to  foreign  insurance 
corporations.  The  law  provided  that  such  contracts 
could  not  be  enforced  in  the  courts  of  that  state.  Suit 
was  brought  in  Kentucky  by  the  insurance  company  to 
recover  on  certain  premium  notes.  The  court  held  that 
as  the  contract  was  illegal  and  void,  under  the  laws  of 
Indiana,  it  could  not  be  enforced  in  any  other  state, 
unless  it  was  to  be  performed  in  another  state,  where 
the  contract  would  be  legal. 

In  United  States  Saving  &  Loan  Assn.  v.  Scott  (Ky. 
1896),  34  S.  W.,  235,  a  resident  of  Kentucky  became  a 
member  of  a  Minnesota  loan  association  doing  busi- 
ness in  Kentucky  and  procured  from  it  a  loan  at  a 
rate  of  interest  usurious  in  Kentucky,  but  legal  in 
Minnesota.  The  note  specifically  provided  that  it  was 
made  with  reference  to  the  laws  of  Minnesota.  It  was 
held  that  the  transaction  was  an  evasion  of  the  Ken- 
tucky law  and  that  the  usurious  interest  could  be  re- 
covered back. 
See  also: 

Wharton's  Conflict  of  Laws,  Chap  8,  pp.  904, 

908  (3d  ed.,  Parmele). 
Andrews  v.  Pond,  13  Pet.,  65. 
Eager  v.  The  Bank,  105,  Ga.,  241,  31  S.  E., 

141. 
First  Nat.  Bank  v.  Shaw  (Tenn.)  59  L.  E.  A., 

498. 
Garrigue  v.  Keller,  69.  L.  B.  A.  870  (Ind.). 


906 

I  have  been  referred  to  the  cases  of  Stevens  v.  Gregg, 
89  Ky.,  461,  12  S.  W.,  775,  and  Goddin  v.  Shipley,  7%B. 
Mon.,  577,  as  holding  a  contra  doctrine. 

In  Stevens  v.  Gregg,  Stevens  exe'cuted  a  promissory 
note  in  Kentucky,  payable  at  a  bank  at  Cincinnati, 
Ohio.  The  note  was  indorsed  and  delivered  to  appel- 
lees in  Ohio  before  maturity  for  a  valuable  considera- 
tion. The  defendant  pleaded  a  set  off  against  the 
original  payee,  and  the  question  arose  as  to  whether 
under  the  Ohio  statutes  a  promissory  note  stood  upon 
the  footing  of  a  bill  of  exchange,  and  therefore  was 
not  subject  to  set  off  while  in  the  hands  of  an  innocent 
holder.  The  court  said: 

''First  does  the  fact  that  said  note  was  made 
payable  in  the  State  of  Ohio  impress  it  with  the 
character  of  similar  paper  executed  and  made 
payable  in  said  state?  The  authorities,  the  deci- 
sions of  this  court  included,  all  agree  that  it  does. 
In  Goddin  v.  Shipley,  7  B.  Mon.,  577,  it  is  said : 
'The  general  principle  that  a  contract  referring, 
by  express  terms,  to  a  particular  place  where  it 
is  to  be  performed,  is  to  receive  its  construction 
and  legal  character  and  effect  from  the  laws  of 
the  place  thus  referred  to,  is  itself  so  obviously 
reasonable,  and,  on  the  score  of  authority,  so  well 
established,  as  to  preclude  all  discussion  of  its 
correctness." 

In  Goddin  v.  Shipley,  7  B.  Mon.,  575  (Ky.  1847), 
Shipley  sued  Goddin  on  a  promissory  note.  The  note 
was  dated  at  St.  Louis,  Mo.,  and  was  payable  at  an 
office  in  St.  Louis.  The  plaintiff  relied  on  a  Missouri 
statute  which  enacted  that  all  notes  of  the  character 
of  the  note  in  question  should  be  on  the  footing  of  an 
inland  bill  of  exchange.  The  defendant  proved  that 
the  note  was  in  fact  executed  and  indorsed  in  Ken- 
tucky, but  the  court  instructed  the  jury  that  the  laws 
of  Missouri  governed.  The  court  said : 

"The  general  principle  that  a  contract,  refer- 
ring, by  its  own  terms  to  a  particular  place  where 
it  is  to  be  performed,  is  to  receive  its  construction 
and  legal  character  and  effect  from  the  laws  of 


907 

the  place  thus  referred  to,  is  in  itself  so  obviously 
reasonable,  and  on  the  score  of  authority,  so  well 
established  as  to  preclude  all  discussion  of  its 
correctness.  Nor  is  there  any  room  for  question- 
ing that  the  note  in  this  case  comes  fully  up  to  the 
description  of  the  notes  to  which  the  6th  section 
of  the  statutes  of  Missouri  relates.  Indeed,  sup- 
posing St.  Louis,  in  Missouri,  to  be  the  place  re- 
ferred to,  it  might  be  assumed  that  the  terms  of  the 
note  were  adopted  with  the  express  view  of  bring- 
ing it  fully  up  to  the  requisition  of  that  section, 
and  to  the  very  end  that  it  might  receive  its  char- 
acter and  operation  from  that  statute.  It  is  then 
not  only  in  virtue  of  the  general  principle  above 
stated,  but  by  the  direct  intention  of  the  parties 
that  this  note,  wherever  executed,  should  be  re- 
garded, as  in  character  and  effect,  an  inland  bill, 
if  it  referred  to  St.  Louis  in  Missouri;  and  if  it 
was  in  truth,  made  in  Kentucky,  the  circumstances 
that  it  was  nevertheless,  dated  'St.  Louis'  proves 
the  more  certainly  the  intention  that  it  should  take 
its  character  and  effect  from  the  laws  of  Mis- 
souri. ' ' 

The  court  also  points  out  that  there  was  no  evidence 
that  the  note  was  actually  negotiated,  sold  or  trans- 
ferred in  Kentucky. 

Goddin  v.  Shipley  (decided  in  1847),  is  referred  to 
in  Wm.  Glenny  Glass  Co.  v.  Taylor,  99  Ky.,  24,  supra 
(decided  in  1896),  where  it  was  squarely  held  that  the 
mere  fact  that  a  note  was  made  payable  in  a  particular 
state,  did  not  evidence  a  sufficient  intention  that  the 
contract  should  be  governed  by  the  laws  of  that  state. 
And  in  the  Glenny  Glass  Co.  case  the  court  referring 
to  Goddin  v.  Shipley,  said : 

"Nor  is  the  rule  here  recognized  in  conflict  with 
the  cases  heretofore  decided,  by  this  court  in  God- 
din  v.  Shipley,  7  B.  M.,  575,"  etc. 
In  the  cases  of  Goddin  v.  Shipley  and  Stevens  v. 
Gregg,  referred  to  as  holding  a  contrary  doctrine — the 
intention  of  the  parties  that  the  law  of  the  place  of  per- 
formance   should  govern  the  contract  was  clearly  ap- 
parent. 


908 

In  Stevens  v.  Gregg,  the  note  was  not  only  payable 
in  Ohio,  but  it  was  indorsed  and  delivered  in  Ohio. 
In  Goddin  v.  Shipley,  the  note  was  dated  at  St.  Louis 
and  was  payable  in  St.  Louis,  and  there  was  no  evi- 
dence that  the  note  was  actually  negotiated  or  trans- 
ferred in  Kentucky.  In  the  present  case  the  only  evi- 
dence of  an  intention  to  be  bound  by  the  Jaws  of  Illi- 
nois was  the  fact  that  the  note  was  made  payable 
there,  and  under  the  authorities  above  referred  to  this 
is  not  sufficient.  Again,  in  the  only  two  cases  cited, 
and  to  which  my  attention  is  invited  by  Messrs.  Hib- 
bard,  Spencer,  Bartlett  &  Co.,  neither  the  validity  or 
legality  of  the  contract,  nor  the  capacity  of  the  parties 
was  involved.  The  only  question  was  as  to  the  negotia- 
bility of  the  note  under  the  laws  of  the  state  where  it 
was  payable.  Those  two  cases  are  in  no  way  in  con- 
flict with  my  prior,  nor  with  this  opinion,  but  if  they 
were  the  much  later  and  subsequent  cases  like  the 
Glenny  Glass  Co.  case  decided  in  1896,  would  control. 
In  the  present  case,  the  note  is  by  the  statute  of  Ken- 
tucky made  absolutely  void,  and  in  the  absence  of  evi- 
dence that  the  parties  clearly  intended  that  the  laws  of 
the  state,  where  the  note  is  made  payable,  should  con- 
trol, I  am  convinced  that  no  recovery  could  be  had  in 
the  present  case,  and  I  therefore  reaffirm  my  prior 
opinion  of  August  1st.  This  conclusion  is  uniformly 
supported  by  the  leading  text  writers. 

Wharton  Conflict  Laws,  907,  et  seq. 

Daniels  Negotiable  Instruments,  867. 


909 


THE  EIGHT  OF  STOPPAGE  IN  TRANSITU  WHERE  THE  VENDOR 
TAKES  OUT  A  BILL  OF  LADING  IN  THE  NAME  OF  HIS  VEN- 
DEE AS  CONSIGNOR,  AND  IN  THE  NAME  OF  THE  PURCHASER 
FROM  THE  VENDEE  AS  CONSIGNEE;  AND  AS  TO  THE  EF- 
FECT OF  BANKRUPTCY  OF  THE  VENDEE  UPON  PAYMENT 
FOR  THE  GOODS. 

(Pilcher-Hamilton  Company,  August  1.  1906.) 

"So  frequently  are  manufacturers  requested  to 
take  bills  of  lading  in  the  names  of  their  customers, 
as  shippers,  we  believe  many  members  of  the  as- 
sociation would  be  interested  and  we  would  like 
to  have  you  submit  to  Mr.  Levy  Mayer,  general 
counsel,  for  his  opinion  the  following  questions: 

STATEMENT    OF    FACTS. 

"A  sends  an  order  for  a  cardload  of  paper  to  B 
and  requests  B  to  ship  it  to  C  at  St.  Louis,  Mo., 
taking  the  bill  of  lading  in  the  name  of  A,  the 
shipper.  Before  delivery  of  the  car  to  C  at  St. 
Louis  a  petition  in  bankruptcy  is  filed  against  A. 

Question  I : 

Does  the  taking  of  the  bill  of  lading  in  the  name 
of  A  constitute  a  delivery  to  A  at  the  point  of 
shipment  so  as  to  deprive  B  of  his  right  of  lien 
under  the  doctrine  of  stoppage  in  transit? 

Question  II : 

If  the  bill  of  lading  was  issued  after  the  peti- 
tion in  bankruptcy  was  filed  who  would  be  en- 
titled to  the  pay  for  the  car  from  C,  the  receiver 
in  bankruptcy,  A.  or  B  ? 

Question  III: 

If  the  bill  of  lading  was  issued  before  the  peti- 
tion was  filed  who  would  be  entitled  to  pay  from  C, 
the  receiver  of  the  bankrupt,  or  B ! 

Question  IV: 

In  a  case  similar  to  the  one  described  in  the 

foregoing  statement  of  facts,  what  course  should 

B  pursue  to  best  protect  his  interests." 

The  right  of  stoppage  in  transitu  arises  only  in  favor 

of  one  who  stands  in  the  relation  of  vendor  to  the 


910 

goods,  upon  the  insolvency  of  the  buyer.  The  right 
may  be  exercised  by  the  vendor  or  one  who  stands  in 
that  relation,  and  continues  while  the  goods  are  in 
transit  until  there  is  actual  delivery  of  the  goods  to  the 
buyer,  or  upon  his  order,  or  to  a  bona  fide  purchaser 
holding  a  bill  of  lading  duly  indorsed  by  the  buyer. 

Delta  Bag  Co.  v.  Reams,  112  111.  App..  269 

(1904). 

Branan  v.  Atlantic,  etc.,  R.  Co.,  33  S.  E.,  836 
(Ga.,  1899). 

The  right  of  stoppage  in  this  instance  will  depend 
upon  whether  B.,  by  taking  the  bill  of  lading  in  the 
name  of  A  as  shipper,  and  C  as  consignee,  has  so  far 
delivered  the  goods  to  A  and  parted  with  his  lien  as 
to  divest  himself  of  the  right  to  stop  the  goods  in  tran- 
sit upon  the  insolvency  of  A. 

In  Rowley  v.  Bigelow,  12  Pick.,  307  (Mass.,  1832), 
where  there  was  a  delivery  of  corn  by  the  vendor  on 
board  a  vessel  appointed  by  the  vendee  to  receive  it, 
not  for  the  purpose  of  transportation  to  him,  or  to  a 
place  appointed  by  him  to  be  delivered  there  for  his 
use,  but  to  be  shipped  by  such  vessel,  in  the  vendee's 
name,  to  a  third  person,  it  was  held  that  this  was  a 
termination  of  the  transit,  and  that  the  right  of  the 
vendor  to  stop  in  transitu  wTas  at  an  end. 

In  Treadwell  v.  Aydlett,  65  Tenn.,  388  (1872),  D. 
purchased  goods  of  G  and  directed  them  to  be  shipped 
in  his  name,  as  consignor  to  A;  D  failed  and  G  at- 
tempted to  exercise  the  right  to  stop  the  goods  in 
transit.  It  was  insisted  by  G  that  he  was  entitled  as 
against  D,  the  insolvent  purchaser,  to  stop  the  goods 
before  they  reached  the  actual  possession  of  A,  to 
whom  they  were  consigned  by  IX  It  appeared  that  G 
had  nothing  to  do  with  A,  and  did  not  look  to  them 
for  payment,  but  D  alone  was  looked  to  for  payment. 
The  court  held  that  G  had  lost  his  right  of  stoppage 
in  transitu,  sayiilg : 

"If  the  goods  had  been  carried  from  the  house 
of  Galbreath  £  Putnam  to  that  of  Dobbins,  Pleas- 
ants  &  Co.,  and  there  delivered  that  would  clearly 
have  placed  them  under  the  dominion  and  control 


911 

of  Dobbins)  Pleasants  &  Co.,  and  would  have  put 
an  end  to  the  right  of  stoppage.  If  Dobbins 
Pleasants  &  Co.  had  then  shipped  the  goods  to 
Aydlett,  Eobinson  &  Co.,  at  Memphis,  there  could 
be  no  pretense  for  claiming  the  right  of  stoppage. 
Instead,  however,  of  taking  the  circuitous  course, 
Dobbins,  Pleasants  &  Co.  directed  Galbreath  &Put- 
nam  to  ship  the  goods  to  Aydlett,  Robinson  &  Co. 
at  Memphis,  and  to  ship  them  in  the  name  of  Dob- 
bins, Pleasants  &  Co.,  as  consignors;  and  accord- 
ingly this  direction  is  followed,  and  the  goods 
shipped  with  a  bill  of  lading,  in  the  name  of  Dob- 
bins, Pleasants  &  Co.,  as  the  consignors.  This  was 
a  clear  and  unmistakable  exercise  of  dominion  and 
ownership  of  the  goods,  which  is  wholly  inconsist- 
ent with  any  right  of  stoppage  on  the  part  of 
Galbreath  &  Putnam;  when  they  took  the  bill  of 
lading  in  the  name  of  Dobbins,  Pleasants  &  Co., 
and  shipped  the  goods  according  to  their  direc- 
tions to  Aydlett,  Robinson  &  Co.,  they  expressly 
recognized  the  right  of  Dobbins,  Pleasants  &  Co. 
to  control  them  as  owners,  and  their  right  to  con- 
sign them  to  Aydlett,  Robinson  &  Co.,  and  to  vest 
the  title  of  the  goods  in  them,  by  sending  along  the 
bill  of  lading  by  which  the  property  in  the  goods 
were  transferred  to  the  consignees. 

Upon  these  facts  and  circumstances  we  are  of 
opinion  that  the  Circuit  Judge  held  correctly  that 
Galbreath  &  Putnam  had  not  the  right  of  stoppage 
in  transitu." 

In  Memphis  &  L.  R.  R.  Co.  v.  Freed,  38  Ark,  614 
(1882),  F.,  a  merchant  at  Dardanelle,  Ark.,  ordered 
goods  of  W.  B.  &  Co.,  merchants  at  St.  Louis.  They 
sent  the  order  to  L.  A.  &  Co.  merchants  at  New  Or- 
leans, with  directions  to  ship  the  goods  to  F.  at 
Dardanelle,  and  to  send  them  the  bill  of  lading.  L. 
A.  &  Co.  filled  the  order,  shipped  the  goods  to  F.,  and 
sent  to  W.  B.  &  Co.  the  bill  and  bill  of  lading,  which 
had  been  taken  out  in  the  name  of  W.  B.  &  Co.,  and 
charged  the  goods  to  W.  B.  &  Co.  During  the  transit 
W.  B.  &  Co.  failed,  and  L.  A.  &  Co.,  claiming  the  right 


912 

of  stoppage  in  transits,  demanded  the  goods  from  the 
M.  &  L.  E.  E.  Co.,  which  was  transporting  the  goods. 
The  railroad  company  surrendered  the  goods  to  them. 
F.  then  sued  the  company  for  the  value  of  the  goods. 
It  was  held  that  L.  A.  &  Co.  were  not  the  vendors  of 
F. ;  that  there  was  no  privity  between  him  and  them ; 
that  they  had  no  right  to  stop  the  goods  upon  the  in- 
solvency of  W.  B.  &  Co.;  and  that  the  railroad  com- 
pany was  liable  to  F.  for  the  value  of  the  goods. 

In  Shepard  &  Morse  Lumber  Co.  v.  Burroughs,  62 
N.  J.  L.,  469  (1898),  the  plaintiff  sold  lumber  to  T. 
and  T.  sold  it  to  the  defendant.  The  lumber  was 
shipped  directly  by  the  plaintiff  to  B.,  the  purchaser 
from  T.  The  bills  of  lading  named  B.  as  consignee 
and  were  sent  to  T.  It  was  held  that  upon  the  in- 
solvency of  T.,  the  plaintiff  had  no  right  of  stoppage 
in  transitu,  on  the  ground  that  when  T.  received  the 
bills  of  lading  he  received  them  for  B.,  his  purchaser, 
and  this  constituted  a  delivery  of  the  document  of  title 
toB. 

In  Niemeyer  v.  R:  R.  Co.,  54  Neb.,  321,  74  N.  W.,  70 
(1898),  D.,  of  Omaha,  ordered  a  bill  of  lumber  of  S.,  of 
Dallas,  Tex.  S.,  not  having  the  lumber  in  stock,  sent 
the  order  to  N.  at  Waldo,  Ark.,  requesting  him  to  ship 
the  lumber  to  D.  at  Omaha,  on  account  of  S.,  and  send 
him  the  invoice  and  bill  of  lading.  This  was  done. 
While  the  lumber  was  in  transit  S.  failed,  and  N.  noti- 
fied the  carrier  not  to  deliver  the  lumber.  The  carrier 
delivered  to  D.,  the  consignee,  and  N.  sued  the  carrier 
for  conversion.  It  was  held  that  N.  was  not  D.'s 
vendor,  but  consignor  merely,  and  could  not  exercise 
the  right  of  stoppage  in  transitu. 

Other  cases  are  to  the  same  effect : 
Noble  v.  Adams,  7  Taunt.,  59. 
Eaton  v.  Cook,  32  Vt.,  58. 

In  Delta  Bag  Co.  v.  Kearns,  112  111.  App.,  269  (1904), 
the  Delta  Bag  Co.,  of  New  Orleans,  sold  to  Daniels  & 
Son,  of  New  York,  a  carload  of  burlaps.  The  car  was 
shipped  to  Chicago  over  the  Illinois  Central  and  the 
bill  of  lading  was  delivered  to  Delta  Bag  Company  at 
New  Orleans,  in  which  Daniels  &  Son  were  named  as 


913 

consignors  as  well  as  consignees.  The  bill  of  lading 
was  sent  to  Daniels  &  Son,  but  was  never  indorsed  by 
them  so  as  to  transfer  title  to  a  third  person.  It  was 
held  that  the  Delta  Bag  Company  had  the  right  to  stop 
the  good  in  transit  upon  the  insolvency  of  Daniels  & 
Son. 

In  Lyons  v.  Hoffnung,  15  App.  Gas.,  391  (House  of 
Lords),  the  purchaser  of  goods  directed  the  vendors 
to  deliver  the  goods  at  a  certain  wharf  to  be  consigned 
to  the  purchaser  at  a  certain  point.  The  vendors  de- 
livered the  goods  and  took  receipts  from  the  ship  own- 
ers for  the  same,  which  they  delivered  to  the  pur- 
chaser, who  exchanged  them  for  bills  of  lading.  It 
was  held  that  the  goods  were  subject  to  the  right  of 
stoppage  by  the  vendor. 

It  should  be  noted  that  it  is  the  real  interest  on  one 
side  as  vendor  and  the  liability  on  the  other  as  vendee 
which  gives  the  right  of  stoppage ;  not  the  technical 
designation  of  the  parties  in  the  bill  of  lading  as  con- 
signor and  consignee.  The  doctrine  of  stoppage  in 
transitu  must  be  determined  strictly  according  to  the 
decided  cases.  Under  the  rules  as  laid  down  in  the 
cases  above  cited  I  am  of  the  opinion  that  in  the  pres- 
ent instance  B.,  by  taking  the  bill  of  lading  in  the 
name  of  A.,  deprived  himself  of  the  right  of  stoppage 
in  transit. 

It  makes  no  difference  as  to  whether  the  petition  in 
bankruptcy  was  filed  before  or  after  the  bill  of  lading 
was  issued,  as  to  who  would  be  entitled  to  pay  for  the 
car  from  C.  Under  the  facts  as  above  stated  the  re- 
ceiver in  bankruptcy  of  A.  would  in  either  csase  be  en- 
titled to  collect  from  C.  payment  for  the  car  of  goods, 
and  B.  would  be  compelled  to  file  his  claim  in  the  bank- 
ruptcy proceedings  of  A. 

In  a  case  such  as  the  above  a  better  method  for  B. 
to  pursue  would  be  to  take  out  a  bill  of  lading  in  his 
own  name  as  consignor,  and  send  the  bill  of  lading  to 
C.  If  he  fails  to  do  so,  but  allows  the  bill  of  lading  to 
be  taken  in  the  name  of  A.,  he  does  so  at  his  peril  and 
must  look  to  A.  for  payment. 


914 


THE  LEGALITY,  UNDER  THE  INTERSTATE  COMMERCE  ACT,  OF 
THE  PRIVILEGE  OF  ALLOWING  STOP-OVERS  ON  GOODS  IN 
TRANSIT. 

(Illinois  Mfrs.  Assn.,  October  8,  1906.) 
"August  28th  the  Central  Freight  Association 
sent  out  a  circular  to  the  effect  that  all  carriers 
in  the  organization  had  agreed  to  discontinue 
the  privilege  of  allowing  stop-overs  in  goods  in 
transit.  It  has  been  the  custom  in  some  lines, 
such  as  agricultural  implements,  vehicles  and 
stoneware,  to  allow  the  manufacturer  to  stop  a 
car  in  transit  and  either  add  to  its  contents  or 
remove  part.  The  custom  has  only  applied  to 
carload  shipments  and  has  been  in  effect  a  great 
many  years.  The  shipper  paid  the  full  rate  for 
the  maximum  distance  and  from  $3  to  $10  for 
stopping  the  car.  I  have  been  asked  for  your 
opinion  as  to  the  legality  of  this  stopping  privi- 
lege. ' ' 
In  St.  Louis  Hay  &  Grain  Co.  v.  Mobile  &  0.  R.  R. 

Co.,  11  I.  C.  C.  Rep.,  90  (May  15,  1905),  the  Interstate 

Commerce  Commission  said  (p.  101) : 

"The  stopping  of  a  commodity  in  transit  for 
the  purpose  of  treatment  or  reconsigmnent  is 
in  the  nature  of  special  privilege  which  the  car- 
rier may  concede,  but  which  the  shipper  cannot, 
in  the  present  state  of  the  law,  demand  as  a  mat- 
ter of  lawful  right.  Diamond  Mills  v.  Boston 
&  M.  R.  Co.,  9  I.  C.  C.  Rep.,  311.  Carriers  may 
not,  however,  discriminate  between  markets  nor 
between  individuals  in  the  granting  of  such  privi- 
leges. If  this  right  is  given  to  the  markets  which 
compete  with  East  St.  Louis  in  this  business  by 
these  defendants  it  should  prim  a  facie,  also  be 
granted  to  that  market.  If  these  defendants  al- 
low this  privilege  to  the  competitors  of  the  com- 
plainant at  East  St.  Louis  they  should  accord  it 
the  same  privilege." 
Special  privileges  granted  by  the  carriers,  such  as 

milling  in  transit,  compressing  cotton  in  transit,  re- 


915 

consigning  hay  in  transit,   dressing   of  lumber,   etc., 

have   been   held   lawful   so   long  as   the   privilege  is 

granted  to  all,  and  no  unjust  discrimination  exercised. 

Central  Yelloiv  Pine  Ass'n  v.  F.  8.  &  P.  R. 

Co.,  10  I.  C.  C.  Eep.,  193  (1904). 
Koch  v.  Penn.  R.  Co.,  10  I.  C.  C.  Eep.,  675 

(1905). 
Diamond  Mills  v.  B.  &  M.  R.  Co.,  9  I.  C.  C. 

Eep.  311  (1902). 
Re  Rates  &  Practices  of  M.  &  0.  R.  Co.,  9 

I.  C.  C.  Eep.,  373  (1903). 
Re  Unlawful  Rates  in  Transportation  of  Cot~ 

ton,  8  I.  C.  C.  Eep.,  121  (1899). 
Laurel  Cotton  Mills  v.  G.  &  S.  I.  R.  Co.,  37 

S.,  134  (Miss.,  1904). 
A.  &  V.  Ry.  Co.  v.  R.  R.  Commission  38  So., 

356  (Miss.,  1905). 

Thus  in  Koch  v.  Penn.  R.  Co.,  10  I.  C.  C.  Eep.,  675 
(April  11,  1905),  the  Interstate  Commerce  Commission 
said : 

"Shippers  are  not  entitled  as  a  matter  of  right 
to  mill  grain  in  transit  and  forward  the  milled 
product  under  the  through  rate  in  force  on  the 
grain  from  the  point  of  origin  to  the  place  of  ulti- 
mate destination,  but  allowance  of  the  privilege 
by  a  carrier  to  shippers  in  one  section  must  be 
without  wrongful  prejudice  to  the  rights  of  ship- 
pers in  another  section  served  by  its  line." 
And  in  Diamond  Mills  v.  Boston  &  Maine  R.  Co., 
9  I.  C.  C.  Eep.,  311  (1902),  it  was  held: 

"At  common  law,  and  under  the  act  to  regulate 
commerce  as  interpreted  by  the  courts,  joint 
through  routes  are  matters  of  contract  between 
the  connecting  carriers,  and  the  defendant,  as 
party  to  a  joint  tariff  which  does  not  give  shippers 
the  privilege  of  milling  in  transit,  acted  within 
its  legal  right  in  notifying  its  immediate  connec- 
tions and  the  complainant  that  it  would  not  per- 
mit that  practice." 

In  Re  Rates  and  Practices  of  M.  &  0.  R.  Co.,  9  I.  C. 
C.  Eep.,  373  (1903),  it  is  said: 

"If  stop  over  privileges  are  granted  for  any 


916 

purpose,  all  the  facts  and  circumstances  con- 
nected therewith  should  be  clearly  stated  in  the 
published  tariff,  so  that  the  public  generally  may 
enjoy  their  benefits." 

The  granting  of  stop  overs  for  carload  shipments 
and  allowing  the  shipper  to  add  to  or  remove  part 
of  the  contents  is  a  grant  of  a  special  privilege  to 
which  the  shipper  is  not  entitled  as  a  matter  of  rights. 
Previous  to  the  passage  of  the  Hepburn  Act  amend- 
ing the  Interstate  Commerce  Act  the  carrier  could  not 
be  compelled  to  grant  these  stop  over  privileges.  The 
Interstate  Commerce  Act  as  amended  now  provides 
(Sec.  15) : 

"That  the  Commission  is  authorized  and  em- 
powered, and  it  shall  be  its  duty,  whenever,  after 
full  hearing  upon  a  complaint  made  as  provided 
in  section  thirteen  of  this  act,  or  upon  complaint 
of  any  common  carrier,  it  shall  be  of  the  opinion 
that  any  of  the  rates,  or  charges  whatsoever, 
demanded,  charged,  or  collected  by  any  common 
carrier  or  carriers,  subject  to  the  provisions  of 
this  act,  for  the  transportation  of  persons  or 
property  as  defined  in  the  first  section  of  this  act, 
or  that  any  regulations  or  practices  whatsoever 
of  such  carrier,  or  carriers  affecting  such  rates 
are  unjust  or  unreasonable,  or  unjustly  discrimi- 
natory, or  unduly  prefertial  or  prejudicial,  or 
otherwise  in  violation  of  any  of  the  provisions 
of  this  act,  to  determine  and  prescribe  what  will 
be  the  just  and  reasonable  rate  or  rates,  charge 
or  charges,  to  be  thereafter  observed  in  such  case 
as  the  maximum  to  be  charged;  and  what  regula- 
tion or  practice  in  respect  to  such  transporta- 
tion is  just,  fair  and  reasonable  to  be  thereafter 
followed;  and  to  make  an  order  that  the  carrier 
shall  cease  and  desist  from  such  violation,  to  the 
extent  to  which  the  Commission  find  the  same  to 
exist,  and  shall  not  thereafter  publish,  demand, 
or  collect  any  rate  or  charge  for  such  transpor- 
tation in  excess  of  the  maximum  rate  or  charge 
so  prescribed,  and  shall  conform  to  the  regu- 
lation or  practice  so  prescribed." 


917 

I  think  the  privilege  can  probably  be  withdrawn. 
If,  however,  the  withdrawal  of  stop  overs  so  long- 
granted  is  in  fact  unjustly  prejudicial  or  unreason- 
able, complaint  should  be  made  to  the  Interstate  Com- 
merce Commission  for  redress  under  Section  15  of 
the  act.  That  involves  a  question  of  fact  for  the 
Commission  to  pass  upon. 


AS  TO  WHETHER  UNDER  THE  INTERSTATE  COMMERCE  ACT 
CARRIERS  CAN  BE  COMPELLED  TO  INTERCHANGE  FACILI- 
TIES AND  SWITCHING. 

(The  Weaver  Organ  &  Piano  Co.,  October  12,  1906.) 

' '  Do  you  know  whether  there  is  anything  in  the 
new  law  compelling  railroads  to  interchange  cars 
in  towns  entered  by  two  competitive  roads'?  In 
other  words,  our  factory  is  along  the  line  of  the 
M.  &  P.  R.  K.  We  can  have  cars  placed  in  front 
of  the  factory  on  this  road  or  by  the  Pennsylvania 
E.  R.,  but  these  railroads  will  not  allow  the  West- 
ern Maryland  R.  R.  permission  to  run  their  cars 
on  the  siding  in  front  of  our  factory.  The  Penna. 
R.  R.  positively  refuses  to  receive  the  cars  from 
the  Western  Maryland.  They  claim  that  they  are 
not  obliged  to  allow  the  Western  Maryland  to  use 
their  terminal  facilities  even  if  we  do  pay  a  rea- 
sonable charge  for  the  privilege. 

If  you  could  make  a  suggestion  that  would  help 
us  get  this  privilege,  we  would  appreciate  it." 
In  my  opinion  of  March  17,  1905,  for  the  Illinois 
Manufacturers'  Association,  I  discussed  at  length  the 
question  as  to  whether  a  railroad  company  is  compelled 
to  receive  cars  from  a  connecting  carrier  or  to  allow  the 
use  of  its  tracks  or  terminal  facilities  to  another  car- 
rier.   To  that  opinion  I  refer. 

At  common  law  a  carrier  is  free  to  enter  into  ar- 
rangements for  the  use  of  its  tracks  or  terminal  with 
one  or  more  connecting  lines  to  the  exclusion  of  others, 
and  in  making  such  arrangements  it  does  not  subject 


918 

itself  to  the  charge  of  giving  undue  preference  or  ad- 
vantages. 

Oregon  Short  Line  v.  No.  Pac.  R.  Co.,  51  Fed., 

465. 
A.  T.  &  S.  F.  R.  Co.  v.  V.  D.  N.  &  0.  R.  Co., 

110  U.  S.,  667. 

And  under  the  Interstate  Commerce  Act  prior  to 
the  passage  of  the  Hepburn  Bill  amending  the  Act,  it 
was  generally  held  that  a  carrier  may  grant  certain 
facilities  to  one  connecting  carrier  and  refuse  the 
same  to  another,  without  subjecting  itself  to  a  charge 
of  discrimination.  This  conclusion  was  based  on  the 
provision  of  the  second  paragraph  of  Section  3  of  the 
Interstate  Commerce  Act  in  reference  to  the  inter- 
change of  facilities  that  "this  shall  not  be  construed 
as  requiring  any  such  common  carrier  to  give  the  use 
of  its  tracks  or  terminal  facilities  to  another  carrier 
engaged  in  like  business."  Thus  the  Interstate  Com- 
mission in  R.  R.  Commission  of  Kentucky  v.  L.  &  N. 
R.  Co.,  10  I.  C.  C.  E.ep.,  173,  said  (p.  188) : 

"Probably  the  framers  of  the  act  to  regulate 
commerce  supposed  that  the  third  section  would 
compel,  under  certain  cimcumstances,  such  inter- 
change of  cars.  A  moment's  thought  will  show  that 
every  such  exchange  is  a  matter  of  contract  be- 
tween the  parties  in  which  the  terms  and  condi- 
tions upon  which  the  exchange  shall  be  made  are 
specified,  and  it  is  apparent  to  one  at  all  ac- 
quainted with  railway  operations  that  to  arbi- 
trarily compel  the  interchange  of  cars  under  all 
circumstances  would  be  unjust.  The  act  to  regu- 
late commerce  provides  no  means  for  determining 
when  carriers  shall  be  compelled  to  make  this  in- 
terchange, or  for  fixing  the  conditions  upon  which 
it  shall  be  made,  and  in  construing  that  act  the 
courts  have,  with  practical  unanimity,  held  that 
carriers  were  still  free  to  make  arrangements  of 
this  sort  by  contract  among  themselves,  and  that 
there  was  nothing  in  the  act  which  authorized 
either  the  Commission  or  the  courts  to  compel  one 
railroad  company  to  deliver  its  cars  to  another. 
Kentucky  &  I.  Bridge  Co.  v.  Louisville  &  N.  R. 


919 

Co.,  2  Inters.  Com.  Rep.,  351,  2  L.  R.  A.,  289,  37 
Fed.,  567;  Oregon  Short  Line  &  U.  N.  R.  Co.  v. 
Northern  P.  R.  Co.,  4  Inters.  Com.  Rep..  249,  51 
Fed.,  465;  Little  Rock  &  M.  R.  Co.  v.  St.' Louis  & 
S.  W.  R.  Co.,  4  Inters.  Com.  Rep.,  854,  26  L.  R. 
A.,  192,  11  C.  C.  A.,  417,  27  U.  S.  App.,  380,  63 
Fed.,  775. 

Just  what  the  seventh  section  may  have  been 
intended  to  accomplish  is  not  certain.  Possibly 
the  legislature  had  in  mind  that  railways  might 
attempt  to  relieve  themselves  from  its  provisions 
by  interrupting  traffic  at  state  lines,  and  thereby 
deprive  it  of  the  character  of  interstate  business. 
The  seventh  section  may  have  been  intended  to 
prevent  this.  At  any  rate  we  are  clear  that  it  adds 
nothing  to  the  third  section  in  support  of  this 
claim  of  the  complainant,  and  conclude  that  the, 
act  to  regulate  commerce  does  not  confer  upon 
this  Commission  authority  to  make  an  order  af- 
firmatively requiring  a  railway  carrier  to  deliver 
carloads  of  interstate  freight  to  a  connecting  car- 
rier. This  Commission  has  more  than  once  called 
the  attention  of  Congress  to  this  state  of  the  law. 
Second  Annual  Rep.,  p.  70,  and  nearly  every  re- 
port since." 

Sections  3  and  7  of  the  Interstate  Commerce  Act 
are  still  in  force  and  were  not  amended  or  changed  by 
the  Hepburn  Bill.  Section  3  is  as  follows: 

"Every  common  carrier  subject  to  the  provis- 
ions of  this  act  shall,  according  to  their  respect- 
ive powers,  afford  all  reasonable,  proper  and 
equal  facilities  for  the  interchange  of  traffic  be- 
tween their  lines,  and  for  the  receiving,  forward- 
ing, and  delivering  of  passengers  and  property  to 
and  from  their  several  lines  and  those  connecting 
therewith,  and  shall  not  discriminate  in  their 
rates  and  charges  between  such  connecting  lines; 
but  this  shall  not  be  construed  as  requiring  any 
such  common  carrier  to  give  the  use  of  its  tracks 
or  terminal  facilities  to  another  carrier,  engaged 
in  like  business." 


920 

Section  7  provides : 

"That  it  is  unlawful  for  any  common  carrier 
subject  to  the  provisions  of  this  act  to  enter  into 
any  combination,  contract,  or  agreement,  ex- 
pressed or  implied,  to  prevent,  by  change  of  time 
schedule,  carriage  in  different  cars,  or  by  other 
means  or  devices,  the  carriage  of  freights  from 
being  continuous  from  the  place  of  shipment  to 
the  place  of  destination;  and  no  break  of  bulk, 
stoppage,  or  interruption  made  by  such  common 
carrier  shall  prevent  the  carriage  of  freights 
from  being  and  being  treated  as  one  continuous 
carriage  from  the  place  of  shipment  to  the  place 
of  destination,  unless  such  break,  stoppage,  or  in- 
terruption was  made  in  good  faith  for  some  nec- 
essary purpose,  and  without  any  intent  to  avoid 
or  unnecessarily  interrupt  sijch  continuous  car- 
riage or  to  evade  any  of  the  provisions  of  this 
act." 

Under  these  sections  it  is  lawful  for  the  carries  to 
refuse  to  grant  to  other  carriers  the  use  of  its  terminal 
facilities  or  tracks.  The  carrier  can  not  be  compelled 
to  accept  the  loaded  cars  tendered  by  a  connecting  line, 
although  it  must  accept  for  transportation  the  goods 
shipped  in  the  cars. 

Section  15  of  the  Interstate  Commerce  Act,  as 
amended,  provides: 

"The  Commission  may  also,  after  hearing  on 
a  complaint,  establish  through  routes  and  joint 
rates  as  the  maximum  to  be  charged  and  pre- 
scribe the  division  of  such  rates  as  hereinbefore 
provided,  and  the  terms  and  conditions  under 
which  such  through  routes  shall  be  operated, 
when  that  may  be  necessary  to  give  effect  to  any 
provisions  of  this  act,  and  the  carriers  complained 
of  have  refused  or  neglected  to  voluntarily  estab- 
lish such  through  routes  and  joint  rates,  provided 
no  reasonable  or  satisfactory  through  route  exists, 
and  this  provision  shall  apply  when  one  of  the 
connecting  carriers  is  a  water  line." 
Section  1  of  the  Interstate  Commerce  Act,  as 
amended,  provides : 


921 

"Any  common  carrier  subject  to  the  provisions 
of  this  act,  upon  application  of  any  lateral,  branch 
line  of  railroad,  or  of  any  shipper  tendering  in- 
terstate traffic,  for  transportation,  shall  construct, 
maintain,  and  operate  upon  reasonable  terms  a 
switch  connection  with  any  such  lateral,  branch 
line  of  railroad,  or  private  side  track  which  may 
be  constructed  to  connect  with  its  railroad,  where 
such  connection  is  reasonably  practicable  and  can 
be  put  in  with  safety  and  will  furnish  sufficient 
business  to  justify  the  construction  and  mainte- 
nance of  the  same ;  and  shall  furnish  cars  for  the 
movement  of  such' traffic  to  the  best  of  his  ability 
without  discrimination  in  favor  of  or  against  any 
such  shipper.  If  any  common  carrier  shall  fail 
to  install  and  operate  any  such  swith  or  connec- 
tion as  aforesaid,  on  application  therefor  in  writ- 
ing by  any  shipper,  such  shipper  may  make  com- 
plaint to  the  Commission,  as  provided  in  section 
thirteen  of  this  act,  and  the  Commission  shall 
hear  and  investigate  the  same  and  shall  determine 
as  to  the  safety  and  practicability  thereof  and 
justification  and  reasonable  compensation  there- 
for, and  the  Commission  may  make  an  order,  as 
provided  in  section  fifteen  of  this  act,  directing  the 
common  carrier  to  comply  with  the  provisions  of 
this  section  in  accordance  with  such  order,  and 
such  order  shall  be  enforced  as  hereinafter  pro- 
vided for  the  enforcement  of  all  other  orders  by 
the  Commission,  other  than  orders  for  the  pay- 
ment of  money. ' ' 

I  am  of  the  opinion,  however,  that  these  additional 
provisions  do  not  give  the  Interstate  Commerce  Com- 
mission power  to  compel  the  M.  &  P.  B.  R.  Co.  or  the 
Pennsylvania  R.  R.  Co.  to  allow  the  use  of  their  tracks 
or  terminal  facilities  to  the  Western  Maryland  R.  R. 
in  order  to  run  its  cars  on  the  siding  in  front  of  the 
factory  of  the  Weaver  Organ  &  Piano  Company. 
However,  it  is  the  duty  of  the  Pennsylvania  R.  R.  to 
receive  freight  tendered  it  by  the  Western  Maryland 
R.  R.  destined  to  your  factory,  and  also  to  accept 


922 

freight  from  your  factory  to  be  delivered  to  the  West- 
ern Maryland  B.  B.  And  under  Section  15  of  the  act, 
above  quoted,  if  the  Pennsylvania  B.  B.  Co.  will  not 
enter  into  a  through  rate  with  the  Western  Maryland 
for  carload  shipments,  complaint  should  be  made  to 
the  Interstate  Commerce  Commission,  which  has 
power  to  "establish  through  routes  and  joint  rates 
*  and  the  terms  and  conditions  under  which  such 
through  rates  shall  be  operated."  On  the  other  hand, 
I  am  of  the  opinion  that  the  Pennsylvania  B.  B.  or 
the  M.  &  P.  B.  B.  cannot  be  forced  to  allow  the  West- 
ern Maryland  B.  B.  itself  to  deliver  its  cars  over  their 
tracks  to  the  siding,  nor  can  the  M.  &  P.  B.  B.  or  the 
Penn.  B.  B.  be  compelled  to  receive  empty  cars  from 
the  Western  Maryland  B.  B.  to  be  delivered  to  the 
siding  at  the  factory  on  the  M.  &  P.  B.  B. 


AS  TO  WHETHER  RAILROADS  PERFORMING  TERMINAL 
SWITCHING  SERVICE  CAN  BE  COMPELLED  TO  MAKE 
THROUGH  ROUTES  AND  RATES  UNDER  THE  INTERSTATE 
COMMERCE  ACT;  AS  TO  WHAT  DELIVERY  CAN  BE  RE- 
QUIRED UNDER  AN  INTERSTATE  RATE  TO  CHICAGO  ;  AS  TO 
WHAT  ARE  THE  LEGAL  SWITCHING  RATES  UNDER  THE  ILLI- 
NOIS MAXIMUM  RATE  SCHEDULE  ;  AS  TO  WHAT  DELIVERY 
CAN  BE  REQUIRED  IN  PURELY  LOCAL  INTERSTATE  SWITCH- 
ING BUSINESS  IN  CHICAGO  AND  IN  ILLINOIS,  AND  AS  TO 
WHETHER  A  CARRIER  CAN  ASSESS  A  PER  DIEM  CHARGE  IN" 
ADDITION  TO  A  SWITCHING  CHARGE. 

(Illinois     Manufacturers'     Association,     October     12, 

1906.) 

My  opinion  is  asked  on  a  number  of  questions  in 
reference  to  terminal  charges  and  through  rates  under 
the  recent  Hepburn  Act,  etc.  I  reply  to  the  question 
seriatim.  The  first  question  is : 

(1)  "Can  railroads  performing  only  a  so- 
called  terminal  switching  service  on  given  traf- 
fic be  compelled  to  make  and  publish  through  rates 
on  interstate  shipments  of  such  traffic,  with  their 
connections?" 


923 

The  Interstate  Commerce  Act  as  amended  by  the 
Hepburn  Bill  provides  inter  alia: 

"  (Sec.  1.)  That  the  provisions  of  this  act  shall 
apply  "  /f  to  any  common  carrier  or  carriers 
engaged  in  the  transportation  of  :  'f  property 
wholly  by  railroad  *  *  from  one  state  or  terri- 
tory *  *  to  any  other  state  or  territory  *  ' 
Provided,  however,  That  the  provisions  of  this 
act  shall  not  apply  to  the  transportation  of  * 
property,  to  the  receiving,  delivering,  storage, 
or  handling  of  property  wholly  within  one  state, 
and  not  shipped  to  or  from  a  foreign  country 
from  or  to  any  State  or  Territory  as  aforesaid 

*  *.  The  term  'railroad'  *  ::  *  shall  °  '  in- 
clude all  switches,  spurs,  tracks,  and  terminal  fa- 
cilities of  every  kind  used  or  necessary  in  the 
transportation  of  the  persons  or  property  desig- 
nated herein  *  *  and  all  services  in  connection 
with  the  receipt,  delivery,  *  *,  and  handling  of 
property  transported ;  and  it  shall  be  the  duty  of 
every  carrier  *  *  to  provide  and  furnish  such 
transportation  upon  reasonable  request  therefor, 
and  to  establish  through  routes  and  just  and  rea- 
sonable rates  applicable  thereto  *  '  *. 

Any  common  carrier  subject  to  the  provisions 
of  this  act,  upon  application  of  any  lateral  branch 
line  of  railroad,  or  of  any  shipper  tendering  in- 
terstate traffic  for  transportation,  shall  construct, 
maintain,  and  operate  upon  reasonable  terms  a 
switch  connection  with  any  such  lateral  branch 
line  of  railroad,  or  private  side  track  which  may 
be  constructed  to  connect  with  its  railroad,  where 
such  connection  is  reasonably  practicable  and 
can  be  put  in  with  safety  and  will  furnish  suffi- 
cient business  to  justify  the  construction  and 
maintenance  of  the  same;  and  shall  furnish  cars 
for  the  movement  of  such  traffic  to  the  best  of 
its  ability  without  discrimination  in  favor  of  or 
against  any  such  shipper.  If  any  common  carrier 
shall  fail  to  install  and  operate  any  such  switch 
or  connection  as  aforesaid,  on  application  there- 


924 

for  in  writing  by  any  shipper,  such  shipper  may 
make  complaint  to  the  Commission,  as  provided 
in  section  thirteen  of  this  act,  and  the  Commission 
shall  hear  and  investigate  the  same  and  shall  de- 
termine as  to  the  safety  and  practicability  thereof 
and  justification  and  reasonable  compensation 
therefor,  and  the  Commission  may  make  an  order, 
as  provided  in  section  fifteen  of  this  act,  directing 
the  common  carrier  to  comply  with  the  provisions 
of  this  section  in  accordance  with  such  order,  and 
such  order  shall  be  enforced  as  hereinafter  pro- 
vided for  the  enforcement  of  all  other  orders  by 
the  Commission,  other  than  orders  for  the  pay- 
ment of  money." 

"  (Sec.  3.)  Every  common  carrier  subject  to 
the  provisions  of  this  act  shall,  according  to  their 
respective  powers,  afford  all  reasonable,  proper, 
and  equal  facilities  for  the  interchange  of  traffic 
between  their  respective  lines,  and  for  the  receiv- 
ing, forwarding,  and  delivering  of  passengers  and 
property  to  and  from  their  several  lines  and  those 
connecting  therewith,  and  shall  not  discriminate 
in  their  rates  and  charges  between  such  connect- 
ing lines;  but  this  shall  not  be  construed  as  re- 
quiring any  such  common  carrier  to  give  the  use 
of  its  tracks  or  terminal  facilities  to  another  car- 
rier engaged  in  like  business." 
Section  6  relates  to  the  publication  of  tariffs,  etc. 
It  provides: 

"That  every  common  carrier  subject  to  the  pro- 
visions of  this  act  shall  file  with  the  Commission 
created  by  this  act  and  print  and  keep  open  to 
public  inspection  schedules  showing  all  the  rates, 
fares,  and  charges  for  transportation  between  dif- 
ferent points  on  its  own  route  and  between  points 
on  its  own  route  and  points  on  the  route  of  any 
other  carrier  by  railroad,  by  pipe  line,  or  by  water 
when  a  through  route  and  joint  rate  have  been 
established.  If  no  joint  rate  over  the  through 
route  has  been  established,  the  several  carriers 
in  such  through  route  shall  file,  print  and  keep 


925 

open  to  public  inspection,  as  aforesaid,  the  sep- 
arately established  rates,  fares  and  charges  ap- 
plied to  the  through  transportation. 

The  schedules  printed  as  aforesaid  by  any  such 
common  carrier  shall  plainly  state  the  places  be- 
tween which  property  and  passengers  will  be  car- 
ried, and  shall  contain  the  classification  of  freight 
in  force,  and  shall  also  state  separately  all  ter- 
minal charges,  storage  charges,  icing  charges,  and 
all  other  charges  which  the  Commission  may  re- 
quire, all  privileges  or  facilities  granted  or  al- 
lowed and  any  rules  or  regulations  which  in  any 
wise  change,  affect  or  determine  any  part  or  the 
aggregate  of  such  aforesaid  rates,  fares,  and 
charges,  or  the  value  of  the  service  rendered  to 
the  passenger,  shipper,  or  consignee. ' ' 
Section  15  provides: 

"That  the  commission  is  authorized  and  em- 
powered *  *  *  whenever  *  *  any  of  the  rates 
or  charges  whatsoever,  demanded,  charged  or  col- 
lected by  any  common  carrier  *  *  :*  for  the  trans- 
portation of  *  *  :<f  property  as  defined  in  the  first 
section  of  this  act,  or  that  any  regulations  or  prac- 
tices whatsoever  of  such  carrier  *  *  *  affecting 
such  rates  are  unjust  or  unreasonable  or  unjustly 
discriminatory,  or  unduly  preferential  or  preju- 
dicial, or  otherwise  in  violation  of  any  of  the  pro- 
visions of  this  act,  to  determine  and  prescribe 
what  will  be  the  just  and  reasonable  rate  or  rates, 
charge  or  charges,  to  be  thereafter  observed  in 
such  case  as  the  maximum  to  be  charged,  and  what 
regulation  or  practice  in  respect  to  such  trans- 
portation is  just,  fair  and  reasonable  to  be  there- 
after followed;  and  to  make  an  order  that  the 


practice    so    prescribed.  *  The    Commission 

may  also,  after  hearing  on  a  complaint,  estab- 
lish through  routes  and  joint  rates  as  the  maxi- 
mum to  be  charged  and  prescribe  the  division  of 
such  rates  as  hereinbefore  provided,  and  the  terms 
and  conditions  under  which  such  through  routes 


926 

shall  be  operated,  when  that  may  be  necessary  to 
give  effect  to  any  provision  of  this  act,  and  the 
carriers  complained  of  have  refused  or  neglected 
to  voluntarily  establish  such  through  routes  and 
joint  rates,  provided  no  reasonable  or  satisfactory 
through  route  exists,  and  this  provision  shall 
apply  when  one  of  the  connecting  carriers  is  a 
water  line." 

I  assume  that  the  railroad  performing  only  the  so- 
called  switching  service,  performs  such  service  wholly 
within  the  limits  of  the  state  and  that  such  railroad 
is  not  in  any  way  holding  itself  out  as  an  interstate 
carrier.  The  proviso  to  Section  1  of  the  Hepburn  Act 
expressly  provides  that  the  act  shall  not  apply  to  the 
"handling  of  property"  wholly  within  the  limits  of  a 
state.  This  would  include  switching  service.  A  rail- 
road which  is  performing  such  a  service  wholly  within 
the  limits  of  a  state,  is  not  subject  to  the  act  and  could 
not  be  compelled  to  establish  through  routes  under 
section  15  of  the  act.  The  provisions  of  section  15 
in  regard  to  compelling  the  establishment  of  through 
routes  are  also  limited  by  the  proviso  that  "No  rea- 
sonable or  satisfactory  through  route  exists."  I  there- 
fore answer  the  first  question  in  the  negative. 
The  second  question  is  as  follows: 

(2)  "Can  initial  railroads  performing  so-called 
long  hauls  be  compelled  to  publish  through  rates 
for  delivery  on  the  terminals  of  another  railroad 
in  a  city  of  destination  reached  by  both?" 
Subject  to  the  limitations  contained  in  section  15 
above  referred  to,  I  am  of  the  opinion  that  the  Com- 
mission has  the  power  to  compel  the  initial  carrier  to 
make  joint  arrangements  with  a  connecting  carrier 
for  delivery  on  the  terminals  of  such  connecting  car- 
rier.    There  is  no  doubt  that  if  the  destination  of  a 
shipment  is  a  regularly  established  station  on  the  line 
of  the  connecting  carrier  that  the  commission  may, 
subject  to  the  limitations  of  section  15,  compel  the  car- 
riers to  establish  through  routes  and  joint  rates.     If 
the  shipment  is  not  to  a  regular  station,  the  initial 
carrier  is  obligated,  until  the  Commission  otherwise 


927 

orders,  to  publish  the.  terminal  charges,  etc.,  imposed 
by  the  delivering  carrier. 
The  next  question  is : 

(3)  "When  a  road  publishes  a  rate  to  Chicago 
without   qualification  what  delivery  may   a  con- 
signee located  on  the  tracks  of  another  railroad 
having  track  connections  within  the  City  of  Chi- 
cago legally  require  under  the  rate  to  Chicago!" 

The  question  of  the  duty  of  the  carrier  in  respect  to 
making  delivery  to  the  consignee  is  covered  in  my  opin  - 
ion  to  the  association  of  March  19,  1904,  in  answer  to 
the  query  of  Block-Pollak  Iron  Co.  The  carrier  is  not 
obligated  to  deliver  to  a  consignee  located  upon  the 
tracks  of  another  railroad  company. 

The  next  question  is : 

(4)  "When  a  railroad  publishes  a  rate  from 
Chicago  without  qualification  will  that  rate  apply 
from  an  industry  located  on  the  tracks  of  another 
railroad  having  track  connections  and  within  the 
City  of  Chicago?" 

Such  rate  will  not  apply  from  a  point  upon  the  tracks 
of  another  railroad  even  though  within  the  City  of 
Chicago. 

The  next  question  is : 

(5)  "When   rates   are  published  to   and   from 
Chicago  without  qualification  on  L.  C.  L.  traffic, 
what  deliveries  may  consignees  in  Chicago  require 
and   where   may   Chicago   shippers   legally   offer 
traffic  for  forwarding  under  such  rates!" 

The  consignee  cannot  require  a  personal  delivery 
of  L.  C.  L.  freight.  Such  freight  must  be  tendered 
at  the  usual  and  customary  places  designated  by  the 
carrier. 

Illinois.    The  sixth  question  is : 

(6)  "Is   Eule    23    of   the   Illinois    Commission 
Schedule  enforcible  on  service  described  when  per- 
formed in  the  City  of  Chicago?" 

Rule  23  of  the  Illinois  R.  R.  &  W.  Commissioners, 
Schedule  No.  10  (July  1,  1906)  provides: 

"The  reasonable  maximum  rate  for  switching- 
loaded    cars    for    distances    not   exceeding   three 


928 

miles,  shall  be  ten  (10)  cents  per  ton  with  a  maxi- 
mum rate  of  four  dollars  per  car  and  a  minimum 
rate  of  two  dollars  per  car.  Switching  includes 
the  hauling  of  loaded  cars  from  the  station  yards, 
side  tracks,  elevators  or  warehouses  to  the  junc- 
tions of  other  railroads  when  not  billed  from  sta- 
tions on  its  own  road  to  said  junctions,  and  from 
junctions  of  other  railroads  to  the  stations,  side 
tracks,  elevators  and  warehouses  situated  on  the 
tracks  owned  or  controlled  by  the  railroad  com- 
pany doing  said  switching;  it  is  that  transfer 
charge  ordinarily  made  for  moving  loaded  cars 
for  short  distances  for  which  no  regular  way-bill 
is  made,  and  which  do  not  move  between  two  regu- 
larly established  stations  on  the  same  road." 
I  am  of  the  opinion  that  rule  23  does  not  apply  to 

the  service  described  when  performed  in  the  City  of 

Chicago. 

The  seventh  question  is : 

(7)  "Does   the  Illinois   Commission   switching 
rate  include  the  use  of  the  car?" 

In  my  opinions  for  the  Illinois  Manufacturers'  As- 
sociation of  November  14,  1904,  and  January  5,  1905, 
in  response  to  inquiries  from  W.  0.  King  &  Co.,  I 
discussed  this  question  and  gave  an  opinion  that 
switching  rate  under  the  Illinois  switching  rule  would 
probably  include  the  use  of  the  cars  where  the  shipper 
does  not  furnish  his  own  cars ;  and  in  any  event  any 
per  diem  charge  made  for  the  use  of  the  cars  must 
be  reasonable.* 

The  eighth  question  is : 

(8)  "When  the  switching  service  exceeds  three 
miles,  what  is  the  maximum  charge  in  Chicago  t" 

The  Illinois  Eailroad  and  Warehouse  Act,  Section 
131,  (Kurd's  Statutes,  1905,  page  1590)  provides  that 
the  railroad  and  warehouse  commissioners  shall  make 
for  each  of  the  railroad  corporations  doing  business 
in  the  state  a  schedule  of  reasonable  maximum  rates 


1.  NOTE: — See  the  opinion  of  April  20,  1907,  as  to  whether  a  carrier 
can  assess  per  diem  charge  for  the  use  of  cars  in  addition  to  a  switching 
charge. — Ed. 


929 

of  charges  for  the  transportation  of  passengers  and 
freights,  and  cars  of  each  of  said  railroads,  which 
rates  shall  be  deemed  prima  facie  reasonable  maxi- 
mum rates  for  the  transportation  of  freights  and  cars. 
Rule  23  of  the  Illinois  Commission  applies  only  ta 
switching  charges  not  exceeding  three  miles.  On  dis- 
tances over  three  miles,  within  the  City  of  Chicago,  I 
am  of  the  opinion  that  the  Illinois  Distance  Tariff 
(Illinois  Railroad  &  Warehouse  Commission  Schedule 
No.  10,  July  1,  1906)  governs,  and  that  the  maximum 
charge  in  Chicago  is  the  maximum  distance  charge 
allowed  in  the  Commission  Schedule. 

LOCAL. 

The  ninth  question  is : 

(9)  "Can  a  railroad  refuse  to  accept  cars  of- 
fered for  a  switching  service  for  delivery  on  its 
team  tracks  or  on  its  other  tracks  in  Chicago  when 
originating 

(a)  On  its  own  line  in  Chicago, 

(b)  On  a  connecting  line  in  Chicago, 

(c)  On  a  connecting  line  outside  of  Chicago, 
but  within  the  State  of  Illinois, 

(d)  On  a  connecting  line  outside  of  Chicago 
and  without  the  State  of  Illinois!" 

(a)  I  am  of  the  opinion  that  a  railroad  cannot  re- 
fuse to  accept  cars  offered  for  a  switching  service  for 
delivery  on  its  team  tracks  or  other  tracks  of  delivery 
in  Chicago  when  such  shipment  originates  on  its  own 
line  in  Chicago.    The  railroad  is,  as  a  common  carrier, 
obliged  to  carry  carloads  of  goods  offered  it  for  ship- 
ment on  its  own  line,  and  in  case  of  refusal,  the  duty 
may  be  enforced  by  mandamus. 

(b)  I  am  of  the  opinion  that  a  railroad  can  refuse 
to  accept  cars  when  offered  for  a  switching  service  for 
delivery  on  its  team  tracks  or  other  tracks  in  Chicago 
when  originating  on  a  connecting  line  in  Chicago.    At 
common  law  a  carrier  can  refuse  to  grant  the  use  of 
its  tracks  or  terminal  facilities  to  another  connecting 
line  and  can  refuse  to  accept  carloads  from  other  con- 
necting lines,  although  it  must  accept  the  goods  them- 
selves.   And  independent  of  statute  one  carrier  cannot 


930 

he  compelled  to  enter  into  arrangements  with  another 
connecting  carrier  for  the  interchange  of  cars.  (A.  T. 
&  8.  F.  R.  Co.  v.  V.  D.  &  0.  R.  Co.,  110  U.  S.,  667.)  This 
question  is  discussed  at  length  in  my  opinion  of  March 
17,  1905,  to  the  Illinois  Manufacturers'  Association,  in 
response  to  an  inquiry  from  Manierre-Yoe  Syrup  Com- 
pany. There  is  no  statutory  provision  in  this  state 
empowering  the  courts  or  the  Commission  to  com- 
pel carriers  to  enter  into  arrangements  for  through 
routes. 

(c)  I  am  of  the  opinion  that  a  railroad  can  refuse 
to  accept  cars  offered  for  a  switching  service  for  de- 
livery on  its  team  tracks  or  its  other  tracks  in  Chi- 
cago when  originating  on  a  connecting  line  outside  of 
Chicago  but  within  the  State  of  Illinois,  for  the  same 
reasons  stated  in  answer  to  the  previous  question. 

(d)  I  am  of  the  opinion  that  if  a  railroad  refuses 
to  accept  cars  offered  for  a  switching  service  for  de- 
livery on  its  team  tracks  or  its  other  tracks  in  Chicago, 
when  originating  on  a  connecting  line  outside  of  Chi- 
cago and  outside  the  State  of  Illinois,  that  under  the 
Interstate  Commerce  Act  as  amended  in  1906,  the  In- 
terstate Commerce  Commission  has  power  to  compel 
the  two  carriers  to  enter  into  a  joint  rate  and  to  pro- 
vide for  such  delivery.     This  question  is  covered  by 
my  answer  to  the  second  question,  and  also  by  my 
opinion  of  this  date  to  the  American  Shippers'  Asso- 
ciation in  response  to  an  inquiry  from  the  Weaver 
Organ  &  Piano  Co.  of  York,  Pa.,  to  which  I  refer. 

NOTE: — See  opinion  of  Nov.  7,  1906  (Illinois  Manufacturers'  Asso- 
ciation) supplemental  to  above  opinion  and  see,  also,  the  opinion  of 
April  20,  1907  (Edward  Hines  Lumber  Co.)  as  to  whether  a  carrier 
can  assess  a  per  diem  charge  in  addition  to  a  switching  charge. — Ed. 


931 


WHETHER  A  RAILROAD  ENGAGED  IN  INTERSTATE  COMMERCE 
PERFORMING  A  TERMINAL  SWITCHING  SERVICE  ON  TRAFFIC 
ORIGINATING  ON  ITS  OWN  TERMINALS  IN  CHICAGO  CAN 
BE  COMPELLED  TO  MAKE  AND  PUBLISH  THROUGH  RATES 
ON  INTERSTATE  SHIPMENTS  OF  SUCH  TRAFFIC  WITH  ITS 
CONNECTIONS  IN  CHICAGO. 

(Illinois    Manufacturers'   Association,    Nov.    7,    1906, 
supplementary  to  opinion  of  Oct.  12,  1906.) 

"Can  a  railroad  engaged  in  interstate  com- 
merce, performing  only  a  so-called  terminal 
switching  service  on  given  traffic  originating  on 
its  own  terminals  in  the  City  of  Chicago,  be  com- 
pelled to  make  and  publish  through  rates  on  inter- 
state shipments  of  such  traffic  with  its  connections 
at  Chicago?" 

Supplementing  my  former  opinion  of  October  12, 
1906?  I  reply  thus : 

The  Interstate  Commerce  Act  as  amended  in  1906 
applies  only  to  "carriers  engaged  in  the  transportation 
of  passengers  or  property  wholly  by  railroads  or  partly 
by  water,  when  both  are  used  under  a  common  control, 
management,  or  arrangement  for  a  continuous  car- 
riage or  shipment  from  one  state  or  territory  of  the 
United  States,  or  the  District  of  Columbia,  to  any  other 
state  or  territory  of  the  United  States,  or  the  District 
of  Columbia,  or  from  one  place  in  a  territory  to  an- 
other place  in  the  same  territory,  or  from  any  place  in 
the  United  States.  The  provisions  of  the  act  are  set 
out  in  detail  in  my  former  opinion.  The  act  does  not 
apply  to  the  transportation  of  goods,  or  to  a  service 
performed  wholly  within  a  state ;  nor  is  there  any  pro- 
vision compelling  a  carrier  to  carry  beyond  its  own 
lines.  If  the  lines  of  a  carrier  are  wholly  within  a  par- 
ticular state,  and  goods  are  delivered  to  it  consigned 
to  a  point  beyond  its  own  line,  it  can  only  be  compelled 
to  deliver  to  the  nearest  connecting  line  within  the 
state.  Though  a  carrier  receives  goods  directed  to  a 
point  outside  the  state,  it  is  not  an  interstate  carrier 
where  it  agrees  only  to  carry  over  its  own  line  within 


932 

the  state,  and  there  deliver  to  an  entirely  independent 
connecting  carrier  with  whom  it  has  no  common 
arrangement. 

M.  &  I.  R.  R.  T.  &  S.  Co.  v.  Ry.  Co.,  1  Int.  Com. 

Rep.,  607, 1.  C.  C.,  30. 
Ex  parte  Koehler,  30  Fed.,  867. 
C.  N.  0.  &  T.  R.  R.  Co.  v.  Interstate  Comm. 

Comm.,  162  U.  S.,  184. 

In  Interstate  Commerce  Commission  v.  Hallway  Co., 
77  Fed.,  942,  it  was  held  (syllabus) : 

"A  railroad  company  whose  line  is  wholly  with- 
in a  single  state,  and  which,  although  it  carries 
freight  destined  to  points  beyond  such  state,  never 
issues  bills  of  lading  to  points  beyond  its  own  line, 
receives  no  freight  on  through  bills  of  lading,  and 
has  no  arrangement  with  other  roads  for  a  con- 
ventional division  of  charges,  or  for  a  common  con- 
trol or  management,  is  not  within  the  purview  of 
the  interstate  commerce  act  or  of  the  supplemental 
act  of  August  7,  1888." 

In  United  States  v.  R.  R.  Co.,  81  Fed.,  783,  it  was 
held  (syllabus) : 

"A  railroad  lying  wholly  within  a  state,  which 
transports  freight,  whether  coming  from  within  or 
without  the  state,  solely  on  local  bills  of  lading, 
under  a  special  contract  limited  to  its  own  line,  and 
without  dividing  charges  with  any  other  carriers 
or  assuming  any  other  obligations  to  or  for  them, 
does  not  come  within  the  provisions  of  the  inter- 
state commerce  act,  and  is  not  bound  to  make  any 
report  of  its  business  to  the  interstate  commerce 
commission. ' ' 

And  a  mere  switching  company  which  transfers 
goods  from  one  carrier  to  another  within  the  state, 
entirely  without  reference  to  their  final  destination,  is 
not  engaged  in  interstate  commerce,  even  though  the 
final  destination  of  the  goods  is  without  the  state. 

K.  &  I.  Bridge  Co.  v.  L.  &  N.  R.  Co.,  37  Fed., 

567. 
Interstate  Commerce  Com'n  v.  Indianapolis 

U.  Ry.,  99  Fed.,  472. 
Where,  however,  a  local  carrier  takes  part  in  the 


933 

carriage  of  goods  through  to  destination  in  another 
state,  though  his  share  of  the  carriage  is  entirely  with- 
in the  state,  he  is  engaged  in  interstate  commerce.  The 
same  rule  applies  where  such  carrier  issues  through 
bills  of  lading  or  enters  into  arrangements  with  con- 
necting carriers  for  interstate  transportation. 

In  C.  N.  0.  &  T.  P.  R.  R.  Co.  v.  Interstate  Com. 
Comn.,  162  U.  S.,  184,  the  court  said : 

"When  goods  shipped  under  a  through  bill  of 
lading,  from  a  point  in  one  state  to  a  point  in  an- 
other, are  received  in  transit  by  a  state  common 
carrier,  under  a  conventional  division  of  the 
charges,  such  carrier  must  be  deemed  to  have  sub- 
jected its  road  to  an  arrangement  for  a  continuous 
carriage  or  shipment  within  the  meaning  of  the 
Act  to  Regulate  Commerce." 

Unless,  therefore,  the  local  carrier  issues  a  through 
bill  of  lading  or  holds  itself  out  in  some  way  as  an  in- 
terstate carrier,  it  is  not  subject  to  the  act.  Section 
15  of  the  act  which  empowers  the  Commission  to  estab- 
lish through  routes  and  joint  rates  can,  therefore,  have 
no  application  where  any  one  of  the  carriers,  making 
up  such  through  route,  performs  only  a  local  service 
(and  limits  itself  to  such  service)  wholly  within  a  par- 
ticular state  with  respect  to  such  given  traffic.  In 
other  words,  all  of  the  carriers  making  up  the  through 
route  must  be  subject  to  the  act,  with  respect  to  the 
particular  traffic  moving  over  such  through  route.  If, 
therefore,  the  initial  carrier  performs  services  with 
respect  to  such  traffic  wholly  within  a  particular  state, 
and  does  not  issue  a  through  bill  of  lading  or  hold 
itself  out  as  an  interstate  carrier,  it  cannot  be  com- 
pelled even  under  the  new  Interstate  Commerce  Act, 
to  establish  through  routes  or  joint  rates. 

In  Illinois,  the  acceptance  by  a  carrier  of  freight 
consigned  to  a  point  beyond  the  carrier's  own  line  is, 
in  the  absence  of  a  stipulation  to  the  contrary,  of  the 
same  effect  as  a  through  bill  of  lading. 

The  fact  that  the  initial  carrier  is  engaged  in  inter- 
state commerce  does  not  subject  the  carrier's  local 
business  to  the  jurisdiction  of  the  Commission.  The 


934 

carrier  must  be  engaged  in  interstate  commerce  with 
respect  to  the  particular  traffic.  Thus,  a  railroad 
which  is  engaged  in  interstate  commerce  and  which  in 
addition  performs  a  purely  local  switching  service,  is 
not  subject  to  the  Interstate  Commerce  Act  in  respect 
to  such  local  switching  business.  In  other  words,  the 
Commission  cannot  compel  the  making  of  through 
routes  or  joint  rates  unless  all  of  the  carriers  con- 
cerned are  subject  to  the  act  with  respect  to  the  par- 
ticular traffic.  The  state,  however,  has  the  power,  by 
appropriate  legislation,  to  compel  local  railroad  com- 
panies within  the  borders  to  make  track  connections 
with  each  other,  and  to  afford  facilities  for  the  inter- 
change of  cars  and  traffic  between  their  respective 
lines,  and  perhaps  to  compel  such  carriers  to  make  and 
establish  joint  rates  and  through  rates.  Such  legis- 
lation exists  in  other  states,  and  has  been  upheld  in 
some  particulars  bv  the  United  States  Supreme  Court. 
See: 

Railroad  Co.  v.  Jacobson,  179  U.  S.,  287. 
Railroad  Co.  v.  Minnesota,  186  U.  S.,  257. 
In  this  connection,  I  call  attention,  for  your  informa- 
tion, to  the  Traffic  Circular  of  the  Commission  (3  A), 
Section  8,  which  provides : 

"Terminal  charges  which  must  be  paid  by  all 
shippers  at  destination,  and  which  are,  therefore, 
really  a  part  of  the  cost  of  transportation,  must  be 
specified  in  the  tariff  of  the  initial  line.  Terminal 
charges  which  depend  upon  a  contingency,  like 
demurrage,  storage,  switching,  etc.,  shall  be  filed 
by  the  delivering  line  and  posted  in  the  delivering 
station. 

When  any  switching  or  terminal  charge,  either 
at  the  point  of  origin  or  the  point  of  delivery,  is 
absorbed,  or  when  any  service  is  rendered  and 
the  total  cost  to  the  shipper  from  the  place  where 
the  property  is  first  received  to  the  place  where 
it  is  finally  delivered,  is  thereby  affected,  such 
absorption  or  such  service  shall  be  stated  upon  the 
tariff." 


935 


AS  TO  WHETHER  A  CORPORATION  DOING  A  TRANSFER  BUSI- 
NESS IS  EXEMPTED  FROM  CAPITAL  STOCK  TAXATION  UNDER 
THE  ILLINOIS  ACT  OF  1905  EXEMPTING  CAPITAL  STOCK  OF 
CORPORATIONS  ORGANIZED  FOR  PURELY  MANUFACTURING 
AND  MERCANTILE  PURPOSES  OR  EITHER  OF  SUCH  PUR- 
POSES. 

-"Tia 

(Joseph  Stockton  Company,  November  7,  1906.) 

"Does  the  taxation  of  the  capital  stock  of  a  cor- 
poration doing  a  transfer  business  come  under  the 
exemption  of  the  law  passed  by  the  General  As- 
sembly in  1905,  exempting  the  capital  stock  of 
corporations!" 

The  Act  of  1905  (L.  1905,  p.  353)  exempts  corpora- 
tions organized 

"for  purely  manufacturing  and  mercantile  pur- 
poses, or  for  either  of  such  purposes." 
In  re  Pacific  Coast  Warehouse  'Co.,  123  Fed.,  749,  it 
was  held  that  a  corporation  conducting  a  public  ware- 
house in  which  it  receives  and  stores  grain  and  other 
merchandise  for  hire,  issuing  receipts  therefor,  is  not 
engaged  in  "trading"  or  "mercantile  pursuits."    The 
court,  quoting  from  an  earlier  case,  said: 

"  'The  words  "mercantile  pursuits"  may  have 
a  little  broader  signification  than  "trading." 
"Mercantile"  is  defined  by  the  Century  Diction- 
ary as  "having  to  do  with  trade  or  commerce;  of 
or  pertaining  to  merchants,  or  the  traffic  carried 
on  by  merchants  ;  trading ;  commercial. ' '  It  signi- 
fies, for  the  most  part,  the  same  thing  as  the  word 
"trading";  and  by  "mercantile  pursuits"  is 
meant  the  buying  and  selling  of  goods  or  merchan- 
dise, or  dealing  in  the  purchase  and  sale  of  com- 
modities, and  that,  too,  not  occasionally  or  inci- 
dentally, but  habitually  as  a  business.  N orris  v. 
Com.,  27  Pa.,  494;  Com.  v.  National  Gas  Co.,  32 
Pittsb.  Leg.  J.,  310.'  " 

In  re  Philadelphia  &  Lewes  Transp.  Co.,  114  Fed., 
403,  it  was  held  that  a  carrier  corporation  was  not  en-A 
gaged  in  mercantile  pursuits.  The  court  said : 

"The   bankrupt   moves    to    dismiss,    upon    the 


936 

ground  that  a  corporation  of  this  character  is  not 
'engaged  principally  in  manufacturing,  trading, 
printing,  publishing  or  mercantile  pursuits,'  and 
is  therefore  not  within  the  provisions  of  the  act. 
It  is  apparent  that  the  corporation  cannot  be  em- 
braced within  the  clause  just  quoted,  unless  it  is 
found  to  be  engaged  principally  in  'trading  or 
mercantile  pursuits,'  and  to  this  point  the  argu- 
ment has  been  addressed.  The  construction  of 
these  words 'that  is  contended  for  on  behalf  of 
the  petition  makes  them  equivalent  to  'commerce' 
or  'commercial  pursuits,'  and  would  require  the 
court  to  hold  that  every  other  kind  of  corporation 
engaged  in  commerce  was  also  included  within  the 
act.  The  railroad  and  steamship  lines  of  the  coun- 
try, the  insurance  companies,  the  telephone  and 
telegraph  companies,  the  express  and  transfer 
companies,  and  perhaps  other  corporations  having 
something  to  do  with  the  movement  of  persons  or 
commodities,  would  all  be  embraced  within  the 
words  if  they  should  be  thus  construed.  In  my 
opinion,  this  result  is  sufficient  to  condemn  the 
proposed  construction." 

It  is  apparent  that  the  court  took  it  for  granted  that 
a  transfer  company  was  not  within  the  law. 

And  In  re  Kimball,  1  Fed.,  461,  it  was  held  that  a 
teamster  who  carried  on  a  general  teaming  business 
was  not  a  merchant  or  tradesman  within  the  meaning 
of  the  bankrupt  law. 
See,  also: 

In  re  Quimby  Freight  Forwarding  Co.,  121 

Fed.,  139. 

See,  also,  cited  in  Vol.  5  of  "Words  and  Phrases," 
pp.  4477-4478,  under  title  of  "Mercantile." 

I  am,  therefore,  of  the  opinion  that  a  company  organ- 
ized solely  to  carry  on  a  transfer  business  is  not  organ- 
ized for  purely  mercantile  purposes,  and  the  capital 
stock  of  such  company  is  not  exempt  from  taxation 
under  the  law  above  referred  to.  I  pass  no  opinion 
upon  the  validity  of  the  law  in  question. 


WHETHEK  A  CONSIGNOR  CAN  CONTROL  THE  ROUTING  OF  HIS 
SHIPMENTS  WHEN  THE  CARRIER  REFUSES  TO  ACCEPT 
SHIPMENTS  UNLESS  IT  HAS  THE  RIGHT  TO  ROUTE  SHIP- 
MENTS AS  IT  DESIRES. 

(John  E.  Burns  Lumber  Company,  November  7,  1906.) 
"Will  you  kindly  advise  if  there  has  been  any 
Supreme  Court  decision  on  the  matter  of  the  ship- 
per having  control  of  the  routing  of  any  shipments 
made  by  way  of  railroad  companies!  We  under- 
stand that  one  or  two  of  the  roads  located  in  the 
South  refuse  to  take  loads  unless  the  routing  is 
left  entirely  to  them.  Are  they  within  their 
rights ! ' ' 

In  Southern  Pacific  Company  v.  Interstate  Com- 
merce Commission,  200  U.  S.,  536  (Feb.  22,  1906),  the 
United  States  Supreme  Court  says  (p.  553) : 

"It  is  conceded  that  the  different  railroads 
forming  a  continuous  line  of  road  are  free  to 
adopt  or  refuse  to  adopt  joint  through  tariff  rates. 
The  Commerce  Act  recognizes  such  right  and  pro- 
vides for  the  filing,  with  the  Commission,  of  the 
through  tariff  rates,  as  agreed  upon  between  the 
companies.  The  whole  question  of  joint  through 
rates,  under  the  provisions  of  the  act,  is  one  of 
agreement  between  the  companies,  and  they  may 
or  may  not,  enter  into  it,  as  they  may  think  their 
interests  demand.  And  it  is  equally  plain  that 
an  initial  carrier  may  agree  upon  joint  through 
rates  with  one  or  several  connecting  carriers  who 
between  each  other  might  be  regarded  as  com- 
peting roads. 

"It  is  also  undoubted  that  the  common  carrier 
need  not  contract  to  carry  beyond  its  own  line, 
but  may  there  deliver  to  the  next  succeeding  car- 
rier and  thus  end  its  responsibility,  and  charge 
its  local  rate  for  the  transportation.  If  it  agree 
to  transport  beyond  its  own  line,  it  may  do  so  by 
such  lines  as  it  chooses.  Atchison,  etc.,  R.  R. 
Co.  v.  Denver,  etc.,  R.  R.  Co.,  110  U.  S.,  667; 
Louisville  &  Nashville  R.  R.  Co.  v.  West  Coast 


938 

Naval  Stores,  etc.,  Co.,  198  U.  S.,  483.  This  right 
has  not  been  held  to  depend  upon  whether  the 
original  carrier  agreed  to  be  liable  for  the  default 
of  the  connecting  carrier  after  the  goods  are 
delivered  to  such  connecting  carrier.  As  the  car- 
rier is  not  bound  to  make  a  through  contract,  it 
can  do  so  upon  such  terms  as  it  may  agree  upon, 
at  least  so  long  as  they  are  reasonable  and 
do  not  otherwise  violate  the  law.  In  this  case 
the  initial  carrier  guarantees  the  through  rate, 
but  only  on  condition  that  it  has  the  routings. 
Having  this  right  to  agree  on  a  joint 
through  tariff  on  terms  mutually  satisfactory,  we 
cannot  find  anything  in  the  Commerce  Act  which 
forbids  the  agreement  with  such  a  condition  there- 
in as  to  routing.  It  is  said  that  the  sixth  section, 
properly  construed,  prohibits  such  condition.  We 
confess  our  inability  to  find  anything  in  that  sec- 
tion which  does  so. 

The  fact  that  the  rate,  when  agreed  upon,  must 
be  filed  with  the  Commission  and  made  public  by 
the  common  carriers  when  directed  by  the  Com- 
mission, does  not  prevent  the  adoption  of  an 
agreement  for  a  through  rate  tariff  with  the  con- 
dition as  stated.  Nor  does  the  provision  grant- 
ing power  to  the  Commission  to  prescribe  forms 
of  schedules  of  rates,  as  provided  for  in  the  sixth 
section,  have  any  such  effect.  When  there  is  an 
agreed  through  rate  tariff,  and  as  part  of  such 
agreement,  which  is  joined  in  by  several  rail- 
roads, the  right  to  route  cars  is  reserved  to  the 
initial  carrier,  we  do  not  think  that  the  shipper, 
by  virtue  of  the  sixth  section,  has  the  right  to 
ignore  the  condition  which  is  part  of  the  agree- 
ment under  which  the  through  rate  is  made  and  is 
guaranteed. ' ' 
And  (p.  556) : 

''The  important  facts  that  control  the  situa- 
tion are  that  the  carrier  need  not  agree  to  carry 
beyond  its  own  road,  and  may  agree  upon  joint 
through  tariff  rates  or  not,  as  seems  best  for  its 


939 

own  interests.  Having  these  rights  of  contract 
the  carrier  may  make  such  terms  as  it  pleases,  at 
least  so  long  as  they  are  reasonable  and  do  not 
otherwise  violate  the  law.  We  think  the  routing 
rule  is  not  unreasonable  under  the  facts  herein 
and  that  it  does  not  violate  the  third  section  of 
the  act." 

In  that  case  the  Southern  Pacific  and  other  rail- 
roads published  a  guaranteed  through  rate  on  citrus 
fruits  from  California  to  the  Atlantic  seaboard,  reserv- 
ing the  right  to  route  the  goods  beyond  their  own 
terminals.  One  of  the  conditions  of  the  tariff  was  as 
follows : 

"In  guaranteeing  the  through  rate  named  here- 
in, the  absolute  and  unqualified  right  of  routing 
beyond  its  own  terminal  is  reserved  to  initial  car- 
rier giving  the  guarantee.  In  accordance  with 
this  rule,  agents  will  not  accept  shipping  orders  or 
other  documents,  if  routing  instructions  are  shown 
thereon.  Neither  will  agents  accept  verbal  rout- 
ing instructions." 
Another  rule  reads : 

"  Initial  carrier  will  route  each  car  from  point 
of  origin  to  point  of  destination,  and  diversions 
in  transit  will  not  be  permitted  except  by  con- 
sent of  initial  carrier,  who  will  thereupon  desig- 
nate new  routing  when  diversion  necessitates 
change  therein." 

These  rules  were  held  valid  regulations  and  not  in 
violation  of  the  Interstate  Commerce  Act. 

In  Louisville  &  Nashville  R.  Co.  v.  West  Coast  Naval 
Stores  Company,  198  U.  S.,  483  (May  29,  1905),  it  was 
held  that  a  common  carrier  may  agree  with  such  other 
carrier  as  it  may  choose  to  forward  beyond  its  own 
line  goods  it  has  transported  to  its  terminus. 

In  A.,  T.  &  8.  F.  R.  Co.  v.  D.  &  N.  0.  R.  Co.,  110 
TJ.  S.,  667,  680  (1884),  the  United  States  Supreme 
•Court  said: 

i '  At  common  law,  a  carrier  is  not  bound  to  carry 
except  on  his  own  line,  and  we  think  it  quite  clear 
that  if  he  contracts  to  go  beyond  he  may,  in  the 


940 

absence  of  statutory  regulations  to  the  contrary, 
determine  for  himself  agencies  he  will  employ. 
His  contract  is  equivalent  to  an  extension  of  his 
line  for  the  purposes  of  the  contract,  and  if  he 
holds  himself  out  as  a  carrier  beyond  the  line, 
so  that  he  may  be  required  to  carry  in  that  way 
for  all  alike,  he  may  nevertheless  confine  himself 
in  carrying  to  the  particular  route  he  chooses 
to  use.  He  puts  himself  in  no  worse  position, 
by  extending  his  route  with  the  help  of  others, 
than  he  would  occupy  if  the  means  of  transporta- 
tion employed  were  all  his  own.  He  certainly  may 
select  his  own  agencies  and  his  own  associates  for 
doing  his  own  work." 

The  principle  stated  in  the  above  case  is  in  sub- 
stance recognized  in  Gulf,  etc.,  R.  Co.  v.  Miami  S.  S. 
Co.,  86  Fed.,  407,  and  in  Little  Rock,  etc.,  Ry.  Co.  v. 
St.  Louis,  etc.,  Ry.  Co.,  63  Fed.,  775. 

In  Post  v.  Southern  R.  Co.,  103  Tenn.,  184,  52  S.  W. 
301  (1899),  a  bill  was  filed  by  several  firms  of  cot- 
ton shippers  against  the  Southern  By.  Co.  to  com- 
pel it  by  mandatory  injunction  to  issue  its  bills  of 
lading  for  cotton  tendered  it  by  complainants  for 
transportation  to  New  P^ngland  points,  with  the  rout- 
ing or  lines  of  connecting  carriers  selected  by  com- 
plainants inserted  therein.  It  was  alleged  that  the 
Southern  E.  E.  Co.  had  in  effect  a  joint  tariff  in  con- 
nection with,  among  other  railroads,  the  Pennsyl- 
vania Eailroad  and  the  New  York,  New  Haven  &  Hart- 
ford Eailroad,  forming  a  continuous  line  from  the 
City  of  Memphis  to  Fall  Eiver,  Mass.  Bills  of  lad- 
ing containing  this  routing  were  refused  by  the  South- 
ern E.  Co.  The  Southern  Eailroad  reserved  the  right 
to  issue  bills  of  lading  for  shipments  of  cotton  from 
Memphis  over  connecting  lines,  according  to  its  own 
routing. 

The  court  said: 

"When  no  special  instructions  are  given  and 
assented  to  as  to  routes,  the  initial  carrier  may 
select  the  route  or  use  that  commonly  employed 
by  it  to  the  point  of  destination  named,  and  the 


941 

absence  of  special  instructions  given  and  acceded 
to  amounts  to  an  assent  that  the  carrier's  usual 
course  of  business  may  be  followed,  and  it  may 
designate  the  route  as  its  convenience  may  sug- 
gest. Snow  v.  Indiana,  B.  &  W.  R.  Co.,  109  Ind., 
425,  9,  N.  E.,  702 ;  Frank  v.  Memphis  &  C.  R.  Co., 
52  Miss.,  570 ;  Southern  Kansas  R.  Co.  v.  Duncan, 
40  Kan.,  503,  20  Pac.,  195 ;  Hostetter  v.  Baltimore 
&  0.  R.  Co.  (Pa.),  11  Atl.  609;  Le  Sage  v.  Great 
Western  R.  Co.,  1  Daly,  306;  Ray,  Negligence  of 
Imposed  Duties,  Freight  Carriers,  sees.  97,  318, 
393,  668,  669.  But  when  goods  are  tendered  for 
shipment  to  a  point  beyond  the  carrier's  line,  and 
there  are  two  or  more  routes  equally  safe,  prompt, 
and  reliable,  the  carrier  cannot  be  compelled  to 
accept  goods  to  be  carried  over  one  route  in  pref- 
erence to  another,  at  the  option  of  the  shipper, 
unless  some  reason  appears  therefor;  and  espe- 
cially is  this  so  when  the  carrier  shows  that  in 
the  conduct  of  its  business  the  use  of  one  route 
may  be  advantageous  to  it  without  injury  or  sac- 
rifice to  the  interests  of  the  shipper.  In  order  that 
the  shipper  may  have  the  right  to  dictate  the 
route  under  such  circumstances,  he  must  show 
some  legitimate  advantage  or  some  detriment  to 
himself  in  the  selection  of  one  route  over  another, 
and,  in  the  absence  of  such  showing,  he  is  not 
entitled  to  dictate  the  route  against  the  wishes  of 
the  carrier,  and  especially  is  this  the  case  when 
the  carrier  shows  that  such  designation  will  oper- 
ate to  its  prejudice  and  injury." 

And  held: 

''Upon  a  consideration  of  the  whole  case,  we  are 
of  the  opinion  the  complainants  are  not  entitled, 
under  the  facts  in  this  record,  to  designate  the 
route  of  their  shipments  over  the  objection  of 
the  carrier,  and  they  are  not  entitled  to  the  injunc- 
tion prayed  as  to  the  t\venty-four  bales,  or  as  to 
other  and  future  shipments." 

In  Lowe  v.  Seaboard  Air  Line  R.  R.  Co.,  63  S.  C., 
248,  41  S.  E.,  297  (1902),  a  statute  of  the  State  of  South 


942 

Carolina,  providing  that  a  common  carrier  shall  pay 
a  penalty  of  $500  for  shipping  freight  by  a  route  other 
than  that  designated  by  the  shipper,  was  held  uncon- 
stitutional when  applied  to  goods  shipped  to  or  from 
another  state,  as  in  violation  of  the  Interstate  Com- 
merce clause  of  the  Federal  Constitution. 

I  am  of  the  opinion,  therefore,  that  a  carrier  may 
lawfully  stipulate  as  a  condition  of  issuing  through 
bills  of  lading  to  destination  over  connecting  lines 
that  it  shall  have  the  right  to  route  the  goods  in  its 
discretion,  provided  no  extra  charge  is  thereby  im- 
posed upon  the  shipper.  A  carrier  at  common  law 
is  not  liable  to  carry  beyond  its  own  line,  and  if  it 
does  it  may  limit  its  liability.  If  the  carrier,  accord- 
ing to  its  rules,  refuses  to  accept  the  routing  desig- 
nated by  the  shipper  over  connecting  lines,  it  can  be 
compelled  to  deliver  the  goods  to  the  designated  con- 
necting line,  but  in  that  event  it  cannot  be  forced  to 
issue  a  through  bill  of  lading  over  the  connecting  line 
to  destination. 

The  Interstate  Commerce  Act,  as  amended  by  the 
Hepburn  Railroad  Bate  Act  of  1906,  contains  the  fol- 
lowing provision  (Sec.  20) : 

"That  any  common  carrier,  railroad,  or  trans- 
portation company  receiving  property  for  trans- 
portation from  a  point  in  one  state  to  a  point  in 
another  state  shall  issue  a  receipt  or  bill  of  lad- 
ing therefor  and  shall  be  liable  to  the  lawful 
holder  thereof  for  any  loss,  damage  or  injury  to 
such  property  caused  by  it  or  by  any  common 
carrier,  railroad  or  transportation  company  to 
which  such  property  may  be  delivered  or  over 
whose  line  or  lines  such  property  may  pass,  and 
no  contracts,  receipt,  rule  or  regulation  shall 
exempt  such  common  carrier,  railroad,  or  trans- 
portation company  from  the  liability  hereby  im- 
posed ;  Provided,  That  nothing  in  this  section  shall 
deprive  any  holder  of  such  receipt  or  bill  of  lading 
of  any  remedy  or  right  of  action  which  he  has 
under  existing  law." 
I  am  of  the  opinion,  however,  in  view  of  the  decision 


943 

in  *S'o.  Pac.  R.  Co.  v.  Interstate  Commerce  Commission, 
200  U.  S.,  536  (above  quoted),  that  this  provision  has 
no  effect  upon  the  right  of  the  carrier  to  route  ship- 
ments. In  this  connection  it  may  be  noted  that  section 
6  of  the  Interstate  Commerce  Act  as  amended  in  1906 
provides  that  in  certain  cases  the  commission  may 
establish  through  routes,  provided  no  reasonable  or 
satisfactory  through  route  exists. 


WHETHER  A  RAILROAD  COMPANY  IS  RESPONSIBLE  FOR  DELIV- 
ERING A  SHIPMENT  WHEN  INSTRUCTIONS  HAVE  BEEN 
GIVEN  BY  THE  CONSIGNOR  NOT  TO  DELIVER  TO  THE  CON- 
SIGNEE. 

Moloney-Bennett  Belting  Co.,  November  7,  1906.) 

"We  received  a  telegram  from  a  concern  in 
Texas  asking  us  to  make  them  a  shipment  of  double 
belting  amounting  to  several  hundred  dollars.  We 
got  the  order  out  all  right  and  shipped  it  promptly. 

Within  a  day  or  so  we  received  a  letter  from 
them,  in  which  they  stated  that  the  order  was  for 
special  light  double  belt,  which  was  only  one-half 
the  weight  and  value  of  the  shipment  we  had  made 
them  on  their  telegraph  order.  We  immediately 
took  the  matter  up  with  the  railroad  company  and 
asked  them  to  not  deliver  the  first  shipment  sent, 
but  to  return  it  to  us.  WTe  then  made  the  second 
shipment. 

We  took  the  matter  up  with  the  railroad  com- 
pany several  times  and  we  had  every  reason  to 
believe  that  they  would  stop  the  first  shipment" 
or  at  least  not  deliver  it  when  it  reached  its  des- 
tination as  on  previous  occasions  we  had  asked 
them  to  return  shipments  and  they  did  so. 

We  heard  nothing  definite  from  them  until  we 
finally  received  a  notice  that  they  had  delivered 
our  first  shipment  to  consignee  and  the  second 
shipment  was  there  awaiting  our  orders ;  that  is, 
they  had  delivered  to  consignee  the  shipment  of 
heavy  double  belting  which  was  worth  twice  the 
value  of  the  second  shipment  of  light  weight  goods. 


944 

What  we  wish  to  know  is,  can  we  not  hold  the 
railroad  company  responsible  for  our  loss  on  the 
shipment!  The  people  to  whom  the  goods  were 
consigned  took  the  heavy  goods  and  paid  only  the 
price  of  the  light  weight,  as  they  had  ordered. 

Please  advise  us  through  your  attorney  if  the 
railroad  company  is  not  liable  for  the  difference 
between  the  value  of  the  heavy  and  light  weight 
belting,  since  they  delivered  the  shipment  contrary 
to  our  orders." 

In  Lester  v.  Delaware,  etc.,  R.  R.  Co.,  36  N.  Y.  Supp., 
907,  goods  originally  shipped  from  Boston  were  in  the 
possession  of  the  defendant's  freight  agent  at  Nor- 
wich, New  York,  when  word  was  received  from  the 
plaintiff  not  to  deliver  the  goods  except  on  his  written 
order.  Despite  the  notification,  the  agent  delivered  the 
goods  to  the  consignees,  who  were  holders  of  the  bill 
of  lading.  The  court  said : 

' '  The  agent  at  Norwich  seems  to  have  acted  on 
the  theory  that  the  bill  of  lading  was  conclusive 
as  to  the  right  of  Williams  &  O'Donnell  to  receive 
the  goods,  although  they  then  Had  notice  of  the 
claim  of  the  plaintiff.  It  is  not  claimed  by  the 
defendant  that  this  position  is  tenable,  nor  is  it 
apparent  that  there  was  any  delay  or  laches  on 
the  part  of  the  plaintiff  that  could  affect  the 
ground  or  reason  on  which  the  plaintiff  acted.  It 
is  conceded  that  the  plaintiff  was  the  owner  of  the 
goods  and  he  was  entitled  to  the  possession  if  the 
contract  between  him  and  O'Donnell  was  termi- 
nated. The  plaintiff  in  that  case  had  the  right  to 
treat  the  delivery  as  worngful,  and  if  so,  it 
amounted  to  a  conversion,  and  no  further  demand 
was  necessary." 

In  Allen  v.  Maine  Central  R.  R.  Co.,  79  Me.,  327,  the 
defendant  attempted  to  justify  the  delivery  of  the 
goods  after  notice  to  stop,  on  the  ground  that  the  notice 
should  have  contained  a  reason  for  stopping.  The 
court,  in  discussing  this  question,  said : 

"The  plaintiffs  seasonably  telegraphed  and 
wrote  the  proper  officer  of  the  defendant  com- 
pany (the  carrier)  to  stop  and  return  the  goods. 


945 

The  defendants  contend  the  notice  was  insufficient 
because  there  was  no  statement  of  the  nature  or 
basis  of  the  claim.  While  such  a  claim  is  probably 
usual,  it  does  not  seem  necessary  in  this  case.  The 
carrier  is  presumed  to  know  the  law  and  by  such 
notice  as  was  given  here  is  as  effectually  apprised 
of  a  claim  adverse  to  the  consignee  as  well  as  of  a 
claim  upon  himself.  In  Benj.  on  Sales,  1276,  while 
it  is  said  the  usual  mode  is  a  simple  notice  to  the 
carrier  stating  the  vendor's  claim,  etc.,  it  is  also 
stated  that,  all  that  is  required  is  some  act  or  dec- 
laration of  the  vendor  countermanding  the  deliv- 
ery. Brewer,  J.,  in  Rucker  v.  Donovan,  19  Am.  E., 
84,  said  a  notice  to  the  carrier  to  stop  the  goods 
is  sufficient.  No  particular  form  of  notice  is 
required." 

In  Louisville  &  N.  N.  R.  Co.  v.  Hartwell,  et  al.,  99 
Ky.,  436,  after  goods  had  been  delivered  to  the  carrier 
and  were  en  route,  the  shipper  notified  the  carrier  not 
to  deliver  to  consignee  except  on  certain  conditions. 
Notwithstanding  this  order,  the  carrier  delivered  un- 
conditionally. The  court  said: 

"So  when  the  shipper  gives  notice  after  they 
have  been  received  by  the  carrier  for  transpor- 
tation and  before  they  are  delivered  to  the  con- 
signee that  he  is  not  to  deliver  them  to  the  con- 
signee, he  must  take  notice  that  the  consignor 
intends  to  retain  control  of  their  ultimate  disposi- 
tion. After  such  notice,  the  presumption  no  longer 
obtains  that  the  consignee  is  the  owner  of  the 
goods." 

In  Lewis  v.  Galena,  etc.,  R.  R.  Co.,  40  111.,  281,  the 

goods  were  consigned  to  one  party  and  while  en  route 

the  consignor  sold  them  to  another  party,  and  directed 

the  defendant  railroad  company  to  deliver  them  to 

another  party.    Notwithstanding  this,  the  goods  were 

handed  over  to  the  original  consignee.    The  court  said : 

"The  principle  may  be  broadly  stated  that  a 

consignor  of  goods  has  the  right  to  direct  a  change 

in  their  destination  and  the  carrier  is  bound  to 

obey  such  directions   *   *   *  if  not,  and  a  loss  hap- 


946 

pens  by  reason  of  disobedience,  the  carrier  must 
make  it  good." 
See  also: 

The  Michigan  Southern,  etc.,  I.  R.  R.  Co.  v. 

Day,  20  111.,  375. 
Strahorn  v.  Union  Stock  Yards,  etc.,  Co.,  43 

111.,  424. 
Jellet  v.  St.  Paul,  etc.,  R.  R.  Co.,  30  Minn., 

365. 
McSwegan,  et  al.,  v.  Pennsylvania  R.  Co.,  40 

N.  Y.  Supp.,  51. 

The  rule  ordinarily  is  that  goods  while  in  transit  are 
subject  to  the  orders  of  the  consignor.  If  the  latter 
desired  the  carrier  to  refrain  from  delivering  the 
goods,  a  mere  notice  to  that  effect  is  sufficient.  If  after 
the  carrier  is  notified,  he  delivers,  he  does  so  at  his 
peril  and  upon  proof  that  the  shipper  was  entitled  to 
possession,  is  liable  as  for  a  conversion.  In  the  pres- 
ent case  (the  rights  of  no  third  party  having  inter- 
vened), the  carrier  should  have  held  the  goods  imme 
diately  upon  notification  by  the  consignor.  As  this 
was  not  done,  the  carrier  is  liable  for  the  value  of  the 
heavy  belting,  less  the  amount  paid  by  the  consignee 
on  account  of  the  purchase  price. 

Lester  v.  Del.  &  W.  R.  Co.,  36  N.  Y.  S.,  907. 


THE  FOREIGN  CORPORATION  LAW  OF  NORTH  DAKOTA  AND  THE 
NECESSITY   OF    COMPLIANCE    THEREWITH. 

(O.  W.  Richardson  &  Co.,  November  7,  1906.) 

"We  enclose  circular  from  a  firm  of  attorneys 
at  Devil's  Lake,  N.  D.    As  we  understand  it,  the 
law  referred  to  applies  only  to  foreign  corpora- 
tions having  a  branch  office  in  the  state  and  not  to 
corporations  doing  an  interstate  business." 
The  circular  referred  to  is  from  a  firm  of  attorneys, 
and  is  as  follows: 

"Before  foreign  corporations  can  legally  trans- 
act business  in  this  state,  they  must  comply  with 
the  state's  law's  with  reference  to  foreign  corpora- 
tions. The  rule  heretofore  announced  bv  the  Su- 


947 

preme  Court  of  this  state  in  the  cases  of  Wash- 
burn  Mill  Co.  v.  Bartlett,  3  N.  D.,  138;  Loan  Asso- 
ciation v.  Shane,  8  N.  D.,  136 ;  National  Cash  Reg- 
ister Co.  v.  Wilson,  9  N.  D.,  112,  and  Lumber  Co. 
v.  Children  of  Israel,  1  N.  D.,  46,  to  the  effect  that 
actions  could  be  maintained  without  complying 
with  the  law,  has  been  recently  overruled  in  the 
case  of  Hart-Parr  Co.  v.  Robb-Lawrence  Co.,  106 
N.  W.,  406.  In  this  last  named  case  the  Supreme 
Court  holds  that  a  foreign  corporation  must  com- 
ply with  the  laws  here  before  it  can  transact  busi- 
ness in  the  state. 

The  expense  of  complying  with  the  law  is  small, 
and  all  foreign  corporations  should  do  so  before 
transacting  business  here.  If  interested,  write 
us  for  particulars,  and  probable  expense  of  com- 
pliance." 
The  Foreign  Corporation  Law  of  North  Dakota  is 

as  follows  (Revised  Code  of  North  Dakota,  1905,  Sees. 

4695-4699) : 

''SEC.  4695.  Foreign  Corporations  Can  Do 
Business  in  This  State,  When. — No  foreign  cor- 
poration, association  or  joint  stock  company,  ex- 
cept an  insurance  company,  shall  transact  any 
business  within  this  state,  or  acquire,  hold  or  dis- 
pose of  property,  real  or  personal,  within  this 
state,  until  such  corporation  shall  have  filed  in  the 
office  of  the  secretary  of  state  a  duly  authenticated 
copy  of  its  charter  or  articles  of  incorporation, 
and  shall  have  complied  with  the  provisions  of 
this  chapter,  provided  that  the  provisions  of  this 
chapter  shall  not  apply  to  corporations  created  for 
religious  or  charitable  purposes  solely  nor  to  the 
holding  and  disposing  of  such  real  estate  as  may 
be  required  only  by  foreclosure  or  otherwise,  in 
liquidation  of  mortgages  or  other  securities  by 
corporations  which  may  not  have  complied  with 
the  provisions  of  this  article.  (Civ.  C.,  1877,  Sec. 
567;  B.  C.,  1895;  Sec.  3261;  1905,  Ch.  68.) 

SEC.  4696.  Record. — Such  charter  or  articles  of 
incorporation  shall  be  recorded  in  a  book  to  be 


948 

kept  by  the  secretary  of  state  for  that  purpose. 
(Civ.  C.,  1877,  Sec.  568;  R.  C.,  1899,  Sec.  3262.) 

SEC.  4697.  Appoint  Secretary  of  State  Attorney 
for  Service. — Such  corporation,  association  or 
joint  stock  company  shall  by  a  duly  executed  in- 
strument filed  in  the  office  of  the  secretary  of  state 
constitute  and  appoint  the  secretary  of  state  and 
his  successors  its  true  and  lawful  attorney  upon 
whom  all  process  in  any  action  or  proceeding 
against  it  may  be  served,  and  therein  shall  agree 
that  any  process  which  may  be  served  upon  its 
said  attorney  shall  be  of  the  same  force  and 
validity  as  if  served  upon  it  personally  in  this 
state  and  that  such  appointment  shall  continue  in 
force  irrevocable  so  long  as  any  liability  of  the 
corporation,  association  or  joint  stock  company 
remains  outstanding  in  this  state.  Service  upoii 
such  attorney  shall  be  deemed  sufficient  service 
upon  the  corporation,  association  or  joint  stock 
company.  Whenever  process  against  any  foreign 
corporation,  association  or  joint  stock  company, do- 
ing business  in  this  state,  shall  be  served  upon  the 
secretary  of  state,  he  shall  forthwith  mail  a  copy 
of  such  process,  postage  prepaid,  and  directed  to 
such  corporation,  association  or  joint  stock  com- 
pany at  its  principal  place  of  business,  or  if  it  is  a 
corporation,  association  or  joint  stock  company  of 
a  foreign  country,  to  its  resident  manager  in  the 
United  States,  or  to  such  other  person  as  may 
have  been  previously  designated  by  it  by  written 
notice  filed  in  the  office  of  the  secretary  of  state. 
As  a  condition  of  valid  and  effectual  service  the 
plaintiff  shall  pay  to  the  secretary  of  state  at  the 
time  of  the  service  the  sum  of  two  dollars,  which 
the  plaintiff  shall  recover  as  taxable  costs  if  he 
prevails  in  his  action.  The  secretary  of  state 
shall  keep  a  record  of  all  such  process  which  shall 
show  the  time  and  hour  of  service.  (Civ.  D., 
1877,  Sec.  560;  1885,  Ch.  36,  Sec.  1;  E.  C.,  1895, 
Sec.  3263.) 

SEC.  4698.  Liability  of  Officers,  Etc.,  for  Fail- 
ure to  Comply. — Any  failure  to  comply  with  the 


949 

provisions  of  the  last  three  sections  and  with  sec- 
tion 3116  of  this  code  shall  render  each  and  every 
officer,  agent  or  stockholder  of  any  corporation, 
association  or  joint  stock  company  failing  to  com- 
ply therewith,  jointly  and  severally  liable  on  any 
and  all  contracts  of  such  corporation,  association 
or  joint  stock  company  made  within  this  state  dur- 
ing the  time  such  corporation,  association  or  joint 
stock  companv  is  so  in  default.  (1890,  Ch.  193, 
Sec.  1;  R.  C",  1895,  Sec.  3264.) 

SEC.  4699.  Failure  to  Comply  Renders  All  Con- 
tracts Void. — Every  contract  made  by  or  on  be- 
half of  any  corporation,  association  or  joint  stock 
company,  doing  business  in  this  state,  without  first 
having  complied  with  the  provisions  of  section 
4463,  if  an  insurance  company,  or  with  the  pro- 
visions of  section  4695  and  4697,  if  other  than  an 
insurance  company,  shall  be  wholly  void  on  behalf 
of  such  corporation,  association  or  joint  stock 
company  and  its  assigns,  but  any  contract  so  made 
in  violation  of  the  provisions  of  this  section  may 
be  enforced  against  such  corporation,  association 
or  joint  stock  company.  (R.  C.,  1895,  Sec.  3265.)" 
Section  136  of  the  Constitution  of  North  Dakota 
provides : 

"No  foreign  corporation  shall  do  business  in 

this  state  without  having  one  or  more  places  of 

business  and  an  authorized  agent  or  agents  in  the 

same,  upon  whom  process  may  be  served. ' ' 

The  case  of  State,  for  use  of  Hart-Parr  Co.  v.  Robb- 

Lawrence  Co.,  106  N.  W..  406  (N.  D.,  Jan.  2,  1906), 

holds  merely  that  a  single  isolated  transaction  does 

not  constitute  "doing  business"  within  the  state  so  as 

to  require  the  corporation  to  comply  with  the  foreign 

corporation  laws.    The  court  said: 

"The  object  of  laws  of  this  character  is  to  re- 
quire foreign  corporations  which  undertake  to 
carry  on  their  business  generally  in  this  state  to 
establish  a  domicile  or  situs  here  so  that  they 
shall,  like  domestic  corporations,  be  within  reach 
of  the  process  of  our  courts.  The  term  'transact- 
ing or  doing  business'  as  used  in  laws  of  this  char- 


950 

acter,  implies  continuity,  and  does  not  mean  a  sin- 
gle isolated  transaction  done  within  the  borders  of 
the  state  without  any  purpose  of  engaging  gener- 
ally in  the  carrying  on  of  its  business  here." 
The  court  does  not  overrule  its  former  decisions, 
but  merely  says  with  reference  to  them : 

"The  transactions  involved  in  Washburn  Mill 
Co.  v.  Bartlett,  3N.  D.,  138,  54  N.  W.,  544;  Lumber 
Co.  v.  Children  of  Israel,  7  N.  D.,  46,  73  N.  W., 
203,  and  Loan  Co.  v.  Shain,  8  N.  D.,  136,  77  N.  W., 
1006,  all  took  place  before  section  3265  was  en; 
acted.  In  the  case  of  National  Cash  Register  Co. 
v.  Wilson,  9  N.  D.,  112,  81  .N.  W.,  285,  section  3265, 
if  applicable  to  the  transaction  involved,  was  ap- 
parently not  noticed." 

The  North  Dakota  law  is  applicable  only  to  corpora- 
tions ' '  doing  business ' '  within  the  state.  What  consti- 
tutes i '  doing  business ' '  has  been  covered  by  numerous 
opinions  heretofore  rendered  by  me.  It  is  well  settled 
that  such  statutes  are  not  applicable  to  corporations 
doing  only  an  interstate  commerce  business.  The  right 
of  the  state  to  prescribe  the  conditions  upon  which 
foreign  corporations  may  carry  on  business  within 
the  state  is  undisputed  and  stands  approved  by  the 
courts.  When,  however,  such  regulation  imposes  con- 
ditions which  restrict  them  in  their  rights,  as  foreign 
corporations,  to  make  contracts  pertaining  to  foreign 
commerce  between  the  states,  then  such  legislation  is 
an  invasion  of  their  constitutional  right  under  the  pro- 
vision which  confers  upon  Congress  the  power  to  regu- 
late such  commerce,  and  such  legislation  is  invalid  to 
that  extent.  (Sponge  Co.  v.  Richardson  Drug  Co. 
(Wis.),  102  N.  W.,  888.)  It  does  not  appear  that  the 
North  Dakota  courts  have  yet  had  to  pass  upon  any 
transaction  of  interstate  commerce  under  the  foreign 
corporation  law. 

Thus,  when  a  corporation  of  one  state,  by  its  agents, 
sells  goods  in  another  state,  to  be  shipped  from  the 
first  state,  it  is  engaged  in  interstate  commerce;  and 
if  an  agent  of  a  foreign  corporation  which  has  not  com- 
plied with  the  law  signs  a  contract,  which  is  not  to  be 


951 

binding  until  approved  at  the  home  office,  a  statute  of 
the  state  where  the  contract  is  signed  which  purports 
to  make  it  invalid,  is  void  as  a  restraint  on  interstate 
commerce. 

Cooper  v.  Ferguson,  113  U.  S.,  727. 
Caldivell  v.  North  Carolina,  187  U.  S.,  622. 
Holder  v.  Aultman,  169  U.  S.,  81. 
And  in  Beale  on  Foreign  Corporations,  Sec.  207,  the 
general  rule  is  stated  as  follows : 

* i  When  the  business  is  consummated  outside  the 
state,  even  though  a  part  of  the  transaction  takes 
place  within  the  state,  the  corporation  does  not  do 
business  in  the  state.     Thus  where  a  foreign  cor- 
poration solicits  orders  in  the  state  by  commer- 
cial travelers,  the  orders  being  transmitted  to  the 
corporation  at  its  domicile  and  there  filled,  the  sale 
is  made  and  business  is  therefore  done  at  the  domi- 
cile of  the  corporation.     The  foreign  corporation 
in  such  case  is  not  doing  business  in  the  state." 
If  the  method  of  " doing  business"  in  North  Dakota 
is  such  as  to  be  insterstate  commerce,  or  is  a  single 
isolated   transaction,  then   the   law   of  Nortli  Dakota 
need  not  be  complied  with.    If,  however,  the  corpora- 
tion is  actually  "doing  business"  (within  the  meaning 
of  that  term)  in  the  state,  compliance  with  the  law  is 
advised. 


WHETHER    BOAT    TRANSPORTATION     LINES    ARE    SUBJECT    TO 
THE  INTERSTATE  COMMERCE  ACT. 

(Standard  Varnish  Works,  November  7,  1906.) 

"According  to  your  interpretation  of  the  Inter- 
state Commerce  Law,  do  the  same  rules  apply  to 
boat  transportation  lines  as  to  railroads  on  Inter- 
state shipments  by  freight!  The  special  case  in 
point  is  whether  a  cut  rate  by  a  boat  line  between 
Chicago  and  Milwaukee  is  an  infringement  of  the 
Interstate  Commerce  Law." 

The  Interstate  Commerce  Act,  as  amended  in  1906, 
provides  (Sec.  1) : 

"That  the  provisions  of  this  act  shall  apply  to 


952 

any  corporation  or  any  person  or  persons  engaged 
in  the  transportation  of  oil  or  other  commodity, 
except  water  and  except  natural  or  artificial  gas 
by  means  of  pipe  lines  or  partly  by  pipe  lines  and 
partly  by  railroad,  or  partly  by  pipe  lines  and 
partly  by  water,  who  shall  be  considered  and  held 
to  be  common  carriers  within  the  meaning  and 
purposes  of  this  act,  and  to  any  common  carrier  or 
carriers  engaged  in  the  transportation  of  passen- 
gers or  property  wholly  by  railroad  (or  partly  by 
railroad  and  partly  by  water  when  both  are  used 
under  a  common  control,  management,  or  arrange- 
ment for  a  continuous  carriage  of  shipment],  from 
one  state  or  territory  of  the  United  States,  or  the 
District  of  Columbia,  to  any  other  state  or  terri- 
tory of  the  United  States,  or  the  District  of  Colum- 
bia, or  from  one  place  in  a  territory  to  another 
place  in  the  same  territory,  or  from  any  place  in 
the  United  States  to  an  adjacent  foreign  country, 
or  from  any  place  in  the  United  States  through  a 
foreign  country  to  any  other  place  in  the  United 
States,  and  also  to  the  transportation  in  like  man- 
ner of  property  shipped  from  any  place  in  the 
United  States  to  a  foreign  country  and  carried 
from  such  place  to  a  port  of  trans-shipment,  or 
shipped  from  a  foreign  country  to  any  place  in  the 
United  States  and  carried  to  such  place  from  a 
port  of  entry  either  in  the  United  States  or  an 
adjacent  foreign  country:  Provided,  however, 
That  the  provisions  of  this  act  shall  not  apply  to 
the  transportation  of  passengers  or  property,  or 
to  the  receiving,  delivering,  storage,  or  handling 
of  property  wholly  within  one  state  and  not 
shipped  to  or  from  a  foreign  country  from  or  to 
any  state  or  territory  as  aforesaid." 
I  am  of  the  opinion  that  the  provisions  of  the  act  do 
not  apply  to  boat  lines  solely  engaged  in  transporta- 
tion by  water  from  Chicago  to  Milwaukee,  and  not 
operated  as  a  portion  of  a  through  route  of  carriage 
partly  by  railroad  and  partly  by  water.  The  provision 
of  the  amended  act  in  this  respect  is  not  changed.  Thus 
the  act  prior  to  amendment  in  1906  provided  (Sec.  1)  : 


953 

"That  the  provisions  of  this  act  shall  apply  to 
any  common  carrier  or  carriers  engaged  in  the 
transportation  of  passengers  or  property  wholly 
by  railroad,  or  partly  by  railroad  and  partly  by 
ivater  when  both  are  used,  under  a  common  con- 
trol, management,  or  arrangement,  for  a  continu- 
ous carriage  or  shipment,"  etc. 

The  United  States  Supreme  Court  in  the  Import 
Rate  Case  considered  ocean  carriers  not  subject  to 
the  act.  T.  &  D.  Ry.  Co.  v.  Interstate  Commerce  Com- 
mission, 162  U.  S.,  197.  And  the  Interstate  Commerce 
Commission  held  that  independent  water  lines  were 
not  within  the  provisions  of  the  act. 

Capehart  &  Smith  v.  L.  &  N.  Co.,  4  I.  C.  C., 

265. 

Cut  rates  made  by  such  boat  lines  not  operated  as 
a  part  of  through  route  partly  by  railroad  and  partly 
bv  water  are  not  therefore  in  violation  of  the  act. 


WHETHER    A   CARRIER   CAN    BE   COMPELLED    TO    REDEEM   THE 
UNUSED    PORTION    OF    A    LOST    MILEAGE    TICKET. 

(F.  H.  Earle  Mfg.  Co.,  November  7,  1906.) 

"We  enclose  herewith  letter  from  the  Western 
Passenger  Association.  Wish  you  would  send  this 
to  Mr.  Mayer,  and  ask  his  advice  on  such  matters 
as  this,  or  advise  us  what  you  know  about  it  and 
let  us  hear  from  you. ' ' 
The  letter  referred  to  is  as  follows: 

"We  are  in  receipt  of  your  favor  of  August 
15th  advising  of  the  loss  of  mileage  ticket  form 
B,  No.  160608,  purchased  for  Mr.  J.  H.  Bradley. 

We  will  make  the  usual  notation  on  our  records 
and  should  the  ticket  be  found  by  any  person  and 
forwarded  to  this  office,  you  will  be  promptly  no- 
tified. 

Paragraph  eight  of  the  conditions  of  this  form 
of  transportation  reads  as  follows : 

'If  this  ticket  is  lost,  mislaid  or  stolen,  it  can 
not  be  replaced,  nor  any  refund  be  made  on  such 


954 

account,  neither  will  notification  of  its  loss  be  given 
to  conductors.' 

We  can  only  trust  that  the  ticket  may  subse- 
quently come  into  your  possession." 
Section  5  of  the  Illinois  Act  of  April  19,1875  (Kurd's 
Rev.  Stat,  of  1905,  p.  1585),  provides: 

"That  it  shall  be  the  duty  of  the  owner  or  own- 
ers of  railroads  or  steamboats,  by  their  agents  or 
managers,  to  provide  for  the  redemption  of  the 
whole,  or  any  parts  or  coupons  of  any  ticket  or 
tickets,  as  they  may  have  sold,  as  the  purchaser, 
for  any  reason,  has  not  used,  and  does  not  desire 
to  use,  at  a  rate  which  shall  be  equal  to  the  differ- 
ence between  the  price  paid  for  the  whole  ticket 
and  the  cost  of  a  ticket  between  the  points  for 
which  the  proportion  of  said  ticket  was  actually 
used;  and  the  sale  by  any  person  of  the  unused 
portion  of  any  ticket  otherwise  than  by  the  pre- 
sentation of  the  same  for  redemption  as  pro- 
vided for  in  this  section  shall  be  deemed  to  be  a 
violation  of  the  provisions  of  this  act;  and  shall 
be  punished  as  is  hereinbefore  provided :  Provided, 
that  this  act  shall  not  prohibit  any  person  who 
has  purchased  a  ticket  from  any  agent  authorized 
by  this  act,  with  the  bona  fide  intention  of  travel- 
ing upon  the  same,  from  selling  any  part  of  the 
same  to  any  other  person." 

Under  this  section,  the  holder  of  an  unused  mile- 
age ticket  can  recover  the  difference  between  the  price 
paid  for  the  whole  ticket  and  the  value  of  the  transpor- 
tation used,  estimated  at  the  regular  rate. 

A  different  question  is  presented  where  the  ticket 
is  lost,  mislaid  or  stolen.  In  the  discussion  of  this 
question,  I  assume  that  the  mileage  ticket  referred  to 
.was  issued  to  a  particular  person  and  was  non-trans- 
ferable. 

In  Maas  v.  Scharbach,  34  N.  Y.  S.,  234,  the  plaintiff 
purchased  a  ticket  with  the  understanding  that  the 
money  should  be  refunded  if  the  ticket  was  not  used 
within  a  year.  At  the  end  of  the  year  suit  was  insti- 
tuted. The  court  said: 


955 

"The  appellant  urges  that  plaintiff  should  not 
be  allowed  to  recover  back  the  purchase  price 
without  a  return  of  the  thing  sold,  but  this  con- 
tention assumes  the  ticket  itself  to  have  been  the 
subject  of  the  sale,  whereas  the  ticket  was  but  a 
token  furnishing  the  evidence  of  a  right  to  demand 
transportation  (25  Am.  &  Eng.  Enc.  Law,  pp. 
1074,  1075,  and  cases  cited) ;  and,  from  the  plain- 
tiff's evidence,  it  is  logically  inferable  that  this 
token  was  of  no  value  after  the  elapse  of  one  year 
from  the  sale." 

In  C.  &  A.  R.  R.  Co.  v.  Dumser,  161  111.,  190,  the 
court,  in  discussing  the  nature  of  a  ticket,  said  (p. 
194): 

"Ordinarily  a  ticket  is  not  a  contract,  but  is  a 
means  adopted  for  convenience  to  enable  the  per- 
sons in  charge  of  trains  to  recognize  the  holder  as 
entitled  to  passage,  and  to  be  taken  up  by  the 
conductor  or  ticket  collector  as  his  voucher.  (Bur- 
dick  v.  People,  148  111.,  600.)  In  American  and 
English  Encyclopedia  of  Law  (vol.  25,  p.  174), 
the  lawr  on  this  subject  is  stated  as  follows:  'The 
settled  opinion  is,  that  a  passage  ticket,  in  the 
ordinary  form,  is  merely  a  voucher,  token  or  re- 
ceipt adopted  for  convenience,  to  show  that  the 
passenger  has  paid  his  fare  from  one  place  to 
another,  and  does  not  constitute  the  contract  of 
carriage,  although  it  often  does  have  upon  it  some 
condition  or  limitation  which  enters  into  and 
forms  a  part  of  the  contract.  Accordingly,  it  is 
admissible  to  prove  by  parol  evidence  the  terms 
of  the  contract  in  fact  entered  into  between  the 
carrier  and  the  passenger.' 

In  Pullman  Palace  Car  Co.  v.  Reed,  75  111.,  125,  it 
was  held  that  where  the  holder  of  a  Pullman  car  ticket 
loses  the  same,  but  furnishes  satisfactory  evidence 
that  he  had  purchased  such  a  ticket,  the  conductor  was 
not  justified  in  refusing  him  his  berth,  and  he  could 
recover  back  the  price  of  the  ticket  and  damages  for 
the  inconvenience  suffered. 

In  Vol.  19  Am.  Eng.  Enc.  Law  (2d  ed.),  556,  in  dis- 


956 

cussing  the  right  to  recover  on  lost  instruments,  it  is 
said  (p.  556) : 

''The  plaintiff  is  not  generally  required  to  fur- 
nish indemnity  where  the  defendant  will  not  be 
liable  to  be  called  on  to  pay  a  second  time.  Thus 
a  recovery  may  be  had  on  a  lost  note,  which  being 
payable  to  order,  has  not  been  negotiated,  or 
which,  having  been  negotiated,  has  been  specially 
indorsed  to  the  plaintiff,  to  whom  it  is  exclusively 
payable;  for  in  such  cases  no  title  to  the  instru- 
ment can  pass  from  the  finder  to  a  bona  fide 
holder." 

In  McMillan  v.  Bethold,  35  111.,  250,  suit  was  brought 
to  recover  on  a  lost  note.  It  was  held  (syllabus) : 

"The  note  not  being  indorsed,  the  defendant 
was  in  no  danger  of  being  required  to  pay  it 
again;  but  had  it  been  adapted  to  circulation  by 
an  indorsement,  then,  it  seems,  that  absolute  proof 
might  be  required  that  the  note  was  actually  lost 
or  destroyed." 

In  the  present  case  the  railroad  could  suffer  no  loss, 
inasmuch  as  the  ticket  was  not  valid  in  the  hands  of 
any  other  person  than  the  person  to  whom  it  was  orig- 
inally issued.  The  ticket  was  non-transferable,  and 
passed  no  title  to  the  finder.  The  railroad  company 
could  issue  a  letter  of  instructions  to  its  agents  not  to 
honor  the  ticket  if  presented,  and  if  it  failed  to  do  so, 
the  loss,  if  any,  must  fall  upon  it. 

Reference  is  made,  however,  to  paragraph  8  of  the 
ticket,  which  provides  that 

"If  this  ticket  is  lost,  mislaid  or  stolen,  it  can 
not  be  replaced  nor  any  refund  be  made  on  such 
account,  neither  will  notification  of  its  loss  be 
given  to  conductors." 

Aside  from  the  express  provision  of  the  statute  at  or 
before  the  time  of  the  purchase  of  the  ticket,  if  the 
purchaser  of  the  ticket  had  notice  of  the  condition, 
he  would  be  bound  by  it  and  no  recovery  could  be  had, 
or,  if  the  condition  was  contained  in  the  ticket  or  in 
any  other  document,  over  the  signature  of  the  pur- 
chaser, he  would  be  bound  by  it ;  but,  if  the  condition 
was  printed  on  the  back  of  the  ticket,  and  the  pur- 


957 

chaser  did  not  see  or  know  of  it,  it  would  not  be  bind- 
ing on  him,  and  a  recovery  could  be  had.  Such  is  the 
rule  in  the  absence  of  the  statute ;  but  in  my  opinion, 
under  the  first  section  of  the  statute,  if  the  ticket  was 
made  out  to  a  particular  person,  recovery  can  be  had 
under  the  circumstances  hereinbefore  stated. 


THE  RIGHT  OF  A  RAILROAD  WHEN  A  RATE  IS  INCORRECTLY 
QUOTED  TO  CHARGE  THE  CORRECT  RATE  BEFORE  DELIVERY 
OF  THE  GOODS. 

(Illinois  Glass  Company,  November  7,  1906.) 

"In  January,  1901,  this  company  was  figuring 
on  purchasing  several  million  feet  of  lumber.  Be- 
fore placing  the  contract  we  asked  a  representa- 
tive of  one  of  the  railroad  lines  entering  this  city 
to  secure  for  us  the  correct  rate  of  freight.  He  in 
turn  took  the  matter  up  with  a  certain  line  over 
which  the  lumber  would  have  to  move  and  asked 
that  line  to  'name  the  very  best  rate  you  can  on 
the  entire  consignment.'  The  reply,  which  is  over 
the  signature  of  the  general  freight  agent  of  the 
line  beyond,  and  is  under  date  of  January  10, 
1901,  acknowledges  receipt  of  this  letter  and 
quotes  a  certain  rate  from  B.  to  East  St.  Louis. 
The  representative  of  the  delivering  line  here 
adds  the  rate  from  East  St.  Louis  to  Alton  and 
quotes  us  a  through  rate  from  point  of  shipment 
to  this  city.  On  a  basis  of  the  rate  quoted  the 
contract  was  placed  and  the  shipments  began  to 
move.  Later,  under  date  of  March  1,  1901,  we 
were  advised  by  the  general  freight  agent  of  the 
line  quoting  from  B.  to  East  St.  Louis  that  his 
letter  of  January  10  was  in  error ;  that  there  was 
no  through  rate  published  on  lumber  from  B. ; 
that  the  only  rates  that  his  lines  carried  applied 
only  from  C.  to  East  St.  Louis ;  that  the  through 
rate  from  B.,  therefore,  would  be  3  cents  per  hun- 
dredweight higher  than  that  originally  quoted, 
and  asked  that  his  letter  be  corrected  accordingly. 
At  that  time  the  contract  for  the  lumber  had 


958 

been  made,  some  of  it  had  been  received,  other 
cars  were  in  transit  and  there  were  still  others  to 
be  loaded,  and  we  at  once  notified  the  representa- 
tives of  the  delivering  line  of  the  conditions  and 
the  fact  that  the  contract  had  been  made  based 
on  the  rate  quoted,  and  that  we  should  expect 
protection  of  that  rate.  We  at  first  declined  to 
pay  the  advanced  rate.  Later  we  paid  the  freight 
and  tried  to  secure  protection  of  the  rate  quoted 
and  tipon  which  the  contract  was  based  by  enter- 
ing claim.  Our  claim,  amounting  to  almost  $3,000, 
was  declined  and  we  were  advised  by  the  road 
which  quoted  the  rate  from  B.  to  East  St.  Louis 
that  they  would  pay  the  claim  under  no  consider- 
ation unless  compelled  to  do  so  after  due  legal 
process. 

Will  you  kindly  secure  from  Mr.  Levy  Mayer 
an  opinion  in  regard  to  what  recourse  we  have? 
If  under  the  law  we  are  unable  to  compel  protec- 
tion of  the  rate  quoted,  whether  or  not  the  proper 
course  would  be  a  suit  for  damages  under  the  com- 
mon law.  Would  the  fact  that  over  five  years 
have  elapsed  since  the  quotation  was  made  in  any 
way  affect  a  damage  suit!" 

The  Interstate  Commerce  Act  (Sec.  6),  prior  to  its 
amendment  in  1906,  provided  that  when  any  carrier, 
subject  to  the  Act,  shall  have  established  and  pub- 
lished its  rates,  fares  and  charges  in  compliance  with 
the  Act,  it  shall  be  unlawful  for  such  common  carrier 
to  demand,  collect  or  receive  from  any  person  a  greater 
or  less  compensation  than  is  specified  in  such  pub- 
lished schedule  of  rates,  etc.,  at  that  time  in  force. 
And  under  the  Elkins  Act,  prior  to  its  amendment  in 
1906,  it  is  unlawful  to  give  or  accept  any  discrimina- 
tion whereby  any  property  should  be  transported  at 
a  less  rate  than  that  named  in  the  tariffs  published 
and  filed  by  such  carrier ;  and  the  Elkins  Act  also  pro- 
vided that  when  any  carrier  published  a  particular 
rate,  such  rate  should  be  conclusively  presumed  to 
be  the  legal  rate,  and  any  departure  therefrom  should 
be  unlawful.  Section  2  of  the  Interstate  Commerce 


959 

Act  also  forbids  any  carrier  collecting  a  greater  or 
less  compensation  for  transportation  than  it  collects 
or  receives  from  any  other  person  for  a  like  and  con- 
temporaneous service. 

In  Texas  &  Pacific  Railway  Co.  v.  Mugg,  202  U.  S., 
242  (May  14,  1906),  it  appeared  that  the  T.  &  P.  Ry. 
Co.  had  made  and  quoted  to  Mugg  a  rate  of  $1.25 
per  ton  on  two  cars  of  coal  and  $1.50  per  ton  on  one 
car  of  coal  in  January  and  February,  1903,  from  Coal 
Hill,  Ark.,  to  Weatherford,  Texas,  on  which  rates 
Mugg  relied  in  contracting  the  coal  shipped  and  sold 
at  prices  based  on  these  rates ;  but  the  T.  &  P.  Ry. 
Co.  collected  of  Mugg  freight  at  the  rate  of  $2.75  per 
ton  on  two  cars,  and  $2.85  per  ton  on  one  car  before 
it  would  deliver  the  shipment.  This  rate  collected  was 
the  regular  rate  in  effect  shown  by  the  published  sched- 
ules of  the  T.  &  P.  Ry.  Co.  on  file  with  the  Interstate 
Commerce  Commission.  An  action  for  damages  and 
to  recover  the  excess  of  the  rate  collected  over  the 
rate  quoted  was  instituted  by  Mugg.  The  Supreme 
Court  held  that 

"One  who  has  obtained  from  a  common  carrier 
transportation  of  goods  from  one  State  to  another 
at  a  rate  specified  in  the  bill  of  lading  less  than 
the  published  schedule  rates  filed  with  and  ap- 
proved by  the  Interstate  Commerce  Commission, 
and  in  force  at  the  time,  whether  or  not  he  knew 
that  the  rate  obtained  was  less  than  the  schedule 
rate,  is  not  entitled  to  recover  the  goods,  or  dam- 
ages for  their  detention,  upon  the  tender  of  pay- 
ment of  the  amount  of  charges  named  in  the  bill 
of  lading,  or  of  any  sum  less  than  the  schedule 
charges;  in  other  words,  that  whatever  may  be 
the  rate  agreed  upon,  the  carrier's  lien  on  the 
goods  is,  by  force  of  the  Act  of  Congress,  for  the 
amount  fixed  by  the  published  schedule  of  rates 
and  charges,  and  this  lien  can  be  discharged,  and 
the  consignee  can  become  entitled  to  the  goods 
only  by  the  payment,  or  tender  of  payment,  of 
such  amount." 
There  are  many  cases  to  the  same  effect,  where 


960 

shippers  who  obtained  by  honest  mistake  on  the  part 
of  railroad  agents  an  agreement  for  carriage  at  less 
than  schedule  rates  have  been  held  without  remedy 
when  the  carrier  refused  to  abide  by  the  contract  and 
insisted  on  the  full  tariff  rates. 

Gulf,  etc.,  R.  Co.  v.  Hefley,  158  U.  S.,  98. 

So.  Ey.  Co.  v.  Harrison,  119  Ala.,  546.  24  So., 

552 ;  43  L.  R.  A.,  385. 

So.  R.  Co.  v.  Wilcox,  99  Va.,  394,  39  S.  E.,  144. 
Chicago  R.  Co.  v.  Hubbell,  54  Kan.,  232,  38 

Pac.  266. 
Mo.  R.  "Co',  v.  Bowles  (Ind.  Ter.),  40  S.  W., 

899. 
San  Antonio  R.  Co.  v.  Clements,  20  Tex.,  Civ. 

App.,  498,  49  S.  W.  913. 
Mo.  R.  Co.  v.  Stoner,  5  Tex.,  Civ.  App.,  50,  23 

S.  W.,  1020. 
Bullard  v.  N.  P.  R.  Co.,  10  Mont.,  168,  25  Pac., 

120,  11  L.  R.  A.,  246. 
St.  L.  R.  Co.  v.  Ostrander,  66  Ark.,  567,  52 

S.  W.,  435. 
Church  v.  R.  R.  Co.,  14  S.  D.,  443,  85  N.  W., 

1001. 

R.  R.  Co.  v.  Bundick,  94  Ga.,  775,  21  S.  E.,  995. 
The  interests  of  the  many  in  having  carriers  re- 
quired to  observe  the  provisions  of  the  Interstate  Com- 
merce Act  far  outweigh  the  interests  of  the  few  who 
make  contracts  with  carriers  which  cannot  be  per- 
formed without  violating  the  act. 

In  Atlanta,  Etc.,  Ry.  Co.  v.  Home,  106  Tenn.,  73, 
59  S.  W.,  134  (1900),  it  was  held  that  in  the  absence 
of  proof  of  publication  of  rates  by  the  carrier  as  re- 
quired by  the  Interstate  Commerce  Act,  the  consignee 
was  entitled  to  obtain  possession  of  goods  transported 
by  connecting  carriers,  on  tender  of  the  freight  stip- 
ulated in  the  bill  of  lading,  though  it  is  less  than  the 
rate  approved  by  the  Interstate  Commerce  Commis- 
sion. 

In  Southern  Ry.  Co.  v.  Wilcox,  99  Va.,  394,  39  S.  E., 
144  (1901),  it  was  held  that  the  illegality  of  a  contract 
for  the  interstate  shipment  of  freight  at  a  less  rate 


961 

than  that  specified  in  the  printed  schedules  of  rates, 
which  is  prohibited  by  the  Interstate  Commerce  Act, 
prevents  the  recovery  by  the  shipper  for  a  breach 
thereof. 

I  am  of  the  opinion,  therefore,  assuming  that  the 
shipment  was  interstate,  and  that  the  higher  rate  was 
legally  published  and  filed  with  the  Commission,  as 
part  of  the  "Schedule"  of  rates,  that  the  carrier  could 
not  be  compelled  to  refund  the  excess  collected  over 
the  rate  quoted.  The  legal  rate  is  the  rate  stated  in 
the  schedules  filed  with  the  Interstate  Commerce  Com- 
mission. There  are  also  other  possible  objections 
which  need  not  be  discussed. 

The  Interstate  Commerce  Act,  as  amended  in  1906, 
now  provides  (Sec.  6): 

"No  carrier,  unless  otherwise  provided  by  this 
Act,  shall  engage  or  participate  in  the  transpor- 
tation of  passengers  or  property,  as  defined  in 
this  Act,  unless  the  rates,  fares  and  charges  upon 
which  the  same  are  transported  by  said  carrier 
have  been  filed  and  published  in  accordance  with 
the  provisions  of  this  Act;  nor  shall  any  carrier 
charge  or  demand  or  collect  or  receive  a  greater 
or  less  or  different  compensation  for  such  trans- 
portation of  passengers  or  property,  or  for  any 
service  in  connection  therewith,  between  the  points 
named  in  such  tariffs,  than  the  rates,  fares  and 
charges  which  are  specified  in  the  tariff  filed  and 
in  effect  at  the  time ;  nor  shall  any  carrier  refund 
or  remit  in  any  manner  or  by  any  device  any 
portion  of  the  rates,  fares  and  charges  so  speci- 
fied, nor  extend  to  any  shipper  or  person  any 
privileges  or  facilities  in  the  transportation  of 
passengers  or  property,  except  such  as  are  speci- 
fied in  such  tariffs ;  Provided,  That  wherever  the 
word  'carrier'  occurs  in  this  Act  it  shall  be  held 
to  mean  'common  carrier.' 

Being  of  the  opinion  that  the  carriers  cannot  be  held 
liable,  the  question  of  the  statute  of  limitation  of  five 
years  barring  an  action  is  not  considered.  If,  how- 
ever, the  shipments  were  intrastate  and  wholly  within 


962 

the  State  of  Illinois,  a  different  question  might  arise. 
The  Supreme  Court  of  this  State,  in  /.  C.  R.  R.  Co.v. 

Seitz,  214  111.,  350,  355   (1905),  has  taken  a  position 

which  is  clearly  contrary  to  the  weight  of  authority, 

saying : 

"Conceding,  for  the  sake  of  argument,  that 
making  a  rate  lower  than  the  ordinary  rate  would 
be  an  unlawful  discrimination  as  to  the  party 
favored  within  the  purview  of  the  statute  referred 
to,  we  still  think  appellant's  position  untenable. 
If  a  common  carrier  makes  an  unlawful  discrimi- 
nation in  favor  of  a  shipper  by  contracting  to 
carry  his  goods  at  a  lower  rate  than  they  should 
bear,  and  accepts  the  goods  and  carries  them  at 
that  rate,  it  cannot,  after  the  goods  have  reached 
their  destination,  charge  against  them  an  addi- 
tional amount  of  freight  sufficient  to  bring  the 
total  charge  up  to  the  proper  rate.  To  do  so  would 
permit  the  carrier  to  make  a  rate  lower  than  it 
properly  should  make,  to  secure  the  business,  and 
thereafter  take  advantage  of  its  own  wrong  to 
increase  the  charge  and  secure  the  usual  com- 
pensation." 
But  on  any  interstate  shipment  the  decision  of  the 

United  States  Supreme  Court  in  T.  &  P.  Ry.  Co.  v. 

Mugg,  202  U.  S.,  242,  above  quoted,  is  conclusive. 

NOTE: — See,  also,  an  opinion  supplementary  to  the  above  opinion, 
dated  May  31,  1907,  and  opinion  of  November  26,  1907  (O.  F.  Bell) 
as  to  when  a  rate  is  legally  in  force  and  as  to  the  liability  of  a  carrier 
for  a  misquoted  rate,  and  see,  also,  the  case  of  Hanrigan  v.  C.  $•  N. 
W.  A'.tf.  (jo.,  113  N.  W.,  983  (Neb.,  Nov.  21,  1907).— Ed. 


963 


F.  O.  B.  SHIPMENTS  AND  WHO  IS  EESPONSIBLE  FOE  THE 
GOODS  IN  TRANSIT  ;  AND  IN  EEFEEENCE  TO  THE  LIABILITY 
OF  A  CORPOEATION  ON  NOTES  AND  ACCEPTANCES  ISSUED 
IN  THE  NAME  OF  THE  COEPOEATION  BY  OFFICEES  NOT 
AUTHORIZED  TO  EXECUTE  NOTES  AND  ACCEPTANCES. 

(Walworth  &  Neville  Mfg.  Co.,  November  7,  1906.) 
"We  shall  be  glad  to  know  what  is  the  opinion 
of  the  attorney  of  the  association  on  the  two  fol- 
lowing matters : 

We  sell  a  part  of  our  product  at  a  given  price 
'f.  o.  b.  St.  Louis,'  our  office  being  in  Chicago  and 
the  mill  being  in  still  another  State.  The  terms 
of  payment  on  our  account  are  net  sixty  days 
from  shipment,  and  the  customer  pays  the  freight 
and  deducts  it  from  the  invoice.  One  of  our  cus- 
tomers claims  that  this  method  of  selling  makes 
us. responsible  for  the  goods  during  transit.  Our 
understanding  is  that  the  title  passes  at  the  time 
of  the  delivery  of  the  goods  to  the  transportation 
company,  properly  addressed  to  our  customer. 
Which  is  correct? 

Under  our  organization,  notes  or  acceptances 
of  the  company  can  be  given  only  by  specified  offi- 
cers. The  question  has  arisen  as  to  whether  or 
not  we  would  be  liable  for,  and  therefore  com- 
pelled to  pay,  a  note  or  acceptance  issued  in  the 
name  of  the  company  by  an  officer  not  so  author- 
ized. We  assume  that  if  the  material  purchased 
is  delivered  to  and  accepted  by  us,  we  must  pay 
for  it,  but  what  would  be  the  situation  if  this  were 
not  the  case?" 

In  my  opinions  of  October  24, 1903,  for  the  American 
Steel  &  Wire  Co. ;  of  March  19,  1904,  for  S.  A.  Max- 
well Co. ;  of  July  12,  1905,  for  The  Chicago  Varnish 
Co.,  and  of  July  20,  1906,  for  Spielman  Bros.,  I  dis- 
cussed f.  o.  b.  contracts  involving  similar  questions, 
and  to  these  opinions  I  refer. 

Where  the  point  specified  for  delivery  f.  o.  b.  is  an 
intermediate  point  between  the  point  of  shipment  and 
the  final  point  of  destination,  the  delivery  to  the  car- 


rier  at  the  initial  point  of  shipment  does  not  operate 
to  pass  the  title  in  the  goods  to  the  vendee,  but  the 
vendor  still  retains  the  title  and  the  risk  of  transpor- 
tation to  the  intermediate  point  named  in  the  contract. 
Copehart  v.  Furtnan  Farm  Improvement  Co., 

103  Ala.,  671,  16  So.,  627. 
Heinberg  Bros.  v.  Cannon,  36  Fla.,  601,  18 

So.,  714. 
Dannemiller  v.  Kirkpatrick,  201  Pa.,  218,  50 

Atl.,  928. 
Schreyer  v.  Kimball  Lumber  Co.,  54  Fed.,  653, 

4C.  C.A.,  547. 

I  am  of  the  opinion  that  the  terms  of  payment  stated 
do  not  affect  the  question  of  risk  during  transit,  and 
that  under  the  term  "F.  O.  B.  St.  Louis,"  the  risk 
of  transportation  is  upon  the  Walworth  &  Neville  Co. 
from  the  initial  point  of  shipment  to  St.  Louis ;  and 
from  St.  Louis  to  destination  the  risk  is  upon  the 
vendee.  I  recommend,  however,  that  the  terms  of  sale 
should  read  "Delivery  F.  0.  B.  St.  Louis." 

(2)  It  is  difficult  to  lay  down  definite  rules  as  to 
when  a  corporation  is  and  when  it  is  not  bound  by  a 
contract  which  apparently  has  been  regularly  executed 
by  the  corporation  through  its  proper  officers.  The 
tendency  is  to  hold  the  corporation  liable,  inasmuch  as 
it  selects  its  own  officers,  and  should  be  to  a  certain 
extent  responsible  for  their  acts  in  signing  the  corpo- 
rate name  to  contracts.  A  by-law  requiring  that  con- 
tracts be  made  only  by  certain  officers,  or  that  certain 
formalities  be  observed,  is  of  little  avail  as  against 
outside  parties.  Persons  contracting  with  a  corpora- 
tion are  not  bound  to  know  of  the  by-law,  and  the 
courts  are  reluctant  to  invalidate  a  contract  by  reason 
of  it. 

2  Cook  on  Corporations  (5th  Ed.),  Sec.  725. 
In  National  Loan  &  Investment  Co.  v.  Rockland  Co., 
94  Fed.,  335  (1899),  it  is  said: 

"A  private  trading  corporation  has  the  implied 
power  to  issue  promissory  notes.  The  signatures 
of  its  officers  thereon  are  presumptive  evidence  of 
their  authority  to  make  negotiable  paper  on  its 


965 

behalf.  The  acts  of  the  officers  of  corporations, 
within  the  scope  of  their  powers,  are  prima  facie 
evidence  of  the  acts  requisite  to  give  them  the 
necessary  authority.  One  who  purchases  the  notes 
of  a  corporation  may  rely  upon  the  presumption 
that  its  officers  have  discharged  their  duty,  and 
have  not  exceeded  their  authority  in  executing 
them,  and  the  law  will  not  deprive  him  of  this 
presumption  when  he  presents  them  to  the 
courts." 

In  Merchants'  Bank  v.  State  Bank,  10  Wall.,  604, 
644  (1870),  the  United  States  Supreme  Court  said: 

"Where  a  party  deals  with  a  corporation  in 
good  faith — the  transaction  is  not  ultra  vires— 
and  he  is  unaware  of  any  defect  of  authority  or 
other  irregularity  on  the  part  of  those  acting  for 
the  corporation,  and  there  is  nothing  to  excite  sus- 
picion of  such  defect  or  irregularity,  the  corpora- 
tion is  bound  by  the  contract,  although  such  defect 
or  irregularity  exists." 

The  rule  is  stated  in  2  Cook  on  Corporations  (5th 
Ed.),  Sec.  725: 

"A  limitation  by  by-law  that  no  corporate  lia- 
bility shall  be  incurred  unless  expressly  author- 
ized by  the  directors  does  not  invalidate  corporate 
contracts  made  by  agents  acting  within  the  appa- 
rent scope  of  agency." 

In  Martin  v.  Niagara  Co.,  122  N.  Y.,  165  (1890),  it 
was  held  that  a  by-law  requiring  the  signature  of  the 
secretary  to  notes  issued  by  the  corporation  does  not 
bind  a  person  taking  a  note  without  actual  knowledge 
of  the  by-law,  especially  where  it  has  been  in  long 
disuse. 

In  Produce  &  C.  Co.  v.  Bierbach,  176  Mass.,  577 
(1900),  it  was  held  that  even  though  the  by-laws  re- 
quire the  president  and  treasurer  to  sign  notes,  yet  if 
the  president  and  secretary  have  been  accustomed  to 
sign  such  notes,  the  notes  so  signed  are  valid  and  may 
be  enforced 

So  in  First  Nat.  Bank  v.  Eureka  &  C.  Co.,  123  N.  C., 
24  (1898),  it  was  held  that  a  corporation  which  in- 


966 

dorses  a  note  and  obtains  the  money  thereon  cannot 
defend  against  the  indorsement  on  the  ground  that  it 
was  not  made  strictly  in  accordance  with  its  by-laws. 

I  am  of  the  opinion  that  if  the  notes  or  acceptances 
are  issued  by  officers  who  have  apparent  authority  to 
do  so,  the  corporation  will  be  bound  thereon  in  the 
hands  of  a  bona  fide  holder,  even  though  the  by-laws 
prescribe  that  such  notes  or  acceptances  can  be  given 
only  by  another  officer,  and  even  though  the  material 
for  which  the  notes  or  acceptances  are  given  is  not 
delivered  to  the  corporation.  I  am  not  informed  as 
to  what  officer  executed  the  notes  without  authority. 
The  law  of  many  states  is  at  variance  as  to  what  offi- 
cers of  a  corporation  have  implied  power  to  issue  or 
indorse  negotiable  paper  so  as  to  bring  their  action 
within  ' '  the  apparent  scope  of  their  agency. ' ' 

But  in  Illinois  it  is  held  that  the  president  and  sec- 
retary of  a  corporation  have  by  virtue  of  their  offices 
power  to  execute  promissory  notes  of  the  corporation. 
Matson  v.  Alley,  141  111.,  284. 
Fisk  v.  Carbonized  Stone  Co.,  67  111.  App., 

327. 

Snyder  Bros.  v.  Bailey,  165  111.,  447. 
Anderson  Transfer  Co.  v.  Fuller,  174  111.,  221. 
So  in  Massachusetts  it  is  held  that  the  treasurer  has 
implied  power  to  indorse  negotiable  paper  in  Mer- 
chants Bank  v.  Citizens'  Gas  Light  Co.,  159  Mass.,  505, 
the  court  saying: 

"Upon  consideration  of  the  decisions  cited,  we 
think  it  fair  to  say  that  the  making  and  indors- 
ing of  negotiable  paper  is  to  be  presumed  to  be 
within  the  power  of  the  treasurer  of  a  manufac- 
turing and  trading  corporation,  whenever,  from 
the  nature  of  its  ordinary  business  as  usually 
conducted,  the  corporation  is  naturally  to  be  ex- 
pected to  use  its  credit  in  carrying  on  commer- 
cial transactions.  Such  paper  is  the  usual  and 
ordinary  instrument  of  utilizing  credit  in  com- 
mercial dealings,  and  it  is  for  the  interest  of  the 
corporation  and  of  the  community  that  the  best 
instrument  should  be  employed.  It  is  not  less  for 


967 

the  interest  of  all  that,  if  negotiable  paper  is  to 
be  employed,  its  validity  should  not  be  open  to 
objections  which  would  impair  its  usefulness  by 
requiring  at  every  step  an  inquiry  into  the  author- 
ity by  which  it  is  issued. ' ' 

In  many  states,  however,  the  president,  secretary  or 
treasurer  are  not  recognized  as  having  implied  power 
to  indorse  commercial  paper  on  behalf  of  the  corpo- 
ration. 

2  Cook  on  Corporations  (5th  Ed.),  Sees.  712- 

720. 

In  any  event,  it  is  largely  a  question  of  fact  as  to 
whether  the  corporation  will  be  bound.  If  by  long 
custom  and  practice  or  by  recognition  and  ratification 
of  other  like  notes  or  acceptances,  the  officer  has  been 
held  out  as  having  power  to  do  the  acts  in  question,  the 
corporation  will  be  bound.  In  the  absence  of  any  infor- 
mation as  to  what  officer  executed  the  notes,  I  cannot 
definitely  state  whether  it  was  within  the  apparent 
scope  of  his  agency  so  as  to  bind  the  corporation  in  the 
hands  of  a  bona  fide  holder. 


WHETHER  IT  IS  UNLAWFUL  TO  USE  THE  COMBINATION  OP 
TWO  LOCAL  BATES,  WHEN  THE  THROUGH  RATE  IS  GREATER 
THAN  THE  COMBINATION  OF  THE  LOCAL  RATES  ;  AND  AS 
TO  WHETHER,  AFTER  A  CARLOAD  OF  FREIGHT  CONSIGNED 
FROM  ONE  STATE  TO  A  POINT  IN  ANOTHER  STATE  ARRIVES 
AT  ITS  ORIGINAL  DESTINATION  AND  IS  RECONSIGNED  TO 
ANOTHER  POINT  IN  THE  SAME  STATE,  THE  LATTER  MOVE- 
MENT IS  INTERSTATE  COMMERCE  AND  SUBJECT  TO  THE 
I N  TERSTATE  COMMERCE  ACT. 

(Block  Pollak  Iron  Company,  November  10.  1906.) 

"A.  carload  of  freight  consigned  from  one  state 
to  a  point  in  another  state,  after  arriving  at  origi- 
nal point  of  destination,  is  reconsigned  to  another 
point  within  the  same  state.  Could  this  latter 
movement  be  construed  interstate  commerce  from 
the  fact  that  the  car  originated  outside  of  the 
state?  For  example,  in  the  year  1905,  we  had  a 


968 

rate  of  freight  on  scrap  iron  in  carloads  between 
Chicago  and  East  St.  Louis.  Some  of  the  ship- 
ments originated  outside  of  the  State  of  Illinois. 
After  arriving  at  Chicago  they  were  reconsigned 
to  East  St.  Louis,  or  vice  versa.  On  account  of 
the  shipments  originating  outside  of  the  State  of 
Illinois,  one  of  the  railroads  refused  to  pay  our 
claim  based  on  the  above  rate,  because  they  say 
that  this  is  interstate  commerce  business  and  is 
therefore  unlawful. 

And,  also,  the  following  question:  Is  it  unlaw- 
ful to  use  the  combination  of  two  locals  when  the 
same  is  cheaper  than  a  through  rate!  This  is  on 
interstate  commerce.  The  attorneys  for  some  of 
the  roads  maintain  that  it  is  lawful,  and  some 
maintain  that  it  is  not. ' ' 


In  Porter  v.  St.  Louis  S.  W.  Ry.  Co.,  95  S.  W.,  453 
(Ark.)  (March  17,  1906),  it  appears  that  Porter  pur- 
chased at  Erin,  Tenn.,  on  the  L.  &.  N.  R.  R.  a  carload 
of  lime  to  be  transported  to  Suttgart,  Ark.,  on  the 
St.  L.,  S.  W.  By.  Co.  The  through  rate  was  22  cents 
per  hundredweight,  while  the  through  rate  from  Erin, 
Tenn.,  to  Brinkley,  Ark.,  was  14  cents,  and  the  local 
rate  from  Brinkley  to  Stuttgart,  fixed  by  the  Arkansas 
Railroad  Commission,  was  5  cents.  The  lime  was 
shipped  by  the  combination  of  the  twTo  local  rates. 
Upon  the  arrival  of  the  car  of  lime  at  Brinkley,  Porter, 
without  unloading  or  opening  the  car,  paid  the  freight 
from  Erin  to  that  point  and  reshipped  it  over  the  St. 
L.  S.  W.  Ry.  Co.  to  himself  at  Stuttgart.  When  the 
car  arrived  at  Stuttgart,  Porter  tendered  to  the  rail- 
road agent  5  cents  per  hundredweight  upon  the  con- 
signment, which  the  agent  refused  to  accept  and  de- 
manded payment  of  12i/>  cents  per  hundredweight, 
which  would  have  been  the  pro  rata  of  a  through  rate. 

The  question  presented  to  the  court  was  whether 
Porter  had  the  right  to  take  advantage  of  the  situa- 
tion, viz. :  the  interstate  rate  from  Erin  to  Brinkley 
and  the  railroad  commission  rate  from  Brinklev  to 


969 

Stuttgart,  in  order  to  secure  a  rate  through  to  the  lat- 
ter place  at  less  than  the  interstate  rate  fixed  between 
the  two  points. 

The  court  held  that  was  an  interstate  commerce 
shipment  and  that  the  benefit  of  the  local  state  rate 
could  not  thus  be  obtained,  saying : 

"The  question  we  are  dealing  with  here  is 
whether  the  state  commission  rate  can  be  de- 
manded and  enforced  in  favor  of  the  shipper  on  a 
consignment  which  was,  in  fact,  intended  to  be  a 
continuous  interstate  shipment,  but  which  has 
been  interrupted  inside  of  the  state  for  the  sole 
purpose  of  evading  the  interstate  rate.  We  say 
that  it  cannot  be  done.  The  consignment  is  an 
interstate  transaction,  and  continues  to  be  such 
until  the  final  destination  is  reached." 
The  shipper  was  held  liable  for  the  amount  of  the 
rate  at  22  cents  per  hundred. 

In  Cutting  v.  Florida  Ry.  &  Nav.  Co.,  46  Fed.,  641 
(1891),  it  appears  that  in  1888  certain  orange  growers 
in  Florida,  in  shipping  their  fruit  from  points  within 
the  state,  desined  to  northern  and  western  cities, 
would  ship  from  one  point  to  another  point  in  Flor- 
ida, consigned  to  their  agent  at  the  latter  point,  for 
reshipment,  who  immediately  forwarded  them  to  their 
destination  in  another  state.  The  Florida  Railway 
Commission  had  established  exceedingly  low  rates  on 
citrus  fruits  within  the  state,  and  the  resultant  combi- 
nation of  the  domestic  rate  with  the  interstate  rate  was 
a  much  lower  rate  than  the  through  interstate  rate 
from  the  point  of  shipment. 

It  was  in  order  to  take  advantage  of  this  situation 
that  the  method  of  reconsigning  shipments  was 
adopted.  The  Florida  Railway  and  Navigation  Com- 
pany refused  to  recognize  the  rates  established  by  the 
railway  commission,  and  the  shippers  in  routing  their 
cars  paid  the  freight  charges  under  protest. 
The  court  said: 

"After  December  1st,  1888,  in  pursuance  of 
an  arrangement  among  orange  growers  to  that 
end,  and  with  a  view  to  characterize  the  shipments 


970 

i 

as  local  commerce  entirely  within  the  state,  so  as 
to  claim  for  such  shipments  the  rates  given  by 
the  railway  commission  of  the  State  of  Florida, 
intervenors'  consignments  were  made  to  an  agent 
at  Callahan,  although  the  ultimate  destination  of 
the  fruit  was  not  changed,  nor  was  the  manner  of 
transacting  the  business  substantially  changed 
from  what  it  had  been  December  1st.  As  before, 
the  receiver  furnished  the  cars  to  carry  the  fruit 
to  its  ultimate  destination.  At  Callahan  the  goods 
were  not  unloaded,  bulk  was  not  broken,  nor  the 
cars  delayed  to  any  extent.  As  in  the  case  of 
through  shipments  generally,  the  loaded  cars  were 
at  once  transferred  to  other  carriers,  to  be  for- 
warded to  their  destination.  In  other  words,  the 
character  of  the  shipment,  was  not  changed,  but 
after  December  1st,  as  before,  the  fruit,  when 
loaded  on  the  cars  at  Citra,  was  started  for  and 
destined  to  markets  in  other  states,  and  then  and 
there  at  Citra  began  what  was  in  fact  one  con- 
tinuous journey  to  an  ultimate  destination  with- 
out the  State  of  Florida.  The  difference  in  the 
transaction  of  the  business  was  solely  in  calling 
for  a  local  bill  of  lading  instead  of  a  through 
>Z  bill,  the  interposition  of  a  forwarding  agent,  and 

in  prepaying  the  charges  under  protest." 
It  was  held  that  the  shipment  from  the  growers  to 
the  forwarding  agent  was  interstate  commerce,  and 
that  the  shippers  could  not  claim  the  advantage  of  the 
domestic  rates  established  by  the  Florida  Eailway 
Commission. 

In  States  v.  Gulf,  C.  &  S.  F.  Ey.  Co.  (Tex.),  44  S. 
W.,  542  (1898),  there  was  an  action  by  the  State  of 
Texas  against  the  Gulf,  Colorado  &  Santa  Fe  Ey.  Co. 
to  recover  the  statutory  penalty  for  violation  of  the 
tariff  rate  fixed  by  the  state  railroad  commission.  The 
railroad  commission  had  established  the  rate  of 
charges  for  freight  from  San  Angelo,  Tex.,  to  Fort 
Worth,  Tex.,  at  221/4  cents  per  hundred  pounds  for 
sheep,  which  was  a  lower  rate  than  the  interstate  rate 
prevailing  for  so  much  of  an  interstate  haul  as  might 


971 

be  made  between  the  same  points.  In  April,  1895,  S. 
G.  Long  &  Co.,  having  4,500  head  of  sheep  to  ship  to 
Kansas  City,  Mo.,  and  knowing  that  the  shipment 
could  be  made  at  a  cheaper  rate  by  shipping  them  to 
Fort  Worth  under  the  state  commission  rates  and  re- 
shipping  them  from  there  to  destination  out  of  the 
state,  requested  cars  for  a  shipment  to  Fort  Worth. 
The  railroad  notified  Long  &  Co.  that  if  the  final  desti- 
nation was  Fort  Worth  it  would  carry  at  the  state 
commission  rate,  but  if  the  shipment  was  found  to  be 
intended  for  a  point  outside  of  the  state  it  would 
not  surrender  the  shipment  at  Fort  Worth  until  the 
local  rate  applicable  to  interstate  business  should  be 
paid.  It  was  held  that  the  shipment  was  interstate  and 
not  subject  to  the  rate  fixed  by  the  railroad  commis- 
sion. 

In  Houston  Direct  Nav.  Co.  v.  Insurance  Co.  of 
North  America,  89  Tex.,  1 ;  32  S.  W.,  899,  freight  des- 
tined for  Liverpool  was  billed  and  shipped  by  the  Nav- 
igation Co.  from  Houston  to  Galveston,  and  notwith- 
standing the  fact  that  the  Navigation  Co.  only  con- 
tracted to  transport  the  property  from  Houston  to  Gal- 
veston, still  it  was  held  that  the  Navigation  Co.  in 
transporting  freight  from  Houston  to  Galveston  was 
engaged  in  interstate  commerce. 

In  The  Daniel  Ball,  10  Wall.,  557,  565  (1870),  the 
United  States  Supreme  Court  said: 

"Whenever  a  commodity  has  begun  to  move  as 
an  article  of  trade  from  one  state  to  another,  com- 
merce in  that  commodity  between  the  states  has 
commenced.  The  fact  that  several  different-  and 
independent  agencies  are  employed  in  transport- 
ing the  commodity,  some  acting  entirely  in  one 
state  and  some  acting  through  two  or  more  states, 
does  in  no  respect  affect  the  character  of  the  trans- 
action. To  the  extent  in  which  each  agency  acts 
in  that  transportation,  it  is  subject  to  the  regula- 
tion of  Congress.  *  *  *  Several  agencies  combin- 
ing, each  taking  up  the  commodity  transported  at 
the  boundary  line  at  one  end  of  the  state  and 
leaving  it  at  the  boundary  line  at  the  other  end, 
the  federal  jurisdiction  would  be  entirely  ousted 


972 

and  the  constitutional  provision  would  become  a 
dead  letter." 

Under  the  above  quoted  decisions  I  am  of  the  opin- 
ion that  the  transportation  in  question  constitutes  in- 
terstate commerce,  and  that  the  benefit  of  the  lower 
rate  from  Chicago  to  East  St.  Louis  cannot  be  ob- 
tained. There  is  no  breakage  in  bulk  of  the  shipments 
from  outside  of  the  state,  and  they  are  reconsigned 
apparently  to  obtain  the  benefit  of  the  lower  rate.  In 
words,  the  goods  are  temporarily  in  Chicago  in  transit 
upon  a  through  shipment.  If,  however,  the  goods  had 
reached  Chicago  as  a  final  destination  and  subsequently 
there  was  a  reshipment,  under  such  circumstances  as 
would  show  that  there  was  no  attempt  simply  to  ob- 
tain the  benefit  of  the  reduced  rate,  or  there  was  a 
breakage  of  bulk,  the  shipment  could  be  made  at  the 
lower  rate  obtained  between  Chicago  and  East  St. 
Louis.  The  circumstances,  character  and  destination 
of  the  shipment  largely  determine  whether  it  is  inter- 
state commerce,  but  as  the  facts  are  outlined  I  am  of 
the  opinion  that  the  shipments  were  interstate  com- 
merce, and  the  claims  for  any  rebate,  based  on  the 
lower  rate  from  Chicago  to  East  St.  Louis,  would,  if 
granted,  be  in  violation  of  the  Elkins  Act,  as  amended 
by  the  Hepburn  Act  of  1906,  forbidding  rebates  and 
discriminations  on  interstate  commerce. 

As  was  held  in  U.  S.  v.  Milwaukee  Refrigerator 
Transit  Co.,  147  Fed.,  247  (1905),  it  is  the  manifest 
purpose  of  the  statutes  regulating  interstate  commerce 
to  strike  through  all  pretence  and  all  ingenious  devices 
to  the  substance  of  the  transaction,  and  it  is  the  duty 
of  the  courts  to  recognize  and  carry  into  effect  such 
purpose  in  suits  for  their  enforcement. 

On  the  other  hand,  if  the  shipment  was  in  fact  a 
separate  and  distinct  shipment,  so  as  to  be  an  inter- 
state shipment  and  not  a  mere  continuation  of  inter- 
state transit,  an  overcharge  paid  under  protest  could 
be  recovered. 


973 


II. 

In  my  opinion  of  November  10,  1904,  in  response 
to  an  inquiry  from  Hunt,  Helm  &  Ferris  Co.,  I  dis- 
cussed the  legality  of  a  through  rate  which  is  greater 
than  the  sum  of  the  two  local  rates.  I  refer  to  this 
opinion. 

In  Hilton  Lumber  Co.  v.  Wilmington  &  Weldon  R. 
R.,9  Interstate  Commerce  Reports,  17  (April  10, 1901), 
the  Interstate  Commerce  Commission  passed  upon  the 
legality  of  such  a  rate,  observing: 

"This  seems  to  be  the  first  case  submitted  to  the 
Commission  during  the  fourteen  years  since  the 
regulating  statute  was  passed  showing  a  through 
freight  charge  over  connecting  roads  in  excess  of 
a  combination  of  charges  applying  to  and  from 
an  intermediate  point  on  the  through  line." 
In  that  case  it  appeared  that  the  local  rates  on  lum- 
ber from  Wilmington,   N.    C.,   to   Norfolk  or   Ports- 
mouth, Va.,  added  to  the  rates  in  force  from  Ports- 
mouth or  Norfolk  to  Philadelphia,  Jersey   City  and 
Boston,  produced  lower  aggregate  charges  than  the 
through  rates  in  effect  on  lumber  carried  by  the  con- 
necting defendant  carriers  from  Wilmington  direct  to 
Philadelphia,    Jersey    City    and    Boston    via    Ports- 
mouth and  Pinner's  Point,  adjacent  to  Norfolk.    This 
resulted  because  the  arbitrary  or  proportion  of  the 
through  rate  from  Wilmington  exacted  by  the  carriers 
north  of  Portsmouth  or  Norfolk  was  greater  than  their 
rates  on  shipments  from  Norfolk  or  Portsmouth.     In 
its  opinion  the  commission  said: 

(p.  28.)  "Through  rates  frequently  equal  the 
sum  of  locals  charged  to  and  from  an  intermediate 
locality,  and  in  the  south  most  rates  to  or  from 
interior  non-competitive  points  are  made  by  tak- 
ing the  rate  to  or  from  a  competitive  point  and 
adding  the  local  between  the  latter  and  the  non- 
competitive  station ;  but  it  seldom  if  ever  happens 
that  the  through  rate  from  an  interior  non-com- 
petitive point  is  made  to  exceed  the  sum  of  the 
rates  to  and  from  any  intermediate  locality,  how- 
ever strong  and  controlling  the  competition  at  such 


974 

intermediate  point  may  be.  Through  rates  higher 
than  combinations  of  local  charges  are  extremely 
rare  in  railroad  transportation,  and  those  whicli 
have  been  brought  to  our  attention  have  only  been 
approved  when  occasioned  by  extraordinary  and 
peculiar  circumstances.  They  have  not  been  jus- 
tified in  any  case  by  the  fact  of  water  or  other 
competition  at  points  of  junction  between  the  con- 
necting roads." 

(p.  29.)  "The  complainant  can  ship  its  lumber 
to  Portsmouth  or  Norfolk  and  reship  the  same 
therefrom  to  northern  cities  at  the  local  rate  in 
force  to  and  from  Portsmouth  or  Norfolk;  and 
when  the  roads  south  and  north  of  Norfolk  make 
a  through  route  from  Wilmington  to  the  north, 
operating  through  cars,  providing  for  through 
billing,  and  collection  of  rates  as  single  charges 
for  the  entire  service,  thereby  diminishing  the 
cost  of  transportation  to  themselves,  a  through 
charge  exacted  by  them  which  is  greater  than  the 
sum  of  such  local  rates  is  unreasonable  as  well  as 
unjustly  discriminating  and  wrongfully  prejudic- 
ial to  the  complainant  engaged  in  competition  with 
manufacturers  in  and  about  the  City  of  Norfolk." 
As  to  the  legality  of  application  of  the  combination 

of   the   two   locals   by   the   shipper,   the    Commission 

stated : 

(p.  35.)  "The  complainant  has  the  legal  right 
under  the  tariffs  of  the  Atlantic  Coast  Line  and 
Seaboard  Air  Line  to  ship  a  carload  of  lumber 
from  Wilmington  to  Norfolk  or  Portsmouth  at  a 
rate  of  10i/>  cents  per  100  pounds,  and  under  the 
tariffs  of  the  New  York,  Philadelphia  and  Nor- 
folk Railroad  and  its  connections  on  the  north 
complainant 's  consignee  in  Norfolk  or  Portsmouth 
has  the  legal  right  to  ship  that  same  lumber  from 
that  point  to  Philadelphia,  Jersey  City  or  Bos- 
ton at  8,  9  and  15  cents  per  100  pounds,  respect- 
ively. There  is  nothing  to  prevent  the  complain- 
ant from  shipping  the  lumber  to  itself  at  Norfolk 
or  Portsmouth  and  having  the  reshipment  made 


975 

for  its  own  account.  Indeed,  it  might,  for  example, 
ship  over  the  Seaboard  Air  Line  to  Portsmouth 
to  its  own  order,  direct  delivery  to  the  New  York, 
Philadelphia  and  Norfolk,  and  by  separate  order 
direct  the  New  York,  Philadelphia  and  Norfolk 
to  ship  the  car  to  Philadelphia,  Jersey  City  or 
Boston.    The  Seaboard  Air  Line  could,  it  is  true, 
refuse  to  permit  its  car,  thus  used  for  a  local  ship- 
ment to  Portsmouth  to  be  sent  north  on  reship- 
ment,  notwithstanding  the  same  car  might  be  em- 
ployed in  a  through  shipment   from   Wilmington, 
but  if  it  took  that  position  it  would  be  with  a  view 
of  preventing  the  complainant  or  other  Wilming- 
ton shipper  from  utilizing  a  lower  combination  of 
rates,  and  not  for  any  justifiable  traffic  purpose." 
The  Commission  held  that  the  through  rates  from 
Wilmington  to  Philadelphia,  Jersey  City  and  Boston, 
to  the  extent  that  they  exceeded  the  sum  of  rates  from 
Wilmington  to  the  northern  destinations  mentioned, 
were  in  violation  of  the  third  section  of  the  Interstate 
Commerce   Act,  which   prohibits  any  undue  or  unrea- 
sonable  preference   or   advantage   to   any   particular 
person  or  locality,  or  to  any  particular  description 
of  traffic,  and  also  of  the  first  section  of  the  Act,  pro- 
viding that  all  charges  shall  be  reasonable  and  just. 
And  it  was  also  held  that  in  charging  a  through  rate 
which  exceeds  the  sum  of  the  locals  by  reason  of  the 
fact  that  the  proportion  from  Portsmouth   north   ex- 
ceeds the  local  from  that  point,  the  carriers  violated 
the  second  section  of  the  Act,  prohibiting  unjust  dis- 
crimination  between   persons  similarly  circumstanced 
and   conditioned.    From  the   report  of  the  Interstate 
Commerce  Commission,  filed  with  the  Senate  Commit- 
tee on  Interstate  Commerce,  April  19,  1905,  it  appears 
that  the  carriers  complied  with  the  order  in  this  case. 
In  R.  R.  and  Warehouse  Commissioners  v.  Eureka 
Springs  Ry.  Co.,  1 1.  C.  C.  Rep.,  69,  the  defendant  car- 
ried passengers  between  Seligman,  Mo.,  and  Eureka 
Springs,  Ark.,  18^  miles,  at  the  rate  of  10  cents  a  mile. 
The  Arkansas  statute  limited  the  passenger  fare  in 
that  state  to  5  cents  a  mile,  and  under  the  Missouri  law 
but  4  cents  a  mile  could  be  charged  in  that  state.   The 


976 

Commission  ordered  that  the  through  rate  should  not 
exceed  $1.20  (6y2  cents  per  mile).  Under  such  maxi- 
mum the  through  rate,  amounting  to  82^  cents,  was 
still  in  excess  of  the  combined  state  rates.  This  was 
permitted  in  view  of  the  small  earnings  of  the  carrier, 
and  because  no  relative  injustice  between  localities  re- 
sulted. 

In  another  case,  Savannah  Bureau  of  Freight  and 
Transportation  v.  C.  &  S.  Ry.  Co.,  7  I.  C.  C.  Rep., 
601,  the  passenger  rate  between  Savannah,  Ga.,  and 
Charleston,  S.  C.,  was  greater  than  the  combination 
of  rates  allowed  by  Georgia  and  South  Carolina,  and 
it  was  made  so  by  an  act  of  the  South  Carolina  legisla- 
ture limiting  the  rate  within  that  state  of  314  cents  per 
mile.  It  was  held  that  the  Interstate  Commerce  Act 
contained  no  provision  under  which  the  interstate  fare 
must  necessarily  be  reduced  because  the  South  Car- 
olina mileage  rate  was  lowered  by  the  State  Act,  or 
might  be  raised  according  to  a  different  mileage  rate 
which  might  be  fixed  by  the  State  Commission.  There 
was  no  suggestion  in  the  case  of  relative  injustice  or 
undue  advantage  to  any  person  or  locality. 

In  Ariz  v.  Seaboard  Air  Line  Ry.,  11  I.  C.  C.,  458 
(Nov.  20,  1905),  complaint  was  made  that  the  through 
interstate  passenger  rate  between  Fernandina,  Flor- 
ida, and  Savannah,  Ga.,  exceeded  the  sum  of  the  local 
state  fares  over  the  same  route.  The  through  rate  for 
124  miles  was  $5.00,  or  about  4  cents  per  mile,  while 
a  rate  of  3  cents  per  mile  was  fixed  by  state  authority 
for  fares  within  the  states  of  Florida  and  Georgia.  It 
was  held  that  while  ordinarily  the  through  interstate 
passenger  fare  should  not  exceed  the  sum  of  local 
fares,  there  is  no  specific  requirement  in  the  regulat- 
ing statute  to  that  effect,  and  that  in  this  case  the  only 
question  for  determination  was  whether  the  fare  was 
unreasonable.  Under  the  peculiar  circumstances  of  the 
case  in  question  (such  as  the  meager  earnings  and 
high  cost  of  operation)  the  fare  was  held  a  valid  one. 

A  similar  question  arose  in  Brabham  v.  Atlantic 
Coast  Line  R.  Co.,  11  I.  C.  C.,  464  (Dec.  7,  1905),  and 
through  passenger  fares  from  Ellenton  and  Jackson, 


977 

S.  C.,  to  Augusta,  Ga.,  were  sustained  which  were 
higher  than  the  local  maximum  rates  fixed  by  the  state 
authorities  in  South  Carolina  and  Georgia. 

In  Hope  Cotton  Oil  Co.  v.  Texas  &  Pacific  Ry.  Co., 
10  I.  C.  C.  Rep.,  696  (April  24,  1905),  the  complainant 
desired  to  ship  cotton  seed  in  carloads  from  Louisiana 
stations  on  defendant's  line  to  Hope,  Ark.,  at  the  sum 
of  the  local  rates  based  upon  Texarkana,  Ark.,  which 
sum  was  less  than  the  published  through  charge,  but 
defendant  refused  to  apply  its  local  rates  to  Texar- 
kana of  12Vi>  cents  per  100  pounds  on  such  through  ship- 
ments, and  also  refused  to  allow  complainant  to  ship 
locally  to  Texarkana  under  the  12i/>  cent  rate  in  force 
to  that  point.  It  was  held  that  while  the  defendant 
was  entitled  to  insist  upon  the  application  of  the 
through  rate  to  the  through  shipment  to  Hope,  it  could 
not  lawfully  refuse  to  receive  and  carry  complainant's 
freight  to  Texarkana  under  its  local  rate  to  that  point, 
and  that  the  complainant  was  entitled  to  reparation 
for  damages  to  the  amount  of  $2,240  resulting  from  its 
inability  to  ship  640  tons  of  cotton  seed  to  Hope,  which 
it  had  contracted  for  and  desired  to  have  transported 
over  defendant's  line. 

In  Spillers  &  Co.  v.  L.  <&  N.  R.  Co.,  8  I.  C.  C.,  364 
(Nov.  29,  1899),  the  defendant  instructed  its  agents  to 
disregard  the  regular  published  tariff  rates  to  Gallatin, 
and  to  charge  the  lower  combination  of  rates  to  and 
from  Nashville.  It  also  had  this  rule  of  applying  com- 
bination rates,  when  less  than  tariff  rates,  in  force 
at  other  stations  on  its  line.  Instructions  to  that  effect 
were  issued  in  a  separate  printed  circular,  and  did 
not  appear  nor  were  they  referred  to  in  any  way  upon 
its  regular  published  tariff.  It  was  held  that  this 
practice  was  unlawful,  and  that  to  be  in  compliance 
with  the  Act,  any  rule  which  operates  to  alter,  modify 
or  change  established  rates  must  be  fully  and  clearly 
set  forth  upon  the  published  tariffs  of  rates  and 
charges  to  be  affected  thereby. 

The  Interstate  Commerce  Act,  as  amended  in  1906, 
now  provides  (Sec.  6) : 

"That  every  common  carrier  subject  to  the  pro- 


978 

visions  of  this  Act  shall  file  with  the  Commission 
created  by  this  Act  and  print  and  keep  open  to 
public  inspection  schedules  showing  all  the  rates, 
fares  and  charges  for  transportation  between  dif- 
ferent points  on  its  own  route  and  between  points 
on  its  own  route  and  points  on  the  route  of  any 
other  carrier  by  railroad,  by  pipe  line  or  by  water, 
when  a  through  route  and  joint  rate  have  been 
established.  If  no  joint  rate  over  the,  through 
route  has  been  established,  the  several  carriers  in 
such  through  route  shall  file,  print  and  keep  open 
to  public  inspection,  as  aforesaid,  the  separately 
established  rates,  fares  and  charges  applied  to 
the  through  transportation.  The  schedules  printed 
as  aforesaid  by  any  such  common  carrier  shall 
plainly  state  the  places  between  which  property 
and  passengers  will  be  carried,  and  shall  contain 
the  classification  of  freight  in  force,  and  shall  also 
state  separately  all  terminal  charges,  storage 
charges,  icing  charges,  and  all  other  charges  which 
the  Commission  may  require,  all  privileges  or  fa- 
cilities granted  or  allowed,  and  any  rules  or  reg- 
ulations which  in  any  wise  change,  affect,  or  de- 
termine any  part  or  the  aggregate  of  such  afore- 
said rates,  fares  and  charges,  or  the  value  of  the 
service  rendered  to  the  passenger,  shipper  or  con- 
signee. ' ' 
And  also : 

"No  carrier,  unless  otherwise  provided  by  this 
Act,  shall  engage  or  participate  in  the  transporta- 
tion of  passengers  or  property,  as  defined  in  this 
Act,  unless  the  rates,  fares  and  charges  upon 
which  the  same  are  transported  by  said  carrier 
have  been  filed  and  published  in  accordance  with 
the  provisions  of  this  Act;  nor  shall  any  carrier 
charge  or  demand  or  collect  or  receive  a  greater 
or  less  or  different  compensation  for  such  trans- 
portation of  passengers  or  property,  or  for  any 
service  in  connection  therewith,  between  the  points 
named  in  such  tariffs  than  the  rates,  fares  and 
charges  which  are  specified  in  the  tariff  filed  and 


979 

in  effect  at  the  time ;  nor  shall  any  carrier  refund 
or  remit  in  any  manner  or  by  any  device  any  por- 
tion of  the  rates,  fares  and  charges  so  specified, 
nor  extend  to  any  shipper  or  person  any  privileges 
or  facilities  in  the  transportation  of  passengers  or 
property,  except  such  as  are  specified  in  such  tar- 
iffs; Provided,  That  wherever  the  word  'carrier' 
occurs  in  this  Act,  it  shall  be  held  to  mean  'com- 
mon carrier.'  " 

The  Elkins  Act,  as  amended  in  1906,  now  provides : 
"Whenever  any  carrier  files  with  the  Inter- 
state Commerce  Commission  or  publishes  a  par- 
ticular rate  under  the  provisions  of  the  Act  to  reg- 
ulate commerce  or  Acts  amendatory  thereof,  or 
participates  in  any  rates  so  filed  or  published,  that 
rate  as  against  such  carriers,  its  officers  or  agents, 
in  any  prosecution  begun  under  this  Act  shall  be 
conclusively  deemed  to  be  the  legal  rate,  and  any 
departure  from  such  rate,  or  any  offer  to  depart 
therefrom,  shall  be  deemed  to  be  an  offense  under 
this  section  of  this  Act." 

An  anomalous  situation  exists  where  the  through 
rate  is  greater  than  the  combination  of  the  locals.  If 
a  joint  through  rate  is  established,  the  tariff  must  be 
filed  with  the  Interstate  Commerce  Commission  and 
such  ' '  particular  rate ' '  becomes  the  legal  rate  between 
the  points  in  question.  At  the  same  time  each  carrier 
must  file  its  tariffs  of  local  rates,  and  as  between  the 
local  points,  such  rates  are  legal  rates.  But  at  the 
same  time  no  carrier  can  lawfully  exact  unreasonable 
and  unjust  rates.  There  is  then  in  fact  two  legal  rates 
between  the  same  points ;  one  the  through  rate,  and  the 
other  the  rate  made  by  the  combination  of  the  interme- 
diate rates.  A  departure  by  the  carrier  from  the  pub- 
lished through  rate  on  a  through  shipment  between  the 
particular  points  on  which  the  rate  applies  is  illegal, 
and  at  the  same  time  a  departure  by  the  carrier  from 
the  published  intermediate  rates  is  illegal. 

In  U.  8.  v.  Wood,  145  Fed.,  405  (April  2,  1906),  which 
was  a  criminal  prosecution  for  the  acceptance  of  re- 
bates, the  court  said  in  charging  the  jury : 


980 

1  i  Under  the  original  Act,  as  amended  in  1889,  as 
to  the  carrier,  any  deviation  from  the  joint  rates 
specified  in  the  schedule  filed  was  unlawful,  and 
the  Elkins  Act  so  amended  this  as  to  the  carrier 
that  any  departure  from  a  joint  tariff  filed  by  it, 
or  any  departure  from  a  joint  tariff  published 
by  it,  or  any  departure  from  a  joint  tariff  filed  or 
published  in  which  it  participated  in  the  rate  so 
filed  or  published,  was  made  lawful.  That  part  of 
the  Elkins  Act  which  makes  it  unlawful  for  the 
carrier  to  offer,  grant,  or  give  any  rebate,  conces- 
sion or  discrimination  in  respect  to  the  transpor- 
tation of  property,  whereby  any  such  property 
shall  by  any  device  whatever  be  transported  at  a 
less  rate  than  that  named  in  the  tariff  published 
and  filed,  may  be  extended  by  the  subsequent 
clause  as  to  the  carrier  so  as  to  make  it  unlawful 
to  offer,  grant  or  give  a  rebate  on  joint  tariffs  in 
which  such  carrier  participated,  but  as  to  the  ship- 
per or  person  receiving  a  rebate,  the  tariff 
must  be  filed  and  published.  In  other  words,  it 
may  be  unlawful  for  a  carrier  to  give  a  rebate, 
concession  or  discrimination  on  a  joint  tariff  filed 
by  it,  or  on  a  joint  tariff  published  by  it,  or  on  a 
joint  tariff  in  which  it  participated  when  filed  by 
another,  or  on  a  joint  tariff  in  which  it  partici- 
pated when  published  by  another,  but  it  is  only  un- 
lawful for  a  shipper  to  receive  a  rebate  on  a  joint 
tariff  which  is  both  fled  and  published.  The  Act. 
so  construed,  works  no  injustice  to  either  the  car- 
rier or  the  shipper.  The  carrier  knows  whether  it 
has  either  filed  or  published  a  joint  rate,  or 
whether  it  has  participated  in  a  joint  rate  filed  or 
published  by  another,  and  if  it  departs  therefrom 
it  does  so  wilfully  and  with  knowledge ;  and  if  a 
shipper  receives  a  rebate  on  a  joint  tariff  which 
has  been  both  filed  and  published,  it  does  so  with 
notice  of  the  lawful  rate,  and  as  to  him,  when  the 
rate  is  filed  and  published,  he  is  bound  to  take  no- 
tice, and  the  law  will  not  excuse  him  if  he  fails  to 
inform  himself  when  the  opportunity  is  afforded, 


981 

which  the  law  provides  by  requiring  the  filing 
and  the  publishing  of  the  rates  for  his  informa- 
tion." 

I  am  of  the  opinion  that  where  a  through  shipment 
is  made  between  the  particular  points,  the  through 
tariff  rate  filed  and  published  as  to  such  points  must 
govern.  But  at  the  same  time,  a  shipment  may  le- 
gally be  made  applying  the  combination  of  the  inter- 
mediate rates  by  shipping  the  goods  to  the  interme- 
diate basing  point,  and  there  reconsigning  them  to  des- 
tination. The  shipment  can  the'n  take  the  legal  pub- 
lished rates  applicable  between  the  points.  But  if 
one  of  the  intermediate  rates  is  applicable  only  to 
shipments  within  the  state  and  not  to  interstate  com- 
merce shipments  (as  when  the  rate  is  fixed  by  the  state 
statute  or  by  state  authorities),  then  if  the  shipment 
is  interstate  commerce,  advantage  cannot  be  taken  of 
the  local  rate,  as  stated  in  response  to  the  first  in- 
quiry. 

When  the  through  rate  is  greater  than  the  combina- 
tion of  intermediate  rates  over  the  same  route,  prima 
facie,  the  through  rate  is  unreasonable.  The  proper 
course  to  pursue  in  such  a  case  is  to  make  complaint 
to  the  interstate  Commerce  Commission.  There  may  of 
course  be  peculiar  circumstances  in  some  cases  which 
justify  a  higher  through  rate,  but  the  burden  will  be 
on  the  carrier  to  justify  the  rate.  Under  the  present 
law  the  Interstate  Commerce  Commission  lias  power  to 
determine  joint  and  through  rates,  and  a  formal  com- 
plaint to  the  Commission  may  result  in  the  correction 
of  the  through  rate.  But  in  this  connection  it  should 
be  noted  that  the  Interstate  Commerce  Commission  has 
announced  the  following  ruling  in  Tariff  Circular  No. 
5A.  (Act  12,  1906) : 

"Where  a  joint  rate  is  in  effect  by  a  given  route 
which  is  higher  between  any  points  than  the  sum 
of  the  locals  between  the  same  points,  liy  the  same 
or  another  route,  such  higher  joint  rate  may,  until 
December  31,  1906,  be  changed  by  reducing  the 
same  to  the  sum  of  such  locals,  but  not  otherwise, 
upon  posting  one  day  in  advance  a  tariff  of  such 


982 

reduced  rates  and  mailing  a  copy  thereof  to  the 
Commission. ' ' 

Under  this  ruling  of  the  Commission,  I  advise  that 
in  any  case  where  the  through  rate  is  greater  than  the 
sum  of  the  locals,  the  carrier  should  be  requested  to 
reduce  the  rate  in  accordance  with  the  above  ruling  of 
the  Commission,  and  if  the  carrier  then  refuses  to  com- 
ply complaint  should  be  filed  with  the  Commission. 

To  the  extent,  however,  that  I  have  stated,  the  com- 
bination of  the  locals  (that  is  consign  to  an  intermedi- 
ate point  and  from  there  reconsign  by  a  different  road) 
may  also  legally  be  availed  of,  but  on  a  direct  ship- 
ment between  two  points  the  through  rates  should  be 
paid  under  protest.  If  it  is  inconvenient  or  imprac- 
ticable to  apply  the  combination  rates  in  the  manner 
above  stated  (by  reconsigning  from  an  intermediate 
point  over  a  different  road)  the  through  rate  should 
be  paid  under  a  proper  protest,  and  an  action  then 
instituted  against  the  carrier  for  reparation  based 
upon  the  unreasonableness  of  the  through  rate. 
B. 

NOTE.— Since  giving  the  above  opinion,  the  Inter- 
state Commerce  Commission  has  made  the  following 
announcement  in  Tariff  Circular  No.  6-A.  (Nov.  16, 
1906). 

' '  Many  informal  complaints  are  received  in  con- 
nection with  regularly  established  through  rates 
which  are  in  excess  of  the  sum  of  the  locals  be- 
tween the  same  points.  The  Commission  has  no 
authority  to  change  or  fix  a  rate  except  after  full 
hearing  upon  formal  complaint.  The  Commission 
announced  in  its  Tariff  Circular  No.  5-A  of  Oc- 
tober 12,  1906,  a  rule  permitting  practically  im- 
mediate reduction  of  a  through  rate  which  is 
higher  than  the  sum  of  the  locals  between  the  same 
points.  It  is  believed  to  be  proper  for  the  Com- 
mission to  say  that  if  called  upon  to  formally  pass 
upon  a  case  of  this  nature  it  would  be  its  policy 
to  consider  the  through  rate,  which  is  higher  than 
the  sum  of  the  locals  between  the  same  points,  as 
prim  a  facie  unreasonafSle,  and  that  the  burden  of 


983 

proof  would  be  upon  the  carrier  to  defend  such 
higher  through  rate." 

NOTE: — In  an  opinion  of  July  13,  1907  (The  Crane  Company), 
this  question  is  again  discussed  in  view  of  the  ruling  of  the  United 
States  Supreme  Court  in  Gulf,  Colorado  $  Santa  Fe  By.  Co.  \.  Texas, 
204  U.  S.,  403  (Feb.  25,  1907).  See,  also,  an  opinion  of  Nov.  26, 
1907  (Latrobe  Steel  &  Coupler  Co.)  on  the  right  to  reconsign  ship- 
ments in  order  to  obtain  benefit  of  sum  of  two  local  rates,  which  are 
less  than  the  joint  through  rate.  The  question  is  also  discussed  in 
Kansas  City  So.  By.  Co.  v.  Brooks,  105  S.  W.,  93  (Ark.,  Oct.  28,  1907).— 
Ed. 


THE  DUTY  OF  A  CARRIER  TO  SUPPLY  GRAIN  DOORS  FOR  CARS 
USED  FOR  THE  SHIPMENT  OF  STONEWORK. 

(Western  Stoneware  Company,  December  10,  1906.) 
"Will  you  kindly  take  up  with  your  legal  de- 
partment the  question  of  furnishing  grain  doors 
for  the  loading  of  stoneware  (pottery)    in  cars. 
Some    of    the    roads  refuse  to  furnish  us  grain 
doors  so  as  to  properly  load  cars  and  yet  compel 
us  to  load  cars  at  their  minimum  capacity.    Our 
goods   are   of   such  nature   that   they   cannot   be 
loaded   and   properly   protected   unless   we   have 
grain  doors  to  keep  the  ware  away  from  the  regu- 
lar doors  of  the  car.   Kindly  advise  us  if  it  is  the 
duty  of  the  railroad  companies  to  provide  proper 
facilities  for  handling  the  freight,  or  if  we  are 
compelled  to  furnish  the  boards  for  this  purpose, 
could  we  legally  collect  from  the  railroad  com- 
panies claims  for  the  cost  of  the  lumber?" 
It  is  the  duty  of  a  carrier  to  furnish  for  the  trans- 
portation of  the  shipper's  goods  cars  which  are  safe 
and  suitable  for  goods  of  the  character  of  those  to  be 
transported. 

Hutchinson  on  Carriers  (2nd  Ed.),  sees.  292, 

295a 

C.<&  A.  R.  Co.  v.  Davis,  159  111.,  53. 
T.  H.  &  I.  Co.  v.  Crews,  53  111.  App.,  50. 
5  Am.  Eng.  Enc.  Law  (2nd  Ed.),  175. 
Beard  v.  St.  Louis,  A.  &  T.  H.  R.  R.  Co.,  79 
la.,  527. 


984 

Burk  v.  U.  S.  Express  Co.,  87  111.  App.,  505. 
International,  &c.,  R.  R.  v.  Aten,  81  S.  W.,  346 

(Tex.  Civ.  App.). 

In  Sloan  v.  St.  Louis,  &c.,  R.  Co.,  58  Mo.,  220  (1874), 
there  was  an  action  by  a  shipper  of  hay  to  recover  for 
standards  voluntarily  erected  by  him  upon  flat  cars 
for  safety  of  transportation.  It  appeared  that  the 
plaintiffs  were  shippers  of  hay,  and  the  cars  furnished 
by  the  railroad  were  flat  cars  without  standards,  and 
the  plaintiffs,  believing  that  hay  could  not  be  carried 
on  such  cars  without  standards,  had  standards  put  on 
them  at  a  cost  of  about  $70.  Suit  was  brought  to  re- 
cover the  value  of  the  standards  thus  placed  on  the 
cars.  It  was  held  that  the  railroad  company  was  not 
liable,  the  standards  having  been  erected  without  any 
contract  with  the  company ;  and  the  court  further  said 
that  while  it  was  the  business  of  common  carriers  to 
have  suitable  vehicles  for  the  transportation  of  the 
freight  shipped,  and  they  are  liable  for  losses  occurring 
in  consequence  of  defects  in  this  regard,  still  the  car- 
rier is  the  judge  of  the  sufficiency  of  the  cars  in  which 
it  is  proposed  to  carry  freight. 

The  Illinois  Railroad  and  Warehouse  Commission, 
Classification  No.  10  (July  1,  1906),  Rule  21,  provides 
as  follows : 

"The  following  allowances  for  weights  of  racks 
and  blocks  used  in  securing  freight  placed  on  open 
cars  will  be  made  when  actual  weight  cannot  be 
ascertained,  viz. :  For  racks,  1,000  Ibs. ;  for  blocks, 
500  Ibs. ;  for  racks  and  blocks  where  both  are  used, 
1,000  Ibs.  Companies  will  not  be  responsible  for 
removal  of  or  damage  to  temporary  racks,  and  it 
will  be  optional  with  them  to  remove  or  return 
such  temporary  racks  to  shippers  if  not  taken  by 
consignees. ' ' 

Similar  provisions  are  in  the  Western  Classification 
(Rule  13),  in  the  Southern  Classification  (Rule  28,  ap- 
plying also  to  linings  placed  in  cars  by  shippers),  and 
in  the  Official  Classification  (Rule  19a,  likewise  apply- 
ing to  linings  placed  in  all  cars  by  shippers). 

In  State  ex  rel  Washington  Mill  Co.  v.  Gt.  Northern 


985 

Ry  Co.,  86  Pac.,  1056  (Wash.,  Sept.  13,  1906),  the  court 
considered  an  Act  of  the  State  of  Washington  (Acts 
1905,  p.  238),  fixing  the  weight  of  ''standards,"  etc., 
used  in  cars  for  the  shipment  of  lumber,  at  1,000 
pounds,  and  requiring  such  weight  to  be  deducted  from 
the  net  weight  of  lumber  shipped,  so  the  freight  shall 
be  charged  only  on  the  cargo,  and  held  it  unreasonable 
and  void,  as  requiring  free  carriage  of  freight,  and 
therefore  a  taking  of  property  without  due  process  of 
law. 

The  court  said  (pp.  1056-7) : 

"The  lower  court  held  that  section  2  of  the  act 
above  referred  to  was  unconstitutional,  because  it 
requires  the  respondent  to  carry  freight  on  each 
car  free  of  charge,  and  is  therefore  a  taking  of 
property  without  due  process  of  law.  We  think 
this  position  must  be  sustained.  If  the  Legislature 
may  say  that  the  carrier  must  deduct  1,000  pounds 
from  the  net  weight  carried,  then  there  is  no  limit 
to  which  it  may  not  go.  This  arbitrary  deduction 
is  not  based  upon  the  right  to  regulate  the  rates  of 
freight  because  such  rates  must  necessarily  be 
based  upon  the  actual  weight  or  bulk  carried. 
There  can  be  no  doubt  that  it  is  the  duty  of  a  com- 
mon carrier  to  furnish  cars  suitable  for  what  is 
carried,  and  the  carrier  is  liable  in  damages  for  a 
failure  of  its  duty  in  this  respect.  Emerson  v.  St. 
Louis  &  H.  Ry.  Co.,  Ill  Mo.,  161  19  S.  W.,  1113; 
Beard  v.  Illinois  Central  R.  Co.,  79  Iowa,  518;  44 
N.  W.,  800;  7  L.  E.  A.,  280;  18  Am.  St.  Rep.,  381. 
This  duty  is  conceded  by  the  respondent,  and  the 
authority  of  the  Legislature  to  provide  for  a  suit- 
able equipment  is  not  questioned  in  the  case. 
When  the  Legislature  defines  by  statute  what  shall 
constitute  a  reasonable  or  proper  equipment,  it 
cannot  go  further  and  arbitrarily  fix  the  weight  of 
such  equipment,  and  then  say  the  weight  thereof 
shall  be  deducted  from  the  net  weight  of  freight 
carried  on  the  car,  because  the  equipment  is  no 
part  of  the  freight  carried.  If  the  Legislature  may 
provide  for  deducting  the  weight  of  the  equipment 


98(5 

from  the  net  weight  of  the  freight,  it  may  for  the 
same  reason  deduct  the  weight  of  the  car  from  the 
weight  of  the  freight,  and  thus  require  the  carrier 
to  carry  freight  to  the  amount  of  the  weight  of  the 
car  and  equipment  free." 
And  (p.  1058) : 

"Furthermore,  the  act  makes  no  distinction  be- 
tween the  case  where  the  shipper  furnishes  the 
standards  and  where  the  carrier  furnishes  them. 
In  either  event  section  '2  requires  1,000  pounds  to 
be  deducted  from  the  net  weight  of  the  lumber  car- 
ried on  each  car,  and  freight  shall  be  charged  on 
the  balance  only.  This  is  clearly  not  a  reasonable 
regulation,  and  if  the  Legislature  intended  that  the 
shipper  should  furnish  the  standards,  etc.,  and 
have  the  weight  thereof  deducted,  the  language 
used  does  not  express  that  idea.  The  case  is 
argued  here  upon  the  theory  that,  under  the  admit- 
ted facts,  the  respondent  is  required  to  carry  400 
pounds  of  freight  free.  It  may  be  doubted  that 
the  validity  of  a  statute  may  be  said  to  depend 
upon  the  admissions  of  a  party  or  the  facts  in  a 
particular  case.  We  do  not  base  this  decision 
upon  the  facts  pleaded  and  admitted.  It  rests 
upon  the  statute  itself,  which  plainly  provides  an 
arbitrary  weight  for  standards,  etc.,  which  the  first 
section  makes  a  part  of  the  car  and  which  the  sec- 
ond section  requires  to  be  deducted  from  the  net 
weight  of  the  freight  carried,  thus  requiring 
freight  to  be  carried  free.  For  these  reasons,  we 
are  satisfied  that  section  2  of  the  act  is  in  contra- 
vention of  section  1,  Amend.  Art.  14,  of  the  Con- 
stitution of  the  United  States,  and  is  therefore 
void. ' ' 

Unless  the  carriers  hold  themselves  out  to  the  pub- 
lic as  furnishing  inside  doors  or  grain  doors  for  the 
purpose  of  protecting  shipments  of  similar  articles  as 
stoneware  while  in  transit,  I  am  of  the  opinion  that  the 
carrier  cannot  be  held  for  the  cost  of  such  doors  to  the 
consignor.  It  is  the  duty  of  the  carrier  to  furnish  rea- 
sonably safe  and  secure  cars  for  the  purpose  required, 


987 

but  it  is  under  no  obligation  to  furnish  every  device  in- 
suring safety  of  the  goods  shipped,  any  more  than  it 
can  be  said  it  might  be  the  duty  of  the  carrier  to  fur- 
nish crates  for  certain  articles  shipped  in  bulk.  Of 
course,  if  the  carrier  makes  a  practice  of  furnishing 
grain  doors  to  shippers  under  these  circumstances,  it 
could  not  refuse  to  give  them  to  one  shipper  while  it 
gives  them  to  another.  Under  the  circumstances  as 
stated,  however,  I  am  of  the  opinion  that  the  carrier 
cannot  be  held  liable  for  the  cost  of  the  grain  doors. 

As  to  whether  the  carrier  is  liable  for  breakage  of 
goods  in  transit,  presents  another  question,  and  is  cov- 
ered by  my  opinion  to  the  Monmouth  Pottery  Co., 
dated  August  9,  1904. 


NOTE: — See,  also,  opinion  of  Oct.  19,  1907  (Illinois  Manufacturers' 
Association)  as  to  allowance  by  carriers  for  dunnage,  linings,  etc.,  in 
cars. — Ed. 


WHETHER  A  CARRIER  IS  LIABLE  FOR  DAMAGES,  WHEN  IT  AC- 
CEPTS GOODS  TO  BE  CARRIED  BY  A  DESIGNATED  ROUTE  AND 
DEVIATES  FROM  THE  ROUTE  NAMED  IN  THE  BILL  OF  LAD- 
ING. 

(Lord  &  Buslmell  Company,  December  10,  1906.) 

"We  are  receiving  opinions  from  General  Coun- 
sel Mr.  Levy  Mayer  and  would  like  now  to  get  an 
opinion  in  reference  to  the  following: 

August  9th,  1905,  we  shipped  from  Hyatt,  Texas, 
consigned  to  ourselves,  a  car  of  lumber,  and  pro- 
cured a  bill  of  lading  from  the  T.  &  N.  0.  R.  R.  Co., 
showing  routing  via  '  C.,  R.  I.  &  P.  at  Kansas  City. ' 
Shortly  after  the  car  was  shipped,  we  found  we 
could  use  it  to  better  advantage  at  Kansas  City, 
and  instructed  the  agent  of  the  C.,  R.  I.  &  P.  Ry. 
at  Kansas  City  to  stop  same  there  and  deliver  to 
our  customer  at  that  point.  The  car  came  through 
to  Chicago  and  we  had  to  reship  same  to  Kansas 
City,  paying  local  tariff  therefor,  and  investiga- 
tion developed  the  fact  that  the  car  did  not  move 
over  the  route  specified  in  bill  of  lading,  but  was 


delivered  to  the  C.,  B.  I.  &  P.  at  St.  Joseph,  Mo., 
instead  of  Kansas  City. 

We  filed  claim  against  the  originating  line,  the 
T.  &  X.  0.  R.  R.,  for  the  additional  expense  in- 
curred, basing  same  on  the  assumption  that  they 
failed  to  perform  their  contract,  which  called  for 
delivery  to  the  C.,  R.  I.  &  P.  at  Kansas  City,  on 
billing  for  Chicago.  They  decline  claim  for  rea- 
sons set  forth  in  their  letter,  which  reads  as  fol- 
lows : 

'I  beg  to  return  herewith  all  papers  we  have 
ever  received  from  you  on  the  above  numbered 
claim.  Examination  of  the  bill  of  lading  shows 
that  there  was  nothing  to  indicate  that  routing  via 
Kansas  City  was  essential  to  handling  the  ship- 
ment in  the  manner  you  desire,  nor  were  we  ad- 
vised in  any  way  that  you  wanted  to  take  advan- 
tage of  a  sale  at  some  other  point  than  the  desti- 
nation shown  on  the  bill  of  lading.  For  this  rea- 
son, delivery  at  Chicago  was  the  only  essential 
feature,  and  we  accordingly  exercised  our  well 
recognized  right  to  route  as  we  saw  fit.  We  there- 
fore cannot  entertain  the  question  of  any  addi- 
tional expense  caused  you  in  disposing  of  the  ship- 
ment en  route.' 

We  would  like  to  know  if  the  routing  in  a  bill  of 
lading  is  not  an  essential  part  of  the  contract, 
whether  or  not  a  carrying  line  has  a  right  to  devi- 
ate from  same  without  regard  to  the  rights  of  the 
shipper,  and  if  such  deviation  is  a  direct  or  indi- 
rect cause  of  loss  to  the  shipper,  if  he  is  not  en- 
titled to  damages  from  the  line  or  lines  at  fault." 
Where  it  is  the  custom  of  a  railroad  company  to  re- 
ceive the  directions  of  the  shippers  and   owners   of 
goods  to  be  sent  beyond  the  terminus  of  their  road,  if 
directions  are  given  to  forward  by  a  particular  line, 
which  are  not  obeyed,  the  railroad  company  will  be 
liable.    The  shippers  and  owners  have  a  right  to  con- 
trol the  destination  of  their  goods. 

M.  S.  &  N.  I.  Ey.  Co.  v.  Day,  20  111.,  375. 
Lewis  v.  G.  &  C.  U.  R.  Co.,  40  111.,  281. 


989 

Strahorn  v.  Un.  St.  &  Tr.  Co.,  43  111.,  424. 

L.  8.  &  M.  8.  Ry.  v.  Live  Stock  Bank,  178  111., 
506,  524. 

Scotthorn  v.  So.  Staffordshire  Ry.,  8  Exch., 
341  (Eng.). 

Hutchinson  on  Carriers  (2nd  ed.),  sees.  337, 
337a. 

5  Am.  Eng.  Enc.  Law  (2nd  ed.,  214). 
In  Steidl  v.  M.  &  St.  L.  R.  R.  Co.,  94  Minn.,  233,  102 
N.  W.,  701  (1905),  the  plaintiff  shipped  a  carload  of 
potatoes  from  Perham,  Minnesota,  over  the  Northern 
Pacific  Railway,  consigned  to  himself  at  Oskaloosa, 
Iowa.  A  bill  of  lading  was  issued  containing  no  direc- 
tions as  to  route,  but  subsequently  a  valid  agree- 
ment was  made  adding  to  the  bill  of  lading  that  the 
route  of  the  goods  should  be  over  the  Minneapolis  & 
St.  Louis  R.  R.  to  Angus,  Iowa,  thence  over  the  Rock 
Island  Railroad  to  Oskaloosa.  The  shipper  did  this  in 
order  that  he  might  stop  the  car,  if  he  wished,  and  sell 
the  potatoes  at  some  point  on  that  route.  The  car- 
rier, however,  forwarded  the  car  over  the  B.  C.  R.  &  N. 
R.  R.  and  the  plaintiff  was  compelled  to  dispose  of  the 
potatoes  at  a  lower  price  than  he  could  have  done  if 
they  had  been  carried  as  directed.  It  was  held  that  the 
carrier  was  liable  for  the  damages  caused  by  not  fol- 
lowing directions. 

In  L  C.  R.  R.  Co.  v.  Foulks,  191  111.,  57,  where  goods 
were  shipped  from  Malvern,  Iowa,  to  Philadelphia, 
over  the  Omaha  &  St.  Louis  Ry.,  via  Kanawha  Dis- 
patch, the  goods  came  through  to  Chicago,  and  instead 
of  being  billed  through  to  Philadelphia  all  rail,  were 
billed  via  Clyde  line  of  steamers.  The  rate  sheets 
showed  that  such  freight  so  routed  must  go  all  rail, 
and  that  the  Clyde  line  did  not  receive  such  freight. 
The  railroad  was  held  liable  for  this  misbilling. 

In  Mallet  v.  Great  Eastern  Ry.  (1889),  1  Q.  B.  309, 
the  plaintiff  delivered  to  the  defendants  at  Lowestoft 
certain  parcels  of  fish  to  be  forwarded  to  Jersey,  via 
the  Great  Western  Railway  and  Weymouth.  Goods 
sent  from  Lowestoft  to  Jersey  have  to  pass  through 
London,  from  which  point  to  Jersey  there  are  two 


990 

routes,  one  by  the  Great  Western  Railway  and  Wey- 
mouth  and  the  other  by  the  London  &  Southwestern 
Railway  and  Southampton.  The  carrier  sent  the  fish 
by  the  Southampton  route  instead  of  the  Weymouth 
route,  as  directed,  and  the  plaintiff  lost  his  market  for 
the  fish.  The  court  held  that  inasmuch  as  the  defend- 
ant, without  the  consent  of  the  consignor,  altered  the 
contract  and  sent  the  goods  by  a  different  route,  the 
carrier  was  liable  for  the  damages  resulting. 

In  Brown  &  Haywood  Co.  v.  Pennsylvania  Co.,  63 
Minn.,  546,  65  N.  W.,  961  (1896),  a  carrier  received 
goods  to  be  carried  to  a  point  beyond  its  own  line,  with 
directions  to  deliver  them  to  certain  connecting  car- 
riers, with  the  last  of  which  the  shipper  had  made  an 
agreement  for  stopping  the  car  at  intermediate  points 
on  its  line  for  delivery  of  portions  of  the  goods.  It. 
however,  wrongfully  sent  the  goods  by  different  con- 
necting carriers  whose  lines  reached  but  one  of  the 
intermediate  points.  On  arrival  there  the  shipper  dis- 
closed his  contract  to  have  them  distributed  at  the 
three  points,  and  demanded  compliance  therewith.  The 
carrier  refused  compliance  until  payment  of  freight 
for  the  whole  route,  when  it  delivered  the  goods  des- 
tined to  that  point  and  undertook,  at  its  own  cost,  to 
carry  to  each  of  the  other  points  the  portion  of  the 
goods  to  be  delivered  there,  and  in  doing  so  the  goods 
were  injured.  It  was  held  that  the  initial  carrier, 
though  it  did  not  know  of  the  shipper 's  agreement  with 
the  last  connecting  carrier,  to  which  it  was  directed  to 
deliver  the  goods,  was  liable  for  the  damage. 

In  Philadelphia  &  R.  R.  Co.  v.  Beck,  125  Pa.  St.,  620, 
17  Atl.,  505  (1889),  the  plaintiff  shipped  over  defend- 
ant's road  goods  marked  "Via  P.,  care  of  A.  Coast 
Line,  by  fast  freight,"  and  defendant  delivered  the 
goods  at  P.  to  a  steamship  company,  in  whose  posses- 
sion they  were  destroyed  by  fire.  The  carrier  was 
held  liable  for  breach  of  contract  in  not  sending  the 
goods  by  fast  freight. 

And  it  may  be  said  to  be  the  general  rule  where  a 
railroad  company  accepts  goods  to  be  transported  by 
a  designated  route  or  by  an  indicated  connecting  line, 


991 

that  the  initial  carrier  is  liable  for  any  damages  re- 
sulting if  it  delivers  the  shipment  to  a  carrier  other 
than  the  designated  one,  or  deviates  from  the  route 
named  in  the  contract. 

Eckles  v.  Mo.  Pac.  R.  Co.,  87  S.  W.,  99  (Mo. 

App.). 

Georgia  R.  Co.  v.  Cole,  68  Ga.,  623  (1882). 
Brown  &  Haywood  Co.  v.  Penn.  Co.,  63  Minn., 

546,  65  N.  W.  961  (1896). 
Ingalls  v.  Brooks,  I  Edm.  Sel.  Cas.  (N.  Y.), 

104. 

Wilcox  v.  Parmalee,  5  N.  Y.  Super.  Ct.,  610. 
Johnson  v.  N.  Y.  Cent.  R.  Co.,  39  How.  Pr., 

127. 

Hinckley  v.  N.  Y.  Cent.  R.  Co.,  56  N.  Y.,  429. 
In  3  Sutherland  on  Damages  (3d  Ed.),  Sec.  931,  it  is 
said  that  a  carrier  is  liable  "for  any  damages  result- 
ing from  a  departure  from  the  contract  or  from  the 
consignor's  instructions  as  to  the  route,  mode  of  con- 
veyance, or  the  condition  of  delivery  (in  the  absence 
of  any  exigency) ;  in  other  words,  when  a  carrier  ac- 
cepts goods  to  be  carried,  with  a  direction  on  the  part 
of  the  owner  to  carry  them  in  a  particular  way,  or  by 
a  particular  route,  he  is  bound  to  obey  it,  and  if  he 
attempts  to  perform  his  contract-  in  a  manner  diff erent 
from  his  undertaking  he  becomes  an  insurer,  and  can- 
not avail  himself  of  any  exception  in  the  contract." 

And  in  3  Sutherland  on  Damages  (3d  Ed.),  Sec.  902, 
it  is  said  that 

"a  carrier  who  deviates  from  his  agreement  or  in- 
structions by  dispatching  the  goods  from  the  ter- 
minus of  his  route  by  a  different  conveyance  or 
carrier,   and  thereby   subjects   them   to   increase 
freight,  is  liable  for  the  difference." 
In  Hutchinson  on  Carriers  (2d  Ed.),  Sees.  310-316, 
the  rule  is  laid  down  that  the  carrier  may  carry  the 
goods  by  the  usual  route,  but  where  the  carrier  con- 
tracts to  carry  in  a  certain  manner  or  by  a  particular 
route,  it  will  be  held  liable  for  the  loss  if  the  contract 
is  not  observed. 

In  this  connection  it  may  be  noted  that  many  of  the 


992 

bills  of  lading  in  use  contain  the  following  or  a  similar 
provision : 

"Every  carrier  shall  have  the  right,  in  case  of 
necessity,  to  forward  said  property  by  any  rail- 
road or  route  between  the  point  of  shipment  and 
the  point  to  which  the  rate  is  given. ' ' 
This  is  a  valid  agreement  or  condition,  and  if  the 
reason  for  the  deviation  is  within  such  a  condition  in 
the  bill  of  lading,  it  will  be  a  sufficient  excuse  for  the 
carrier. 

I  am  of  the  opinion  that  the  railroad  company  is 
liable  for  any  damages  caused  that  can  be  proved  (in- 
including  the  additional  expense  incurred)  by  reason 
of  the  transfer  of  the  car  of  lumber  contrary  to  the 
express  directions  of  the  bill  of  lading. 


WHETHER  IT  IS  LAWFUL  UNDER  THE  NEW  RATE  LAW  FOR  A 
CARRIER  TO  ABSORB  A  SWITCHING  CHARGE. 

(Edgar  M.  Heafer  Tile  Company,  December  10,  1906.) 
' '  We  are  situated  upon  the  Illinois  Central  Bail- 
road  and  desire  to  ship  some  goods  to  a  point  in 
Indiana  where  the  rate  is  ten  cents  per  hundred, 
but  not  over  the  Illinois  Central,  since  their  route 
is  not  so  direct.  If  we  load  on  the  I.  C.  tracks  and 
the  latter  delivers  to  the  other  road,  charging  us 
two  dollars  per  car  for  the  switching  service,  may 
the  other  road  assume  or  absorb  this  switching 
charge  under  the  new  interstate  law?  We  would 
be  pleased  to  have  Mr.  Mayer's  opinion  on  this 
question. ' ' 

I  am  of  the  opinion  that  it  is  lawful  under  the  Inter- 
state Commerce  Act  for  the  competing  road  to  absorb 
the  switching  charge  of  two  dollars  per  car  in  order 
to  equalize  the  advantages  of  the  Illinois  Central ;  pro- 
vided, however,  that  the  absorption  of  such  switching- 
charges  applies  to  all  persons  in  like  situation,  as 
stated  in  the  tariffs  applicable  to  such  shipments  and 
filed  with  the  Interstate  Commerce  Commission,  and 
published,  as  required  by  Section  6  of  the  Interstate 


993 

Commerce  .jAct.  In  this  connection,  the  Interstate 
Commerce  Commission  in  its  application  of  the  Act 
has  proposed  the  following  ruling  in  Traffic  Circular 
3-A,  Sec.  8  (Sept.  15,  1906) : 

''When  any  switching  or  terminal  charge,  either 
at  the  point  of  origin  or  the  point  of  delivery,  is 
absorbed,  or  when  any  service  is  rendered  and  the 
total  cost  to  the  shipper  from  the  place  where  the 
property  is  first  received  to  the  place  where  it  is 
finally  delivered,  is  thereby  affected,  such  absorp- 
tion or  service  shall  be  stated  upon  the  tariff." 


WHETHER  SHIPPING  GOODS  BY  EXPRESS  IN  BULK  FOR  DIS- 
TRIBUTION IS  A  VIOLATION  OF  THE  INTERSTATE  COM- 
MERCE LAW. 

(111.  Mfrs.'  Assn.,  December  10,  1906.) 
"Will  you  kindly  inform  me  if  a  shipper  is  vio- 
lating the  Interstate  Commerce  Law  if  goods  are 
being  shipped  by  the  express  companies  from  one 
point  to  another  in  bulk  for  distribution  either  by 
an  agent  or  otherwise!  A  member  of  the  Illinois 
Manufacturers'  Association  is  in  the  habit  of 
sending  goods  by  the  express  companies  from  Chi- 
cago or  other  cities  to  its  own  agents,  who  receive 
the  goods,  unpack  and  distribute  them  to  the  vari- 
ous parties  to  whom  they  have  been  sold. 

In  one  instance  the  goods  are  shipped  to  the 
American  District  Telegraph  Company  and  dis- 
tributed by  messenger  boys.    Is  not  the  A.  D.  T. 
Company  the  agent!     In  the  other  instance  the 
parties  who  receive  the  goods  for  distribution  are 
employed  especially  for  that  purpose.     I  enclose 
herewith  a  copy  of  a  letter  which  the  Adams  Ex- 
press Company  has  written  the  member." 
The  letter  of  the  Adams  Express  Company  referred 
to  is  as  follows: 

"Mr.  Gunkel,  of  the  Detmer  Woolen  Company, 
called  me  up  this  morning  on  the  telephone  and 
said  that  your  firm  was  shipping  bulked  packages, 
and  if  I  did  not  prohibit  you  from  doing  so,  he 


994 

would  report  us  to  the  Interstate  Commerce  Com- 
mission and  also  report  you.  The  penalty  for  any 
violation  of  that  law  is  so  severe  that  I  take  this 
method  of  warning  you  against  attempting  to  get 
any  cheaper  rates  than  any  other  shipper  by  our 
express.  You  know  this  applies  equally  to  the 
shipper  and  the  carrier.  I  have  no  knowledge  of 
your  having  done  what  is  charged  by  Mr.  Gunkel, 
but  if  you  have  done  as  he  charges,  you  are  hereby 
notified  that  this  company  will  not  carry  for  you 
any  packages  in  violation  of  the  Interstate  Com- 
merce Law." 

The  Interstate  Commerce  Act,  as  amended,  spe- 
cifically declares  that  express  companies  engaged  in 
Interstate  Commerce  are  subject  to  the  Act,  and  sched- 
ules and  tariffs  must  therefore  be  filed  by  express  com- 
panies, stating  all  rates,  charges,  etc. 
The  Elkins  Act,  as  amended,  provides: 

"It  shall  be  unlawful  for  any  person,  or  per- 
sons, or  corporation,  to  offer,  grant,  or  give,  or  to 
solicit,  accept,  or  receive,  any  rebate,  concession  or 
discrimination  in  respect  to  the  transportation  of 
any  property  in  interstate  or  foreign  commerce 
by  any  common  carrier  subject  to  said  Act  to  regu- 
late commerce  and  the  Acts  amendatory  thereof, 
whereby  any  such  property  shall  by  any  device 
whatever  be  transported  at  a  less  rate  than  that 
named  in  the  tariffs  published  and  filed  by  such 
carrier,  as  is  required  by  said  Act  to  regulate  com- 
merce and  the  Acts  amendatory  thereof,  or  where- 
by any  other  advantage  is  given  or  discrimination 
is  practiced." 

This  shipping  of  packages  in  bulk  is  what  is  called 
in  England  "the  packing  of  parcels,"  and  in  France, 
" groupage  a  convert."  In  England,  several  "Packed 
Parcels  Cases"  have  come  before  the  courts.  In  G.  W. 
R.  Co.  v.  Sutton  (1869),  L.  B.  4  H.  L.,  226,  the  defend- 
ants claimed  the  right  to  charge  fifth  class  rate  plus  50 
per  cent,  on  packed  parcels  shipped  by  plaintiff.  They 
charged  this  rate  on  the  parcels  of  the  plaintiff  and 
other  intercepting  carriers,  but  not  on  similar  parcels 


995 

sent  from  wholesale  firms  direct  to  the  railway  com- 
pany. It  was  held  that  no  difference  could  be  made 
in  the  charge.  In  Piddington  v.  South  Eastern  Rail- 
way Company,  5  C.  B.  (N.  S.),  HI,  27  L.  J.  C.  P.,  295, 
where  the  plaintiff,  a  carrier,  had  sent  by  the  defend- 
ant's railroad  a  number  of  " packed  parcels,"  i.  e.,  par- 
cels consisting  of  a  number  of  smaller  parcels  packed 
together,  for  which  the  defendants  had  charged  and 
the  plaintiff  had  paid  double  the  rates  which  they 
would  have  charged  for  the  same  goods  when  not 
packed,  and  the  jury  found  that  there  was  no  increased 
risk  in  the  carriage  of  the  parcels  when  so  packed,  it 
was  held  that  such  double  charge  was  unlawful  and 
that  the  plaintiff  was  entitled  to  recover  the  sum  he 
had  paid  in  excess.  Byles,  J.,  in  his  opinion,  said:  "I 
own  I  had  an  impression  that  not  only  had  this  ques- 
tion been  settled  here,  but  also  in  America,  where  there 
are  large  companies  formed  expressly  for  the  purpose 
of  forwarding  goods  by  the  railway."  And  in  Parker 
v.  G.  W.  R.  Co.,  7  M.  &  G.,  253,  and  Crouch  v.  L.  &  N. 
W.  Ry.  Co.,  9  Ex.,  556,  the  English  Courts  of  Ex- 
chequer held  that  "packed  parcels"  could  not  be 
charged  at  a  higher  rate  to  intercepting  carriers  or 
forwarders  than  to  the  general  public.  In  Crouch  v. 
G.  N.  Ry.,  11  Ex.,  742,  25  L.  J.  Ex.,  137,  it  was  held  that 
a  railway  company  cannot  legally  charge  a  greater 
sum  for  the  carriage  of  a  package  containing  several 
parcels  belonging  to  different  persons  than  for  a  pack- 
age containing  several  parcels  all  belonging  to  one  per- 
son. In  Crouch  v.  L.  &  N.  W.  Ry.  Co.,  2  Car.  &  K., 
789,  it  was  held  that  a  railway  company  was  not  justi- 
fied in  opening  a  package  with  a  view  to  ascertain 
whether  it  consists  only  of  packed  parcels. 

In  Baxendale  v.  L.  &  S.  W.  Ry.  Co.,  L.  R.  1  Exch., 
137  (1866),  it  appeared  that  the  railway  company  was 
in  the  habit  of  charging  to  the  public  on  any  consign- 
ment of  goods  made  to  one  person,  at  the  same  time 
though  consisting  of  several  distinct  articles,  a  ton- 
nage rate  on  the  aggregate  of  the  whole,  and  the  court 
held  that  the  fact  that  goods  were  so  consigned  at  the 
same  time  to  one  person,  and  distinctly  addressed  to 


996 

him  (some  articles  had  also  written  conspicuously 
upon  them  the  names  of  persons  to  whom  the  con- 
signee intended  to  deliver  them),  did  not  entitle  the 
defendants  to  charge  separately  for  those  on  which 
such  names  were  different. 

It  should  be  noted  that  the  decisions  of  the  English 
Courts  are  based  upon  the  Equality  Clause  of  the 
English  Eailway  and  Canal  Traffic  Act,  which  is  sub- 
stantially adopted  in  Section  2  of  the  Interstate  Com- 
merce Act,  and  the  United  States  Supreme  Court  has 
repeatedly  recognized  the  rule  that  where  such  is  the 
case  the  construction  of  these  provisions  by  the  Eng- 
lish Courts  of  Law  has  been  received  with  all  the 
weight  of  authority.  McDonald  v.  Hovey,  110  U.  S., 
619;  T.  &  P.  Ry.  Co.  v.  I.  C.  Com'n,  162  U.  S.,  197; 
I.  C.  C.  Com'n  v.  Alabama  Midland  R.  Co.,  168  U.  S., 
144. 

In  Johnson  v.  Dominion  Express  Company,  28  On- 
tario, 203  (1900),  an  action  was  brought  by  William 
Johnson  and  others  trading  under  the  name  of  the 
National  Package  Dispatch  Company,  to  compel  the 
defendants  to  carry  goods  tendered  to  them  for  trans- 
portation. The  plaintiffs  had  established  agencies  at 
Toronto  and  other  points  and  practically  confined 
themselves  to  carrying  small  parcels  at  a  much  less 
charge  than  the  ordinary  and  regular  charges  made  by 
the  express  company;  they  gathered  these  smaller 
parcels  together,  put  them  in  hampers  or  packed  par- 
'cels  and  tendered  them  to  the  express  company  to  be 
carried  on  the  tariff  charged  for  parcels  under  100 
pounds  in  weight,  paying  for  such  packed  parcels  very 
much  less  than  would  be  charged  for  the  several  par- 
cels if  sent  separately.  The  express  company  con- 
tended that  it  had  the  right  to  decline  to  carry  packed 
parcels  for  the  plaintiffs  and  that  it  had  the  right  to 
charge  for  each  parcel  according  to  the  ordinary  rates, 
and  to  require  from  the  plaintiffs  a  statement  of  the 
number  of  parcels  placed  in  the  packed  parcels.  The 
plaintiffs  asserted  the  right  to  demand  carriage  of  the 
packed  parcels  at  the  same  rates  as  any  other  parcel 
similar  in  size  and  weight  would  be  carried  under  the 
defendant's  tariff,  without  reference  to  the  fact  that 


such  packed  parcels  contained  several  parcels  ad- 
dressed to  different  persons  to  be  delivered  by  agents 
of  the  plaintiffs.  The  Court  held  that  the  defendants 
could  not  be  compelled  to  carry  " packed  parcels" 
(i.  e.,  a  large  number  of  small  parcels  packed  together 
in  one  large  parcel)  at  their  usual  tariff  for  single  par- 
cels by  size  and  weight. 

Under  the  Canadian  Railway  Act  there  is,  however, 
no  jurisdiction  to  inquire  into  the  reasonableness  of 
rates  charged  by  express  companies.  Vickers  Express 
Co.  v.  Can.  Pac.  R.  Co.,  9  Ontario,  251,  13  A.  R.  210. 

In  Lundquist  v.  Grand  Trunk  Western  Ry.  Co.,  121 
Fed.,  915  (1901),  Judge  Kohlsaat  held  that'a  railroad 
company  is  not  required  by  the  Interstate  Commerce 
Act  to  give  the  same  carload  rate  on  interstate  ship- 
ments to  forwarding  agents  who  solcit  property  for 
shipment  from  different  owners,  each  having  less  than 
a  carload,  and  combine  it  into  carload  lots,  that  it  gives 
on  carload  shipments  by  a  single  owner;  the  charges  in 
such  case  not  being  for  "a  like  and  contemporaneous 
service  in  the  transportation  of  a  like  kind  of  traffic 
under  substantially  similar  circumstances  and  condi- 
tions" so  as  to  render  the  difference  in  the  rates  an 
unlawful  discrimination  under  Section  2  of  the  Inter- 
state Commerce  Act. 

In  CamUos  v.  P.  &  R.  R.  Co.,  4  Brewst.,  563  (1873), 
the  plaintiff  sought  to  have  the  defendant  carry  pack- 
ages of  parcels  at  the  same  proportionate  rate  as  for  a 
single  parcel.  The  Court  said  (p.  628) :  "The  defend- 
ants take  the  untenable,  extreme  position  that  they 
can  make  the  full  charge  as  for  separate  packages. 
On  this  point,  of  course,  the  charge  cannot  be  main- 
tained." 

In  Buckeye  Buggy  Company  v.  C.,  C.  C.  &  St.  L.  Ry. 
Co.,  9  I.  C.  C.,  620  (1903),  it  appears  that  dealers  in 
carriages  would  order  carriages  and  buggies  of  differ- 
ent grades  from  different  manufacturers,  and  having 
purchased  a  carload  in  this  manner  and  wishing  to 
combine  them  in  a  single  carload  shipment  and  thus 
obtain  the  carload  rate,  would  instruct  the  various  par- 
ties to  deliver  their  goods  at  the  warehouse  of  one  of 
the  manufacturers,  who  would  load  them  in  the  car  at 


998 

one  time  and  place  and  tender  the  carload  to  the  car- 
rier for  shipment  to  the  owners  as  consignee.  The 
carrier  refused  to  apply  the  carload  rating  on  such 
shipments.  The  Interstate  Commerce  Commission  held 
that  before  allowing  a  carload  rating  to  a  carload  ship- 
ment the  carrier  can  require  a  loading  at  one  time  and 
place  and  that  but  a  single  bill  of  lading  be  issued,  and 
that  the  shipment  shall  be  from  one  consignor  to  one 
consignee.  And  when  the  goods  are  so  loaded  and 
become  the  property  of  the  consignee,  the  carrier  has 
no  right  to  inquire  whether  the  consignee  obtained  his 
title  from  one  or  several  owners,  and  if  it  accords  the 
carload  rate  when  the  consignor  is  the  owner,  it  cannot 
refuse  to  extend  the  same  privilege  when  the  consignee 
is  owner.  This  case  is  followed  in  C.  S.  Bell  Co.  v.  B. 
&  0.  S.  W.  R.  Co.,  9  I.  C.  C.,  632  (1903). 

I  am  of  the  opinion  that  it  is  not  in  violation  of  the 
Interstate  Commerce  Act  for  a  consignor  to  ship  by 
express  packages  of  goods  enclosed  in  larger  packages 
to  an  agent  of  the  consignor  for  distribution  to  the  ulti- 
mate consignees,  so  long  as  the  consignor  is  the  owner 
of  the  goods  at  the  time  of  shipment,  and  they  are 
shipped  at  one  time  and  each  packed  parcel  shipped 
under  one  express  bill  of  lading  to  one  consignee.  The 
mere  fact  that  by  such  a  shipment  the  consignor  ob- 
tains the  benefit  of  a  cheaper  rate  is  not  a  discrimina- 
tion or  concession  in  the  transportation  of  property 
any  more  than  it  can  be  said  that  when  a  consignor 
ships  in  carload  lots  he  thereby  obtains  a  discrimina- 
tion or  preference  over  a  shipper  of  less  than  carload 
lots.  When  the  goods  are  thus  expressed  by  the  con- 
signor to  his  agent  under  one  express  bill  of  lading  the 
express  company  will  not  be  subject  to  numerous  suits 
in  event  of  loss  by  the  ultimate  consignees,  and  the 
express  company  cannot  on  that  ground  justify  a  refu- 
sal to  carry.  Section  2  of  the  Interstate  Commerce 
Act  provides  that 

"If  any  common  carrier  subject  to  the  pro  vi- 
sions of  this  Act  shall,  directly  or  indirectly,  by 
any  special  rates,  rebate,  drawback,  or  other  de- 
vice, charge,  demand,  collect,  or  receive  from  any 


999 

person  or  persons  a  greater  or  less  compensation 
for  any  service  rendered,  or  to  be  rendered,  in 
the  transportation  of  passengers  or  property,  sub- 
ject to  the  provisions  of  this  Act,  than  it  charges, 
demands,  collects,  or  receives  from  any  other  per- 
son or  persons  for  doing  for  him  or  them  a  like 
and  contemporaneous  service  in  the  transporta- 
tion of  a  like  kind  of  traffic  under  substantially 
similar  circumstances  and  conditions,  such  com- 
mon carrier  shall  be  deemed  guilty  of  unjust 
discrimination,  which  is  hereby  prohibited  and 
declared  unlawful." 

I  am  of  the  opinion,  however,  that  a  shipment  by 
the  consignor  of  his  own  goods  in  the  manner  above 
outlined  does  not  come  within  the  prohibition  of  this 
section  of  the  Act.  I  am  not  informed  as  to  whether 
the  tariffs  of  the  express  companies  filed  and  published 
in  accordance  with  the  Act  contain  any  regulation  as 
to  shipments  of  the  nature  here  in  question.  If  the 
express  company  names  one  rate  for  such  shipments 
and  another  rate  for  parcels  shipped  separately,  the 
published  charges  must  be  paid,  for  they  are  prima 
facie  the  legal  rates.  If  there  is  such  a  difference  in 
express  rates  on  the  classes  of  shipments  as  seems 
unreasonable,  I  advise  that  the  charges  be  paid  under 
protest  and  complaint  be  filed  with  the  Interstate  Com- 
merce Commission.  But  apart  from  any  rule  or  regu- 
lation of  the  express  tariffs,  and  if  only  one  rate  is 
named  on  a  certain  class  of  articles,  the  express  com- 
panies cannot  refuse  to  accept,  at  the  regular  rates, 
packed  parcels  shipped  in  the  manner  heretofore  indi- 
cated. 


1000 


AS  TO  WHETHER  AN  ILLINOIS  CORPORATION  CAN  MAKE  THE 
ANTI-TRUST  AFFIDAVIT  REQUIRED  BY  THE  ILLINOIS  STAT- 
UTES, WHEN  THE  ILLINOIS  CORPORATION  HAS  THE  SAME 
STOCKHOLEDERS,  DIRECTORS  AND  OFFICERS  AS  A  NEW 
YORK  CORPORATION  ENGAGED  IN  THE  SAME  BUSINESS, 
AND  PRICES  ARE  FIXED  AS  TO  CERTAIN  TERRITORY'  OUT- 
SIDE OF  ILLINOIS  BY  THE  NEW  YORK  CORPORATION  ;  AND 
AS  TO  THE  EXTRATERRITORIAL  EFFECT  OF  THE  ILLINOIS 
ANTI-TRUST  STATUTES. 

(Illinois  Mfrs.'  Assn.,  December  10,  1906.) 
"We  have  a  matter  under  consideration,  on 
which  we  would  like  your  opinion.  Do  we,  as  a 
home  corporation,  conflict  with  the  anti-trust  law 
of  Illinois  in  maintaining  a  domestic  corporation 
in  a  foreign  state1? 

Our  company  is  organized  under  the  laws  of 
Illinois,  capital  $400,000,  a  close  corporation  of  six 
stockholders.  We  own  and  operate  several  fac- 
tories in  the  States  of  Illinois,  Indiana,  Ohio  and 
New  York.  We  find  that  in  New  York  the  laws  are 
more  favor'able  to  domestic  corporations,  and  we 
find  that  it  will  be  much  simpler  and  more  easily 
handled  to  have  a  small  domestic  corporation. 
This  New  York  corporation  will  have  a  small  cap- 
ital of  $10,000.  The  stockholders,  directors  and 
officers  will  be  the  same  as  the  home  company, 
except  that  one  additional  director  must  come 
from  the  State  of  New  York,  as  the  law  there 
requires  at  least  one  director  to  be  a  resident  of 
New  York.  However,  it  is  not  necessary  for  this 
director  to  hold  stock.  The  New  York  corpora- 
tion is,  therefore,  owned  by  the  same  stockholders 
as  the  Illinois  corporation. 

The  business  of  the  New  York  corporation  will 
be  carried  on,  for  the  most  part,  independently  of 
the  Illinois  corporation,  except,  of  course,  that  the 
directing  head  will  be  at  this  end.  Prices  will 
be  talked  over,  although  the  New  York  end  will 
naturally  make  their  own  prices  to  meet  local  con- 


1001 

ditions.  The  books  will  be  kept  in  New  York,  they 
handling  their  own  accounts,  manufacturing,  sell- 
ing and  shipping  their  own  merchandise. 

The  territory  will  be  divided.  The  New  York 
company  will  have  all  territory  east  of  Ohio.  All 
prices  and  correspondence  for  that  territory  will 
be  handled  from  the  New  York  office.  This  in  no 
way  does  away  with  competition,  as  competition 
is  very  keen  there,  and  if  it  were  not  the  New  York 
corporation,  it  would  be  the  Illinois  corporation. 

Now,  the  question  arises,  can  we  truthfully 
make  affidavit  that  we  'have  not,  since  the  - 
day  of  -  -  (naming  the  day  upon  which  this  act 
takes  effect),  created,  entered  into  or  become  a 
member  of,  or  a  party  to,  and  was  not,  on  the  - 
day  of  -  — ,  nor  at  any  day  since  that  date, 
and  is  not  now,  a  member  of  or  a  party  to  any 
pool,  trust,  agreement,  combination,  confederation 
or  understanding  with  any  other  corporation, 
partnership,  individual  or  any  other  person  or 
association  of  persons,  to  regulate  or  fix  the  price 
of  any  article  of  merchandise  or  commodity ;  and 
that  it  has  not  entered  into  or  become  a  member 
of  or  a  party  to  any  pool,  trust,  agreement  or  con- 
tract, combination  or  confederation  to  fix  or  limit 
the  amount  or  quantity  of  any  article,  commodity 
or  merchandise  to  be  manufactured,  mined,  pro- 
duced or  sold  in  this  state;  and  that  it  has  not 
issued  and  does  not  own  any  trust  certificates,  and 
for  any  corporation,  agent,  officer  or  employe  or 
for  the  directors  or  stockholders  of  any  corpora- 
tion, has  not  entered  into  and  is  not  now  in  any 
combination,  contract  or  agreement  with  any  per- 
son or  persons,  corporation  or  corporations,  or 
with  any  stockholder  or  director  thereof,  the  pur- 
pose and  effect  of  which  said  combination,  con- 
tract or  agreement  would  be  to  place  the  man- 
agement or  control  of  such  combination  or  com- 
binations, or  the  manufactured  product  thereof, 
in  the  hands  of  any  trustee  or  trustees  with  the 
intent  to  limit  or  fix  the  price  or  lessen  the  pro- 


1002 

duction  and  sales  of  any  article  of  commerce,  use 
or  consumption,  or  to  prevent,  restrict  or  dimmish 
the  manufacture  or  output  of  any  such  article' 
We  have  decided  in  our  own  minds  that  legally, 
as  well  as  morally,  we  can  truthfully  make  affi- 
davit.    Legally,  of  course,  there  are  two  corpo- 
rations, and  while  the  ownership  and  interests  are 
identical  now,   at  some  future  date  these  inter- 
ests might  become  scattered  and  the  ownership 
change.     You  can   readily   see  that  there  is   no 
intention  to  organize  the  new  company  to  manipu- 
late prices,  for  anything  of  that  kind.    It  is  organ- 
ized for  the  reason  that  it  can  be  more  econom- 
ically and  conveniently  handled  in  this  matter." 
In  Chicago  Wall  Paper  Mills  v.  General  Paper  Com- 
pany  (U.   S.  Circuit  Court  of  Appeals,  7th  Circuit, 
Aug.  11,  1906),  147  Fed.,  491,  it  was  held  that  where  a 
combination  or  trust  agreement  was  made  in  Wiscon- 
sin, and  the  foreign  corporation  making  the  agreement 
is  doing  business  in  Illinois,  yet  such  an  agreement  is 
not  in  violation  of  the  Illinois  anti-trust  statute,  and 
the   statute   could   not   be   pleaded  in  defense   to   an 
action  by  the  corporation  against  a  resident  of  Illinois 
to  recover  for  wall  paper  sold  and  delivered  by  the 
plaintiff  corporation  (General  Paper  Co.)   to  the  de- 
fendant (Chicago  Wall  Paper  Mills).    The  court  held 
that   the    anti-trust    statute   had   no    extra-territorial 
effect   and  applied   only  to   agreements   entered   into 
within  the  State  of  Illinois. 

In  People  v.  Butler  Street  Foundry  &  Iron  Co.,  201 
111.,  236  (1903),  the  court  said  (p.  251) : 

"In  making  the  affidavit  the  affiant  is  only  re- 
quired to  take  into  consideration  the  acts  of  the 
corporation  while  engaged  in  business  wholly 
within  the  state,  and  if,  in  connection  with  that 
business,  it  has  not  been  connected  with  any  trust, 
pool  or  combination  within  the  state,  or  otherwise 
violated  the  Illinois  anti-trust  statute,  he  can 
truthfully  make  the  affidavit  to  that  effect,  al- 
though the  corporation  at  the  same  time,  in  its 
business  outside  the  state,  has  been  connected 


1003 

with  trusts,  pools,  combinations,  etc.,  in  violation 
of  the  United  States  anti-trust  statute,  that  being 
a  matter  exclusively  within  the  jurisdiction  of  the 
United  States  and  over  which  the  state  has  no 
control  and  to  which  the  statute  of  this  state  does 
not  apply." 
And  also: 

1 '  If  the  statute  be  confined  to  its  legitimate  con- 
stitutional scope  its  proper  construction  only  re- 
quires the  affidavit  to  state  whether  or  not  the 
corporation  upon  whose  behalf  it  is  made  had  vio- 
lated the  statute  by  performing  some  one  or  more 
of  the  acts  therein  prohibited  within  the  State  of 
Illinois,  and  would  not  include,  but  would  exclude, 
all  acts  which  would  connect  it  with  any  trust, 
pool,  combination,  etc.,  formed  outside  of  the 
state,  and  which  would  violate  the  anti-trust  stat- 
ute of  the  United  States." 

The  facts  are  not  stated  in  sufficient  detail  to  enable 
me  to  state  positively  a  legal  conclusion.  But  in  my 
opinion,  the  following  rule  will  furnish  the  answer: 

If  the  Illinois  corporation  does  not  enter  into  any 
agreement  with  the  New  York  corporation  within  the 
State  of  Illinois,  or  as  to  business  to  be  done  in  Illi- 
nois, the  affidavit  can  legally  be  made.  The  fact  that 
the  two  corporations  have  common  officers  and  stock- 
holders is  not  illegal.  A  complete  situation  would  be 
effected  if  the  parent  company  were  organized  under 
the  laws  of  some  state  which  permits  one  corporation 
to  hold  and  own  the  stock  of  other  corporations. 


EIGHT    OF    A    CONSIGNOR   TO    CHANGE    THE    DESTINATION    OF 
GOODS  WHILE  IN  TRANSIT. 

(F.  Bissel  Company,  December  10,  1906.) 
"We  received  a  letter  from  the  Southern  Rail- 
way Company  of  Knoxville,  Tenn.,  declining  to 
change  the  destination  on  a  car  of  locust  pins 
shipped  to  Toledo.  These  we  wish  to  stop  on  the 
way  and  divert  to  Kansas  City,  Mo.  The  South- 


ern  Eailway  say  this  is  contrary  to  the  Interstate 
Commerce  Law.  Are  you  in  a  position  to  com- 
ment on  this?" 

It  is  the  general  rule  that  while  goods  are  in  course 
of  transportation,  the  consignor  who  is  the  owner  of 
goods  has  the  right  to  direct  a  change  in  their  destina- 
tion, and  the  carrier  is  bound  to  obey  such  direction. 
5  Am.  Eng.  Enc.  Law  (2nd  Ed.),  214. 
Hutchinson  on  Carriers  (2nd  Ed.),  Sec.  134. 
Lewis  v.  R.  R.  Co.,  40  111.,  281. 
Straborn  v.  Stockyards  Co.,  43  111.,  424. 
L.  S.  &  M.  S.  R.  Co.  v.  Bank,  178  111.,  506,  524. 
Blanchard  v.  Page,  8  Gray  (Mass.),  281,  285. 
Allen  v.  Maine  Cent.  R.  Co.,  79  Me.,  327,  9 

Atl.,  895. 
L.  &  N.  R.  Co.  v.  Hartwill,  99  Ky.,  436,  36 

S.  W.,  183. 

Sutherland  v.  Bank,  78  Ky.,  250. 
Howell  v.  Norlan,  78  111.,  162,  166. 
In  Hutchinson  on  Carriers  (2nd  Ed.),  Sec.  134,  the 
rule  is  stated: 

"When  there  has  been  no  agreement  to  ship 
the  goods  which  will  make  the  delivery  of  them 
to  the  carrier  a  delivery  to  the  consignee,  and 
vest  the  property  in  him,  the  shipper  may,  even 
after  the  delivery  to  the  carrier  and  after  the  bill 
of  lading  has  been  signed  and  delivered,  or  after 
the  goods  has  passed  from  the  possession  of  the 
initial  carrier  into  that  of  a  succeeding  one,  alter 
their  destination  and  direct  delivery  to  another 
consignee,  unless  the  bill  of  lading  has  been  for- 
warded to  the  consignee  first  named  or  to  some 
one  for  his  use  ' 

In  Phila.  etc.,  R.  Co.  v.  Wireman,  88  Pa.  St.,  264 
(1879),  it  was  held  that  where  goods  are  left  with  a 
carrier  to  be  forwarded  without  any  condition  or  qual- 
ification, the  shipper  cannot  change  their  destination 
except  under  such  circumstances  as  entitle  a  vendor 
to  stop  them  in  transit. 

In  L.  S.  &  M.  8.  Ry  Co.  v.  Live  Stock  Bank,  178 
111.,  506,  the  rule  allowing  the  consignor  to  change  the 


1005 

destination  of  goods  is  limited  to  consignors  who  are 
the  owners  of  the  goods  while  in  transit.  The  court 
there  said  (p.  524) : 

"Appellee  urges  that  where  a  consignor  has  an 
interest  in  goods  consigned  he  has  a  right  to 
change  their  destination  while  they  are  in  transit, 
and  that  it  is  the  duty  of  the  carrier  to  obey  his 
instructions  for  that  purpose;  that  the  issuing  of 
the  receipts  was  with  the  consent  of  Hugh  Gil  lice, 
who  caused  the  cattle  to  be  delivered  to  the  car- 
Bier,  and  that  the  legal  effect  was  the  same  as  if 
delivered  by  the  plaintiff.  Appellee  cites,  inter 
alia,  Letvis  v.  Galena  and  Chicago  Union  Railroad 
Co..  40  111.,  281,  and  Diversey  v.  Kellogg,  44  id., 
114,  as  sustaining  these  propositions.  Hugh  Gil- 
lice  was  the  mere  agent  to  buy  for  Michael  C.  Gil- 
lice,  and  after  a  consignment  was  made  to  the  lat- 
ter he  had  no  authority  to  change  it.  In  the  Lewis 
case  it  was  held  that  shippers  and  owners  of  goods 
shipped  had  a  right  to  control  their  destination. 
That  is  an  undoubted  rule  of  the  utmost  import- 
ance to  the  commercial  world,  and  is  simply  the 
right  of  stoppage  in  transitu.  Hugh  Gillice  was 
not  the  owner  of  the  goods,  and  hence  had  not  the 
right  of  stoppage  in  transitu." 

In  Scotthorn  v.  South  Staffordshire  Ry.  Co.,  8 
Exch.,  341,  22  L.  J.  Ex.,  121,  the  plaintiff  delivered  at 
a  station  of  that  company  certain  goods  addressed  to 
the  East  India  docks,  London,  and  paid  one  sum  for 
their  carriage  for  the  whole  distance.  By  the  practice 
of  the  railway  all  goods  delivered  at  that  station  for 
London  were  forwarded  on  their  own  line  to  Birming- 
ham, and  from  thence  by  the  London  &  North  West- 
ern Railway.  Before  the  goods  in  question  arrived  in 
London,  the  plaintiff  directed  a  clerk  at  the  London 
station  of  the  latter  company  to  forward  them  to 
another  place  which  the  clerk  promised  to  do.  The 
goods  were,  however,  delivered  according  to  the  orig- 
inal address  and  lost,  and  it  was  held  that  the  South 
Staffordshire  Railway  Company  was  responsible  for 
the  loss.  Platt,  Baron,  in  delivering  judgment,  said: 


1006 

"If  a  carrier  undertakes  to  carry  goods  from 
A  to  B.  he  does  so  subject  to  a  right  in  the 
owner  to  countermand  the  direction  at  any  point 
of  the  journey,  and  although  he  may  be  bound  to 
pay  the  carrier  for  his  trouble,  yet  the  latter  has 
no  right  to  carry  them  further  against  the  will 
of  the  owner  of  the  goods. ' ' 

A  consignor  who  is  the  owner  of  the  goods  is  thus 
entitled  as  a  matter  of  right  to  change  the  destination 
of  goods  in  transit  and  the  carrier  must  follow  the 
directions.  There  is  no  provision  in  the  Intesstate 
Commerce  Act  preventing  or  forbidding  the  carrier 
from  following  the  directions  of  the  consignor  under 
such  circumstances.  Section  7  of  the  Interstate  Com- 
merce Act  provides : 

"That  it  shall  be  unlawful  for  any  common  car- 
rier subject  to  the  provisions  of  this  act  to  enter 
into  any  combination,  contract  or  agreement,  ex- 
pressed or  implied,  to  prevent  by  change  of  time 
schedule,  carriage  in  different  cars,  or  by  any 
other  means  or  devices,  the  carriage  of  freights 
from  being  continuous  from  the  place  of  shipment 
to  the  place  of  destination;  and  no  break  of  bulk, 
stoppage  or  interruption  made  by  such  common 
carrier  shall  prevent  the  carriage  of  freights 
from  being  and  being  treated  as  one  continuous 
carriage  from  the  place  of  shipment  to  the  place 
of  destination,  unless  such  break,  stoppage  or 
interruption  was  made  in  good  faith  for  some 
necessary  purpose,  and  without  any  intent  to 
avoid  or  unnecessarily  interrupt  such  continuous 
carriage  or  to  evade  any  of  the  provisions  of  this 
act." 

The  design  of  section  7  was  to  forbid  devices  on 
the  part  of  the  carrier  whereby  for  the  purpose  of 
evading  the  provisions  of  the  act,  collusive  arrange- 
ments may  be  resorted  to  to  prevent  a  continuous  car- 
riage over  connecting  lines.  The  Interstate  Commerce 
Commission  in  reference  to  this  section  said  in  R.  B. 
Comn'n.  of  Ky.  v.  L.  &  N.  R.  Co.,  10  I.  C.  C.,  173,  188 
(1904) : 


1007 

"Just  what  the  seventh  section  may  have  been 
intended  to  accomplish  is  not  certain.  Possibly 
the  legislature  had  in  mind  that  railways  might 
attempt  to  relieve  themselves  from  its  provision 
by  interrupting  traffic  at  state  lines,  and  thereby 
deprive  it  of  the  character  of  interstate  business. 
The  seventh  section  may  have  been  intended  to 
prevent  this." 

I  am  of  the  opinion  that  the  seventh  section  of  the 
act  above  quoted  has  no  application  to  the  case  here 
presented.  The  owner  of  the  goods  has  a  right  to  di- 
rect a  change  of  destination  of  goods  in  transit,  and 
the  provisions  of  section  seven  do  not  prevent  the 
carrier  from  obeying  the  directions-  of  the  owner.  I 
am  not  informed  as  to  the  terms  of  the  bill  of  lading 
covering  the  shipment  of  locust  pins  in  question,  and 
I  have  assumed  that  the  F.  Bissel  Company  is  the 
consignor.  If  the  Bissel  Company  was  still  the  owner 
of  the  shipment  while  in  transit,  and  if  the  terms  of 
shipment  were  not  such  as  to  vest  title  in  the  con- 
signee immediately  upon  delivery  to  the  initial  car- 
rier, or  if  the  bill  of  lading  had  not  been  parted  with,  I 
am  of  the  opinion  that  the  Southern  Railway  Company 
would  be  bound  to  change  the  destination  in  accord- 
ance with  the  instructions  given. 

If,  however,  the  shipment  was  to  be  stopped  for  the 
purpose  of  milling  or  dressing  in  transit,  a  different 
question  would  arise,  and  one  which  I  discussed  at 
length  in  my  opinion  of  October  8,  1906,  for  J.  M. 
Glenn,  Secretary  of  the  Illinois  Manufacturers'  As- 
sociation. 


1008 


LEGALITY  OF  A  THROUGH  RATE  GREATER  THAN  THE  SUM  OF 
LOCAL  RATES  CAUSED  BY  CHANGES  IN  CLASSIFICATION  OF 
SHIPMENT. 

(Deere  &  Weber  Co.,  Dec.  10,  1906.) 
' '  We  have  your  favor  of  the  25th  answering  our 
letter  of  the  19th  and  will  be  pleased  to  receive 
the  information  as  soon  as  possible.  We  are  writ- 
ing you  further  in  the  matter  of  rates  where 
the  sum  of  the  two  locals  has  been  less  than  the 
through  rate.  We  have  vehicles  moving  from 
several  points  in  Michigan  which  have  heretofore 
moved  4th  class  to  Chicago  and  then  under  com- 
modity rate  of  20  cts.  from  Chicago  to  Minne- 
apolis, and  the  Western  Trunk  Line  circulars  state 
that  4th  class  is  the  rate  to  Chicago  on  goods 
destined  beyond. 

The  railroads  are  now  attempting  to  charge  a 
through  third  class  rate.  Why  should  this  fourth 
class  rate  not  apply  through  if  they  will  not  use 
the  local  commodity  from  Chicago  here.  Fur- 
thermore, the  Interstate  Commerce  Commission 
says  they  can  put  in  a  through  tariff  equal  to  the 
sum  of  the  two  locals,  and  they  are  holding  up 
while  the  Eastern  and  Western  roads  are  fighting 
over  the  division.  We  have  brought  pressure  to 
bear  on  them  ourselves  to  hurry  this  issuing  of  this 
tariff  and  will  be  pleased  if  you  can  do  something 
to  expedite  matters." 

In  my  opinion  of  November  10,  1906,  to  the  Illinois 
Manufacturers'  Association,  in  response  to  an  inquiry 
from  the  Block-Pollak  Iron  Co.,  I  discussed  the  ques- 
tion as  to  what  is  the  legal  rate  where  the  through 
rate  is  greater  than  the  sum  of  the  locals,  and  to  that 
opinion  I  refer. 

If,  under  the  circumstances  stated,  the  rate  from 
Michigan  points  to  Chicago  is  fourth  class  rate  and 
from  Chicago  to  Minneapolis  is  a  commodity  rate  of 
twenty  cents,  and  the  railroads  have  filed  in  their  tar- 
iffs a  through  rate  of  third  class  rate  on  the  same  com- 
modity from  Michigan  points  to  Minneapolis,  there  is 


1009 

evidently  a  through  rate  greater  than  the  sum  of  the 
locals,  made  so  by  a  change  in  classification.  The 
same  rule  should  apply,  therefore,  as  in  any  case  where 
the  through  rate  is  greater  than  the  sum  of  the  locals. 
The  through  rate  as  named  in  the  joint  tariffs,  is  prima 
facie  the  legal  rate,  and  on  a  through  shipment  the 
carrier  is  entitled  to  collect  such  through  rate  stated 
in  the  joint  tariffs  published  and  on  file  with  the  In- 
terstate Commerce  Commission.  But  unless  the  third 
class  rate  on  through  shipments  of  vehicles  from  Mich- 
igan points  to  Minneapolis  is  published  in  the  joint 
tariffs  on  file  with  the  Commission,  the  carriers  are  not 
entitled  to  enforce  such  rates. 

I  advise  that  all  such  payments  of  freight  be  made 
under  protest,  if  the  carriers  will  not  accept  the  com- 
bination rates.  Prima  facie  the  through  rate  is  un- 
reasonable, and  upon  proof  of  the  fact  that  the  carrier 
should  make  reparation.  Complaint  should  be  filed 
with  the  Interstate  Commerce  Commission  that  the 
railroads  refuse  to  reduce  their  through  rate  to  the 
sum  of  the  locals.  If  it  is  practicable,  I  advise  that 
in  order  to  obtain  the  advantage  of  the  locals  a  method 
of  consignment  be  adopted  such  as  is  outlined  in 
my  opinion  of  November  10,  1906,  above  referred  to. 
In  any  event,  if  the  carriers  refuse  to  accept  shipments 
in  the  manner  and  under  the  classification  and  rates  by 
which  they  have  heretofore  moved,  and  insist  upon  the 
higher  through  rate,  payment  should  be  made  under 
protest.  I  also  advise  that  complaint  at  once  be  made 
to  the  Interstate  Commerce  Commission  that  the  car- 
riers in  question  refuse  to  reduce  their  through  rate 
to  the  sum  of  the  locals,  as  they  are  allowed  to  do 
upon  a  one-day  notice  under  Tariff  Circular  No.  5-A 
of  the  Interstate  Commerce  Commission.  In  Traffic 
Circular  No.  6- A  (Nov.  16,  1906),  the  Interstate  Com- 
merce Commission  makes  the  following  statement : 

' '  Many  informal  complaints  are  received  in  con- 
nection with  regularly  established  through  rates 
which  are  in  excess  of  the  sum  of  the  locals  be- 
tween the  same  points.  The  Commission  has  no 
authority  to  change  or  fix  a  rate  except  after  full 


1010 

hearing  upon  formal  complaint.  The  Commission 
announced  in  its  Tariff  Circular  No.5-a  of  October 
12,  1906,  a  rule  permitting  practically  immediate 
reduction  of  a  through  rate  which  is  higher  than 
the  sum  of  the  locals  between  the  same  points.  It 
is  believed  to  be  proper  for  the  Commission  to 
say  that  if  called  upon  to  formally  pass  upon  a 
case  of  this  nature  it  would  be  its  policy  to  con- 
sider the  through  rate,  which  is  higher  than  the 
sum  of  the  locals  between  the  same  points,  as 
prima  facie  unreasonable,  and  that  the  burden 
of  proof  would  be  upon  the  carrier  to  defend  such 
higher  through  rate." 


WHETHER  A  CONSIGNEE  CAN  CHANGE  PLACE  OF  DELIVERY 
OF  A  SHIPMENT  WHEN  SUCH  SHIPMENT  IS  SENT  F.  O.  B. 
FREIGHT  PREPAID. 

(Grand  Crossing  Tack  Co.,  December  11,  1906.) 

"On  Sept.  21st  we  loaded  and  billed  on  our 
order  from  consignee  at  Minneapolis,  Minn.,  one 
car  nails.  We  sold  the  goods  F.  0.  B.  Minneapolis 
and  deducted  the  regular  rate  of  freight  from 
Chicago  to  Minneapolis  from  our  invoice  to  them, 
telegraphing  them  car  number;  as  soon  as  they 
received  car  number  from  us  they  telegraphed 
.  agent  of  the  railroad  (in  whose  possession  car 
was)  to  divert  destination  of  car  to  Milwaukee, 
Wis.,  which  takes  a  cheaper  freight  rate  than  Min- 
neapolis. 

Will  you  kindly  inform  us  if  this  is  legal,  as  we 

virtually  billed  and  hold  receipt  from  railroad  for 

the  destination  of  car  at  Minneapolis.    You  have 

no  doubt  rendered  an  opinion  on  this  at  some  past 

time,  but  we  are  unable  to  locate  it." 

In  the  absence  of  other  qualifying  circumstances,  the 

prepayment  of  freight  by  the  consignor,  and  a  sale 

f.  o.  b.  destination,  constitute  the  carrier  the  agent  of 

the  consignor,  and  the  title  to  goods  shipped  remains 

in  him  until  delivery  to  the  consignee.   The  allowance 

of  freight  by  the  consignor  to  be  deducted  from  the 


purchase  price  is  the  same  in  legal  effect  as  a  prepay- 
ment by  the  consignor.  Whether  the  title  to  goods 
passes  upon  the  delivery  to  the  carrier  is  primarily  a 
question  of  intention  to  be  deduced  from  the  contract 
and  from  all  the  facts  and  circumstances  of  the  case. 
As  a  general  rule,  there  being  no  limiting  circum- 
stances, delivery  to  a  carrier  is  a  delivery  to  the  con- 
signee, the  carrier  being  considered  as  the  agent  of 
the  consignee.  But  if  the  vendor  undertakes  to  make 
a  delivery  at  a  distant  place,  thus  assuming  the  risks 
of  carriage,  the  carrier  is  the  vendor's  agent,  and  in 
the  absence  of  other  circumstances  the  title  to  the  goods 
remains  in  the  consignor.  This  may  occur  where  goods 
are  sent  f.  o.  b.  destination,  as  in  the  present  case,  or 
sent  on  approval,  or  with  privilege  of  examination. 

In  the  present  case,  inasmuch  as  the  consignor  paid 
the  freight  and  the  goods  were  sold  "f.  o.  b."  Min- 
neapolis, the  title,  in  the  absence  of  other  circum- 
stances, would  remain  in  the  consignor.- 

The  authorities  upon  this  question  are  referred  to  in 
my  opinion  of  October  24th,  1903,  to  American  Steel  & 
Wire  Co.,  to  which  I  refer. 

While  the  goods  are  in  transit  the  owner  may  at  any 
time  instruct  the  carrier  to  change  their  destination. 
The  question  remains  whether  the  consignee  can  do  so 
where  the  title  is  in  the  consignor,  as  above  stated. 

In  L.  &  N.  W.  Co.  v.  Bartlett,  7.H.  &  N.,  400,  de- 
cided by  the  Court  of  Exchequer  in  1861 ,  the  facts  were 
as  follows : 

The  plaintiff  sold  wheat  by  sample,  to  be  delivered  to 
the  purchaser  at  his  mill.  The  wheat  was  shipped 
over  the  defendant's  railway.  On  the  arrival  of  the 
wheat  at  a  station  two  miles  from  the  mill  the  defend- 
ants kept  it  there  in  consequence  of  instructions  given 
to  them  by  the  consignee  to  the  effect  that  wheat  ar- 
riving for  him  at  the  station  should  not  be  forwarded 
to  the  mill  without  his  written  order.  The  plaintiff 
had  no  knowledge  of  these  instructions.  The  consignee 
examined  the  wheat  at  the  station,  but  refused  to  al- 
cept  it,  and  while  it  remained  there  it  deteriorated  in 
quality  and  value.  Plaintiff  sued  the  railroad  on  ac- 


1012 

count  of  its  failure  to  deliver  to  the  mill  of  the  con- 
signee.   Pollock,  C.  B.,  said: 

"It  is  clear  that  a  consignee  may  receive  the 
goods  at  any  stage  of  the  journey,  and  though  the 
consignor  directs  the  carrier  to  deliver  them  at  a 
particular  place,  there  is  no  contract  by  the  carrier 
to  deliver  at  that  place  and  not  elsewhere.  The 
contract  is  to  deliver  there  unless  the  consignee 
shall  require  the  goods  to  be  delivered  at  another 
place.  Here  the  wheat  was  delivered  at  the  place 
where  the  consignee  desired  it  to  be  delivered,  and 
therefore  the  carrier  is  not  liable." 
Bramwell,  B.,  said : 

"I  am  of  the  same  opinion.  I  cannot  think  that 
the  contract  between  the  parties  is  not  only  an  af- 
firmative contract  to  deliver  at  the  mill,  but  also 
a  negative  contract  not  to  deliver  elsewhere.  It 
would  probably  create  a  smile  anywhere  but  in  a 
court  of  law,  if  it  were  said  that  a  carrier  could 
not  deliver  to  the  consignee  at  any  place  except 
that  specified  by  the  consignor.  The  goods  are 
intended  to  reach  the  consignee,  and  provided  he 
receives  them  it  is  immaterial  at  what  place  they 
are  delivered.  The  contract  is  to  deliver  the  goods 
to  the  consignee  at  the  place  named  by  the  con- 
signor unless  the  consignee  directs  them  to  be  de- 
livered at  a  different  place.  That  being  so,  all 
difficulty  arising  from  the  Statute  of  Frauds  is  at 
an  end.  If,  indeed,  it  could  be  shown  that  the  con- 
signor would  be  prejudiced  by  a  delivery  at  any 
other  place  than  that  named,  there  might  be  some 
reason  for  implying  a  contract  to  deliver  at  that 
precise  place  and  no  other.  But  still  I  should 
think  that  immaterial,  for  how  can  a  carrier's  lia- 
bility be  affected  by  the  consideration  whether  or 
not  there  was  a  written  contract  between  the  con- 
signor and  consignee!  It  seems  to  me  that  in  no 
point  of  view  is  it  material  to  inquire  whether  the 
consignor  can  maintain  an  action  against  the  con- 
signee. But  I  cannot  help  thinking  that  the  con- 
signor is  not  worse  off  than  he  would  have  been  if 


1013 

the  contract  had  been  strictly  performed ;  because, 
whatever  right  of  rejection  the  consignee  had,  or 
within  whatever  time  he  was  bound  to  reject,  he 
has  neither  more  nor  less  than  he  would  have  had 
if  the  wheat  had  been  delivered  at  his  mill.  For 
these  reasons  I  think  that  the  appeal  should  be 
allowed." 

Wilde,  B.,  said : 

"I  am  of  the  same  opinion.  I  think  that  a  con- 
signee may  at  any  time  dispense  with  the  delivery, 
which  the  consignor  has  contracted  for  with  the 
carrier,  at  a  particular  place,  by  receiving  the 
goods  which  are  the  subject  of  the  contract  at  some 
other  place.  That  indeed  was  scarcely  denied  as  a 
general  proposition,  and  much  absurdity  would 
follow  if  it  were  not  so. ' ' 

In  Hutchinson  on  Carriers  (2d  Ed.),  Sec.  394,  it  is 
said: 

' '  The  owner  of  the  goods  may  at  any  time  change 
his  instructions  to  the  carrier  as  to  their  destina- 
tion, and  may,  if  he  chooses,  countermand  his  pre- 
vious orders  in  regard  to  them;  and  this  he  may 
do  at  any  time  during  the  transit.  But  the  con- 
signee is  the  presumptive  owner,  and  unless  the 
carrier  is  advised  that  the  consignor  has  not  parted 
with  his  title,  and  that  it  is  to  vest  in  the  consignee 
only  upon  the  performance  of  certain  conditions, 
as,  for  instance,  the  payment  of  their  price,  a  de- 
livery at  any  place  appointed  by  the  consignee  will 
discharge  the  carrier  from  his  liability,  even 
though  it  should  not  be  the  place  appointed  by  the 
consignor. ' ' 

And  in  Sec.  395  it  is  said : 

"But  where  the  carrier  is  informed  that  the 
goods  belong  to  another,  and  that  the  consignee  is 
merely  his  agent,  he  will  be  liable  to  such  owner, 
if,  after  the  goods  are  once  delivered  to  him  for 
shipment,  consigned  to  the  agent  at  a  particular 
destination,  he  permits  such  agent  to  take  back 
the  goods  or  delivers  them  to  another  upon  his 
order  at  the  place  of  shipment,  or  at  any  other 
place  than  the  one  to  which  they  are  consigned." 


1014 

In  Vol.  5,  Ency.  of  Law,  p.  215  (2d  Ed.),  the  rule  is 
thus  laid  down : 

"PRESUMPTION  OF  OWNERSHIP — CONSIGNEE  DI- 
RECTING CHANGE.  The  consignee  is  presumed  to  be 
the  owner  of  goods  in  transit,  and  the  carrier  is 
entitled  to  regard  him  as  such,  unless  it  has  actual 
notice  to  the  contrary,  or  unless  such  notice  is  to 
be  implied  from  the  manner  of  shipment,  as  when 
they  are  sent  C.  0.  D.,  a  delivery  to  the  carrier 
being  commonly  a  delivery  to  the  consignee's 
agent.  The  carrier  is  therefore  entitled  to  deliver 
at  a  different  place  and  time  from  that  stated  in 
the  directions  by  the  consignor  when  instructed 
to  do  so  by  the  consignee ;  it  has  a  right  to  regard 
him  as  the  true  owner  and  to  obey  his  instructions 
with  regard  to  delivery.  And  a  delivery  in  accord- 
ance with  such  instructions  will  relieve  it  from  lia- 
bility for  consequences  flowing  from  a  change  in 
the  place  of  delivery. 

NOTICE    THAT    CONSIGNEE    IS    NOT    OWNER.     But    if 

the  carrier  has  notice,  actual  or  implied,  that  the 
ownership  of  the  goods  is  not  in  the  consignee,  in- 
structions from  him  will  constitute  no  defense  to 
an  action  for  a  delivery  not  in  accordance  with  the 
original  instructions." 

In  Southern  Express  Co.  v.  Dickson,  94  II.  S.,  549,  an 
express  company  with  full  knowledge  that  certain 
goods  received  by  it  for  transportation  to  a  place  men- 
tioned in  its  receipt  were  the  property  of  the  shipper, 
delivered  them,  without  his  knowledge,  to  a  third  per- 
son at  the  place  of  shipment,  on  the  order  of  the  con- 
signee. It  was  held  that  the  carrier  was  liable  for  the 
value  of  the  goods. 
The  court  said : 

"We  are  not  called  upon  to  question  the  propo- 
sition that  a  consignee  of  goods  is  for  many  pur- 
poses deemed  to  be  the  owner  of  them,  and  may 
maintain  an  action  for  their  non-delivery.  1  Pars. 
Ship.,  269.  In  the  case  before  us  the  proof  was 
given;  and  the  jury  found  that  the  goods  did  not 
belong  to  the  consignees,  but  were  the  property  of 


1015 

the  shipper,  and  that  this  was  known  to  the  car- 
rier. The  question  is  rather,  where  it  is  known 
that  the  goods  are  the  property  of  the  shipper,  and 
have  been  shipped  by  him  for  delivery  to  the  con- 
signees as  his  agents  at  a  distant  place  can  the 
carrier  deliver  the  goods  to  such  consignees  or  to 
their  order  at  another  place,  or  without  starting 
them  on  their  journey?  We  think  the  rule  is,  that, 
where  the  consignor  is  known  to  the  carrier  to  be 
the  owner,  the  carrier  must  be  understood  to  con- 
tract with  him  only,  for  his  interest,  upon  such 
terms  as  he  dictates  in  regard  to  the  delivery,  and 
that  the  consignees  are  to  be  regarded  simply  as 
agents  selected  by  him  to  receive  the  goods  at  a 
place  indicated.  Where  he  is  an  agent  merely,  the 
rule  is  different." 
The  court,  after  referring  to  the  cases,  said : 

"The  numerous  cases  cited  by  the  plaintiff  in 
error,  to  the  effect  that  any  delivery  to  the  con- 
signee which  is  good  as  between  him  and  the  car- 
rier is  good  against  the  consignor,  are  cases  where 
the  carrier  has  no  notice  of  the  ownership  of  the 
property  other  than  that  implied  from  the  rela- 
tion of  the  parties  to  each  other  as  consignor  and 
consignee.  This  gives  to  the  consignee  the  implied 
ownership  of  the  property,  and  hence  justifies  the 
carrier  in  taking  his  direction  as  to  the  manner  of 
delivery.  In  addition  to  those  authorities,  refer- 
ence may  be  had  to  Sweet  v.  Barney,  23  N.  Y.,  325, 
where  a  bank  in  the  interior  of  New  York  sent  by 
express  a  package  of  money  directed  to  '  The  Peo- 
ple »s  Bank,  173  Canal  Street,  New  York.'  The 
package  was  delivered  to  an  agent  of  the  People's 
Bank  at  the  office  of  the  express  company  and  was 
stolen  from  such  agent. 

The  bank  in  the  interior  brought  its  action 
against  the  express  company,  and  the  question 
was,  whether  the  express  company  was  authorized 
to  deliver  the  package  at  any  other  place  than  173 
Canal  street.  The  court  held  that  as  there  was  no 
notice  to  the  express  company  that  the  money 


1016 

was  not  the  property  of  the  People's  Bank,  in 
the  City  of  New  York,  nor  any  circumstances  to 
weaken  the  presumption  that  the  money  belonged 
to  that  bank,  and  delivery  that  was  good  as  to 
that  bank  discharged  the  carrier. 

Of  the  character  mentioned  in  the  case  of  Lon- 
don &  Northwestern  Railroad  Co.  v.  Bartlett,  7 
H.  &  N.,  400,  which  is  much  relied  on  by  the  plain- 
tiff in  error.  The  consignee  in  that  case  was  the 
purchaser  of  the  wheat  in  question,  and  conse- 
quently any  delivery  to  him.  or  his  order,  wher- 
ever it  might  be,  would  be  a  discharge  to  the  car- 
rier. ' ' 

And  in  Lee  v.  Kimball,  45  Me.,  172,  it  was  held 
that  if  a  consignee  in  a  bill  of  lading  sells  the  goods 
before  their  arrival,  and  assigns  the  bill  of  lading  to 
the  vendee  in  good  faith,  the  right  of  the  vendor  to 
stop  in  transit  upon  the  insolvency  of  the  vendee  is 
thereby  divested. 

In  the  present  case  there  is  nothing  submitted  to 
me  to  indicate  that  the  carrier  knew  that  the  consignor 
remained  the  owner  of  the  goods.  The  fact  that  the 
goods  were  shipped  f.  o.  b.  destination  was  a  matter 
of  private  contract  between  consignor  and  consignee, 
and  was  presumably  not  known  to  the  carrier.  Un- 
der the  rule  laid  down  in  the  above  cases  the  carrier 
was  justified,  in  the  absence  of  such  knowledge,  in 
delivering  or  reshipping  in  accordance  with  the  direc- 
tion of  the  consignee.  I  pass  in  this  opinion  only  upon 
the  right  of  the  consignee  under  the  stated  facts  to 
change  the  place  of  delivery. 


WHETHER,  UNDER  THE  GARNISHMENT  ACT  OF  ILLINOIS,  IT 
IS  NECESSARY  FOR  THE  PLAINTIFF  TO  OBTAIN  JUDGMENT 
AGAINST  THE  DEFENDANT  BEFORE  MAKING  DEMAND  UPON 
THE  EMPLOYER. 

(J.  W.  Butler  Paper  Co.,  December  11,  1906.) 

"We  are  in  doubt  as  to  the  meaning  of  chapter 
62  of  the  Garnishment  Act  and  would  be  obliged 
to  you  for  an  opinion  on  said  section.  What  we 


1017 

particularly  wish  to  know  is,  whether  it  is  not 
necessary  for  the  plaintiff  to  obtain  judgment 
against  the  defendant  before  making  the  demand 
upon  the  employer. 

The  statute  says:  'Before  bringing  suit,  a  de- 
mand in  waiting  shall  first  be  made  upon  the 
wage  earner  and  the  employer  for  the  excess  above 
herein  exempt  and  a  copy  of  such  demand  shall 
be  left  with  him  and  with  the  employer,  etc. '  Does 
this  refer  to  the  original  suit  of  the  garnishment 
suit?" 

Sec.  14  of  the  Garnishment  Act,  as  amended,  pro- 
vides : 

"The  wages  for  services  of  a  wage  earner  who 
is  the  head  of  a  family  and  residing  ivith  the  same 
to  the  amount  of  fifteen  (15)  dollars  per  week  shall 
be  exempt  from  garnishment.  All  above  the  sum 
of  fifteen  (15)  dollars  per  week  shall  be  liable  to 
garnishment. 

' '  Every  employer  shall  pay  to  such  wage  earner 
such  exempt  wages  not  to  exceed  the  sum  of  fif- 
teen (15)  dollars  per  week  of  each  week's  wages 
earned  by  him,  when  due,  upon  such  wage  earner 
making  and  delivering  to  his  employer  his  affi- 
davit that  he  is  such  head  of  a  family  and  residing 
with  the  same,  notwithstanding  the  service  of 
any  writ  of  garnishment  upon  such  employer  to 
abide  the  event  of  the  garnishment  suit.  If  the 
amount  of  wages  subject  to  garnishment  shall  not 
equal  the  costs  of  the  garnishment,  whatever  re- 
mains of  costs  shall  be  paid  by  the  person  bring- 
ing the  garnishment  proceedings,  and  judgment 
shall  be  entered  therefor  against  him,  and  no  judg- 
ment for  any  such  deficiency  of  costs  shall  go 
against  the  wage  earner  or  the  defendant.  No  em* 
ployer  so  served  with  garnishment  shall  in  any 
case  be  liable  to  answer  for  any  amount  not  earned 
by  the  wage  earner  at  the  time  of  the  service  of 
the  writ  of  garnishment.  Before  bringing  suit  a 
demand  in  writing  shall  first  be  made  upon  the 
wage  earner  and  the  employer  for  the  excess 


1018 

above  the  amount  herein  exempted,  and  a  copy 
of  such  demand  shall  be  left  with  him  and  with  the 
employer  having  endorsed  thereon  the  time  of 
service,  at  least  twenty-four  hours  previous  to 
bringing  such  suit.  Such  notice  shall  be  filed  with 
the  justice,  or  clerk  of  the  court,  with  the  manner 
and  time  of  the  service  of  the  same  endorsed  there- 
on, and  the  return  duly  sworn  to  before  some  offi- 
cer authorized  to  administer  oaths,  before  it  shall 
be  lawful  to  issue  a  summons  in  such  case,  or  to 
require  an  employer  to  answer  in  any  gamishee 
proceedings.  Any  judgment  rendered  without  said 
demand  being  served  upon  the  wage  earner,  and 
so  proven  and  filed  as  aforesaid  shall  be  void.  The 
excess  of  wages  shall  be  held  by  the  employer, 
subject  to  garnishment  by  the  creditor  serving 
demand,  for  five  (5)  days  after  such  service  of 
demand. ' ' 

The  requirement  in  the  statute  as  to  the  making  of 
a  demand  applies  only  to  the  garnishment  proceed- 
ings. It  is  not  necessary  to  serve  a  notice  on  the  em- 
ployer when  a  judgment  is  sought  against  the  employe 
in  the  original  suit.  The  employer  is  not  a  party  to 
such  a  suit,  and  is  not  concerned  therewith.  If,  how- 
ever, a  judgment  is  rendered  in  any  suit,  and  garnish- 
ment proceedings  are  commenced  on  such  a  judgment, 
then,  before  the  garnishment  suit  can  be  maintained, 
a  demand  must  be  made  on  both  employer  and  employe, 
in  accordance  with  the  statute.  Before  instituting  gar- 
nishment proceedings,  the  plaintiff  must  obtain  judg- 
ment against  the  employe,  but  in  attachment  proceed- 
ings garnishees  are  summoned  before  judgment,  and  in 
order  that  a  garnishee  in  an  attachment  proceeding 
may  be  held  in  such  proceedings,  the  plaintiff  must  sus- 
tain his  attachment  and  recover  a  judgment  on  the 
merits.  In  my  opinion,  the  statute  above  quoted  does 
not  refer  to  attachment  proceedings,  so  called,  but  only 
to  "garnishment"  suits. 

It  should  be  borne  in  mind  that  the  garnishment  act 
applies  only  to  such  employe  who  is  "the  head  of  a 
family,  and  residing  with  the  same." 


INDEX  TO  NAMES. 


Acme    Harvester    Co 68,    77 

Aermotor    Co 47 

Allen,   William    D 140,  875 

Amazon  Knitting  Company 478 

American  Can    Co 210 

American  Foundry    and    Furnace    Company 289 

American  Soda    Fountain    Co 44,    54 

American  Steel  &  Wire  Co 235 

American  Strawboard    Co ; 31,  80,  41(5 

American  Tag    Company 780 

Art   Bedstead   Co.  ..." 130 

Audit  Company  of  New  York 15 

Aurora  Automatic  Machinery  Co 834 

Austin   Manufacturing   Company 277 

B 

Barnard  &  Leas  Mfg.  Co 333 

Barnes  Company,  B.  F 753 

Barnhart  Bros.  '&  Spindler 206,  750 

Barrett    Mfg.    Company 414,  551,  592,  864,  888 

Baum   Company,   C.   F :  .  .  .          217 

Beacon  Falls  Bubber  Shoe  Co 233,  272,  841 

Becker  Company,  L.  A 571 

Becker,  Mayer  &  Co 88 

Beggs  Manufacturing  Company 380,  582 

Beidler,    Francis 201,  221 ,  605 

Belding  Bros.  &  Co 17 

Benedict  &  Co.,  George  H 71 

Bissel  Company,  F 1003 

Block-Pollak    Iron    Company 366,  625,  967 

Borden  's  Condensed  Milk  Company 897 

Born  &  Co.,  M 501,  813 

Brunswick-Balke-Collender  Co 432,  439 

Bunge  Co.,  William  H 721 

Burley  &  Tyrrell 762 

Burns  Lumber  Co.,  John  E 415,  937 

Butler  Paper  Co.,  J.  W 1016 

Butler  Street  Foundry  &  Iron  Co 154 

C 

Cady  &  Co.,  E.  J 364 

Challenge   Machinery   Co 16,    33 

Chicago  Flexible  Shaft  Company 657 

Chicago  Flour  Company 679,  716 

Chicago  Specialty  Box  Co 857 

Chicago  Varnish   Company 349,  638 

Climax  Manufacturing  Co 736 

Cole  Mfg.   Co 115 

1019 


1020 

Comptograph    Company 652 

Crane  Co 396 

Curtain  Supply  Co 155 

D 

Darling  &  Co 325 

Deere  &  Co , 249 

Deere  &  Weber   Co 1008 

Dillon-Griswold  Wire  Co 295 

E 

Earle  Mfg.   Co.,  F.  H 486,  570,  953 

Eclipse  Gas  Stove  Co 84,  542 

Edwards-Stamvood   Shoe   Co 123 

Electric  Appliance  Company 523 

Emerson  Manufacturing  Company 438 

Emmerich  &  Co.,  Chas 186,  234,  432,  441 

F 

Fairbank  Company,  N.  K 247 

Foley  Mfg.  Co : 56,  873 

G 

Garden  City  Sand  Company 586 

Glaser,  Kohn  &  Co 574 

Goetzmann,  A.  L 861 

Goss  Printing  Press  Co 520 

Grand   Crossing  Tack  Co 1010 

Grant  Chemical  Company,  J.  C 335 

Gregory   Electric   Company 338 

H 

Hartman  Furniture   Company. . 783 

Hartman,  Hay  &  Reis 670,  730 

Hasler  Company,  E.  L 829 

Havemeyer  &  Co.,  W.  A 654 

Heafer  Tile  Company,  Edgar  M 992 

Heath  &  Milligan  Mfg.  Co 382,  409,  700,  808 

Henning  Company,  William 687 

Heroy  &  Marrenner , 48 

Heywood  Bros.   &  Wakefield   Co 46 

Hibbard,   Spencer,   Bartlett   &   Co 75,  83, 169,  214,  216,  899,  902 

Hines  Lumber  Company,  Edward 41,  386,  403 

Hoyt  Company,  W.  M 427 

Hunt,  Helm,  Ferris  &  Co 475,  685,  838 

Hunt  &  Co.,  Robert  W 433 

Huss  &  Edler 159 

I 

Illinois  Brick   Company 525 

Illinois  Glass    Company 957 

Illinois  Maintenance    Company 282,  320,  417 


1021 

Illinois  .Malleable  Iron  Co 154,  208,  384,  472 

Illinois  Manufacturers'    Association 1,  5,  8, 11,  51,  58,  85,  90, 

93,95,111,113,117, 

119,  176,177,182,198, 

212,  222,  242,  326,  354, 

373,  394,  417,  419,  439, 

.    460,  489,  546,  914,  922, 

931, 993, 1000 

Illinois  Sewing  Machine  Company 41,  392,  681,  845 

Illinois  Zinc  Co 36 

Inderriedden  Company,  J.  B 436 

Inland  Steel  Co 73 

Iroquois   Iron   Company 811 

K 

Kaestner  &  Co 320 

Kellogg  Switch  Board  &  Supply  Co 213,  642 

Kewanee  Boiler  Company 633 

King  &   Co.,  W.  0 307,  480,  481,  599 

Kingman  Plow  Co 263,  274 

Kinley  Mfg.   Co 151 

Kuh,  Nathan  &  Fischer  Company 710 

L 

La  Bastie  Glass  Company 597 

Latrobe  Steel  &  Coupler  Company 13,  215 

Levy  &  Co.,  Max 204 

Lord  &  Bushnell  Company 987 

Ludowici  Eoofing  Tile  Company 157 

M 

Manierre-Yoe  Syrup  Company 560 

Manz  Engraving  Co.,  J 12 

Marquette  Cement  Mfg.  Co 385 

Marshall  and  Huschart  Machinery  Co 767 

Marsh  &  Bingham  Company,  The 558 

Mason  &  Co.,  E.  T 132 

Mathis  Brothers  Company 397 

Maxwell  &  Co.,  S.  A 290,  351 

McClurg  &  Co.,  A.  C 775 

McNeil  &  Higgins  Company 471 

Hears  &  Co.,  Charles  H 590 

Merkle-Wiley  Broom  Company 843 

Miller  &  Co.,  E.  M 553,  621 

Moline  Plow   Co 202 

Moloney-Bennett  Belting  Co 943 

Monmouth  Mining  &  Mfg.  Co 69 

Monmouth  Pottery  Co 391,  404,  424,  770 

Montgomery  Ward  &  Co 253,  284 

Morden  Frog  &  Crossing  Works 637 

Mt.  Vernon  Car  Manufacturing  Company 288 

N 
Norton  &  Co 3, 672 


1022 


O  'Gara  Coal  Co 734 

Oliver  Typewriter  Co 53,  79,  105,  280,  281,  815, 

446,659,754 

Oppenheimer  &  Co.,  S 567 

Osgood  Company ' 302 

P 

Palmer,  Fuller  >  &  Co 106 

Parlin  &  Orendorff  Co 26,  62,  66,  70,  96, 122, 

243,599,618,802 

Pate  Lumber  Company,  D.  S 629 

Peru  Plow  &  Wheel  Co 59 

Pilcher-Hamilton    Company 909 

Pitkin  &  Brooks 167,  518 

Press  Co.,  Adam  J 121 

R 

Bacine-Sattley   Company 322 

Eawleigh  Medical  Company,  W.  T 792 

Eeid,  Murdoch  &  Co 369,  604,  838,  878 

Kice,    W.    H 138 

Eichardson  &  Co.,  0.  W 946 

Eitchie  &  Co.,  W.'C 42 

Eitchie,  W.  E 803 

Eockford  Watch  Co.,  Ltd 713 

Eock  Island  Plow  Company 346,  626,  649 

Eoos  Mfg.  Co 107 

Eose  &  Company,  Edward 313,  855 

Eosenow  &  Co 319 

Eubber   Paint   Company 469,  498,  547,  555 

Eueckheim  Bros.  &  Eckstein 308 

Eyerson  &  Son,  Joseph  T 101,  378,  615,  849 

S 

St.  Charles  Condensing  Company 569 

St.  George  Mg.  Co.,  E.  D 50 

Sandwich  Manufacturing  Co 572 

Sanf ord  Mfg.  Co 34,  491 

Sargent  &  Co.,  C.  H 595,  828 

Sattley  Manufacturing  Company 105 

Scully  Syrup  Company,  D.  B 306 

Sefton  Mfg.  Co.,  J.  W 78, 123, 126 

Selz,    Schwab    &    Co 185,  192,  503,  512,  883 

Senour  Manufacturing  Company 165 

Sherwin-Williams    Co 406 

Shonk  Co.,  Chas.  W 102 

Shotter  Company,  The  S.  P 422,  444 

Simonds  Manufacturing  Company 104 

Skandia  Furniture  Co 98,  218 

Smith  &  Sons  Company,  E.  P 607 

Spielman   Bros.    Company 824,  853 

Squire  Dingee  Company 371 

Standard  Wheel  Company 507 


1023 

Standard  Varnish  Works 951 

Steele-Wedeles   Co 118 

Stockton  Company,  Joseph 935 

Streator  Bottle  &  Glass  Company 186 

Streator  Clay  Mfg.  Co 207 

Stromberg,  Allen  &  Co 817 

Strube  Machine  Works 557 

Studebaker  Bros.   Manufacturing   Company 429,  470,  576 

Sturges  &  Burn  Manufacturing  Company 300 

T 

Thayer  &  Jackson  Stationery  Co 179 

Thompson  &  Taylor  Spice  Company 389,  806 

Tilt  Shoe  Company,  J.  E 341 

Tolman   Company,  John  A 663,  666 

Tonk  Manufacturing  Company 233,  603 

Tosetti  Brewing  Company,  Ernest 298,  311 

U 

Union  Special  Sewing  Machine  Co 76 

United  States  Pharmacal  Company 609 

U.  S.  Wind  Engine  &  Pump  Co 112 

W 

Wallin  &  Sons,  C.  C 12 

Wahvorth  &  Neville  Mfg.  Co 963 

Watson  Co.,  Geo.  E 235,  459 

Weaver  Organ  &  Piano  Co.,  The 917 

Weir  &  Craig  Mfg.  Co 200 

Weller  Mfg.  Co 509 

\Vestern  Cottage  Piano  and  Organ  Company 317 

Western  Salvage  Wrecking  Agency 74 

Western  Stoneware   Company 983 

Western  United  Gas  &  Electric  Company 819 

Wheeler  &  Wilson  Mfg.  Co 515 

Whitcomb  Company,  Geo.  D 324 

Whiting  Foundry  Equipment  Co 59,  388,  395 

\Vilcox  Manufacturing  Company 348 

Wilder  &  Co 110 

Williams,  White  &  Co 565 

Wolf   Co.,  Fred   W 516 

Wrisley  Co.,  Allen  B 14,  133, 134 


INDEX. 


ACCOBD  AND  SATISFACTION.— Effect  of  sending  a  check  in 
full  settlement  of  an  account  where  amount  of  check  is 
less  than  amount  due 371 

ACCOUNTS. — What  constitutes  a  valid  and  enforceable  guar- 
antee of 272 

ACTIONS. — Eight   to  recover   on  implied  contract  where  express 

contract   exists 332 

ADVEBTISING. — Eight  of  tenant  to  lease  side  of  building  for 

advertising  purposes 883 

Liability  in  Illinois  under  New  York  statute  prohibiting 
the  use  of  name,  photograph  or  picture  of  any  person  for 

advertising  purposes 301 

Eight    of   manufacturer  to   use   fac-simile   of   exposition 

awards  for  advertising  purposes 541 

Whether  use  of  aluminum  discs  used  for  advertising  con- 
stitutes   counterfeiting 500 

AGENCY. — Liability  of  employer  on  contracts  made  by  his  em- 
ployees or  agents 511 

Whether  lumber  broker  is  agent  of  his  principal  so  as  to 

bind  latter  by  his  contract 629 

•Authority  of  commission  salesmen  to  make  contracts....       201 
Liability  of  firm  on  orders  taken  by  salesmen  working  on 

commission   basis 221 

Power  of  traveling  salesmen  to  bind  employer  on  contract.          78 
Liability  of  corporation  on  note  and  acceptance  issued  in 
name  of  corporation  by  officers  unauthorized  to  execute 

same    963 

Whether  salesman  has  power  to  endorse  principal's  name 

upon    checks 470 

Liability  of  a  parent  corporation  for  acts  of  the  managers 

of  subsidary  companies 750 

ALIENS. — The  Alien  Contract  Law  and  its  application 808 

ANNUAL  MEETING. — Necessity  of  Illinois  corporation  publish- 
ing a  notice  of  its  annual  meeting 753 

ANNUAL   EEPOBTS. — Necessity   of   making   annual   reports   to 

Secretary  of  State  and  effect  of  failure  to  do  so 436 

ANTI-TBUST  AFFIDAVIT.—  (See  Corporations.) 

Whether  necessary  to  file  anti-trust  affidavit  in  absence  of 

notice  from  Secretary  of  State 841 

Necessity  of  filing  annually 133 

Form  of  same  where  corporation  is  doubtful  as  to  whether 

it  has   violated   law 183 

1025 


1026 

Whether  Illinois  corporation  can  make  anti-trust  affi- 
ravit  when  it  has  agreement  in  reference  to  price,  etc., 
with  New  York  corporations  having  same  stockholders, 

directors    and   officers   as   Illinois   corporation 1000 

Whether  foreign  corporations  must  make 155 

ANTI-TBUST   STATUTES.— Constitutionality  of 381 

Whether  labor  and  labor  unions  within  provisions  of 408 

Extra  territorial  effect  of  Illinois  anti-trust  statute 1000 

Validity  of  agreements  fixing  price  on  commodities  under 
Illinois  statutes 571 

ARCHITECTS. — Liability  for  installation  of  machinery  that  does 

not  prove  satisfactory 433 

ASSIGNMENT  OF  WAGES.— (-See  Employment.) 

In  reference  to  assignment  of  wages  under  Illinois  law  of 

1905 817 

Necessity  of  employer  recognizing  assignment  of  wages 

when  made  by  power  of  attorney 519 

Sufficiency  of  notice  to  employer  of  assignment  of  wages 

by  employee 384 

Right  of  minor  to  assign  wages 234 

ASSIGNMENTS. — Whether  foreign  corporation  which  has  not 
complied  with  laws  of  Kansas  can  enforce  a  claim  against 
a  resident  by  assigning  the  name  to  an  individual  and 
bringing  suit  in  his  name 792 


B 

BAGGAGE.— (See  Carriers.) 

BAILMENTS. — Liability  of  traveling  salesman  for  loss  of  horse.  .       380 
Liability  of  bailee  for  goods  destroyed  while  in  process 
of  repair 469 

BANKRUPTCY. — Validity    of    unrecorded    mortgage    against    a 

trustee  in  bankruptcy 783 

BANKS. —  (See  Bills  and  Notes,  Negotiable  Instruments.) 

Liability  for  failure  to  notify  payee  of  non-payment  of 

note    233 

Liability  of  collecting  banks 780 

Liability  of  banks  for  proceeds  of  checks  forwarded  for 
collection  when  checks  are  sent  to  bank  upon  which  they 

are    drawn 581 

Whether  proceeds  of  collection  of  note  made  payable  at 
certain  bank  is  a  trust  fund  for  the  holder  of  the  paper 
when  bank  fails  after  making  collection;  the  rule  in 

Texas    576 

Rights  of  a  depositor  of  paper  for  collection  where  paper 
has  been  sent  by  forwarding  bank  to  another  bank  than 
the  bank  on  which  it  is  drawn  and  the  collecting  bank 

fails  before  the  proceeds  of  the  paper  are  obtained 780 

Liability  for  failure  to  protest  note  sent  to  it  for  collec- 
tion    233 


1027 

Liability  of  corporation  for  note  of  third  person  which 
it  has  sold  to  a  bank  and  guaranteed  the  payment  thereof, 
when  the  maker  pays  the  note  to  a  collecting  bank  and  the 
latter  does  not  remit 386 

BENZINE.—  (See  Insurance.) 

BILLS  AND  NOTES.—  (See  Banks.) 

Whether  notes  signed  by  wife  as  accommodation  surety 
for  her  husband  in  Kentucky  and  payable  in  Illinois  are 

enforceable  against  wife  under  Kentucky  statutes 899 

What  laws  are  applicable  when  the  note  is  executed  in  one 

state  and  payable  in  another 899 

BILLS  OF  LADING.— (-See  Carriers,  Sales.) 

BLACK  LISTING.— (-See  Conspiracy,  Boycott.) 

BOILER  MANUFACTURING.— (-See  Independent  Contractor.) 

BOILERS.—  (See  Cities,  Steam  Engineers.) 

Validity  of  rules  as  to  size  of  blow-off  pipes 515 

Right  of  city  to  compel  manufacturer  to  change  steam 
boilers  to  comply  with  rulings  of  board  of  inspectors ....  417 

BONUS  ACT  OF  PENNSYLVANIA.—  (See  Foreign  Corpora- 
tions. ) 

BOOK   ACCOUNTS.— Whether   book   accounts   subject   to   access- 

ments    685 

BOTTLES.— (-See  Trade  Marks.) 

BOYCOTT.— (See  Conspiracy;  Labor  Unions.) 

Liability  of  labor  union  for  boycott  against  particular 
goods  308 

BREAKAGE.— Claims  against  carrier  for 424 

BROKERS. — Whether  broker  liable  for  return  of  unearned  pre- 
miums on  cancelled  policies 441 

Whether  insurance  broker  entitled  to  renewal  commissions 
where  policies  renewed  through  another  broker 441 

BULK  SALES.— Effect  of  Bulk  Sales  Law  in  Illinois  and  liability 

of  an  attaching  creditor  under  the  law 662 

Presumption  of  fraud  when  sales  made  without  com- 
pliance with  bulk  sales  law  and  whether  sales  are  con- 
clusively fraudulent  or  only  prima  facie 666 

BURDEN  OF  PROOF.— (See  Bailments.) 

C 

CAPITAL. — What  constitutes 280 

CARBON  COPIES. — Whether  carbon  copies  of  letters  admissible 

in  evidence  the  same  as  letter  press  copies 378 

CARRTERS — (See  Connecting  Carriers;  Carriers  by  Water ;  Consti- 
tutional Law ;  Demurrage;  Express  Companies;  Interstate 
Commerce  Act.) 

The  subject   is  classified   under  the   following  sub-heads: 
(1.)     BAGGAGE    (p!027). 
(2.)     BILLS  OF  LADING  (1027). 
(3.)     CONSIGNOR  AND  CONSIGNEE  (1027). 
(4.)     DELAY  AND  DAMAGE  THEREFOR  (1028). 


1028 

(5.)  DELIVERY  OF  GOODS  BY  CARRIER  (1028). 

(6.)  DEMURRAGE  OR  CAR-SERVICE  CHARGES   (1029). 

(7.)  DISCRIMINATION  BY  CARRIERS  (1029). 

(8.)  EMBARGO  (1029). 

(9.)  FACILITIES,  EQUIPMENT  AND  CARS  (1029). 

(10.)  F.  O.  B.  SHIPMENTS  (1031). 

(11.)  LIABILITY  FOR  Loss  OR  DAMAGE  (1031). 

(12.)  LIMITATION  OF  LIABILITY  (1031). 

(13.)  BATES,  CHARGES  AND  CLASSIFICATIONS  (1032). 

(14.)  EECEIPT  AND  CARRIAGE  OF  GOODS  (1033). 

(15.)  EOUTING  OF  SHIPMENT  (1033). 

(16.)  STOPPAGE  IN  TRANSIT  (1033). 

(170  SWITCHING  (1033). 

(18.)  TICKETS  AND  REDEMPTION  OF  TICKETS  (1034). 

CARRIERS.—- 

(1.)     BAGGAGE: 

Liability  of  initial  carrier  for  baggage  where  loss  occurs 

on  line  of  connecting  carrier 608 

Right  of  carrier  to  limit  its  liability  for  baggage 762 

Whether  carrier  liable  for  time  of  salesman  lost  on  ac- 
count of  delay  in  transportation  of  baggage 502 

Liability  of  carrier  for  loss  of  salesman's  samples 88 

Whether   carrier   liable   for   loss   or   damage   to   baggage 
where  trunks  contain  samples 514 

(2.)     BILL  OF  LADING: 

Obligation  to  give  bill  of  lading 326 

Effect  of  uniform  bill  of  lading  and  right  of  carriers  to 

adopt  same 326 

The  uniform  bill  of  lading  and  its  conditions 506 

Title  to  goods  where  draft  attached  to  bill  of  lading 235 

Whether  title  to  goods  in  transit  passes  by  payment  of 

draft   attached   to   bill    of   lading 478 

Effect  of  attaching  bill  of  lading 193 

Effect  of  "order  and  notify"  bill  of  lading 568 

Effect  of  stamping  "owner's  risk"  on  shipping  receipts.  .       570 
Whether  relief  from  liability  when  bill  of  lading  or  ship- 
ping receipt  is  stamped  "received  at  owner's  risk  of  dam- 
age or  breakage  " 508 

Reserving  title  in  shipper  to  taking  bill  of  lading  in  his 

name     193 

Delivery  of  bill  of  lading  passing  title  to  goods  in  transit       193 

(3.)     CONSIGNOR  AND  CONSIGNEE: 

Fight  of  consignor  to  change  destination  of  goods  while  in    v 

transit    1003 

Right   of   consignee   to   control   shipments   when   title  to 

same  is  in  consignor 1010 

Whether  prepayment  of  freight  by  consignor  throws  risk 

of  transit  upon  him 216 

Effect  of  prepayment  of  freight  by  consignor  upon  title  of 
goods    638 


1029 

Effect  of  various  freight  allowance  phrases  as  imposing 

risks  of   transit   on   consignor 214 

Violation  of  instructions  of  consignee  as  operating  to  re- 
tain title  in  consignor  during  transit 193 

Mistake  in  address  as  imposing  risk  of  transit  on  vendor 

or  upon  shipper 193 

Eesponsibility  of  consignor  when  goods  shipped  C.  O.  D.  .       235 
Liability  of  consignee  where  draft  payable  on  arrival  and 

inspection    435 

Liability  of  consignor  for  freight  charges  when  consignee 

refuses  to  accept  goods  or  becomes  bankrupt 585 

Where  vendor  bound  to  send  goods  to  purchaser,  title  re- 
mains in  vendor  until  delivered 193 

(4.)     DELAY  AND  DAMAGES  THEREFOR: 

Liability    for    delay    and    measure    of    damages    there- 
for  95,  397,  614,  678 

Liability  of  carrier  for  damages  arising  from  delay  of 

goods  in  transit 397 

Liability  for  delay  in  delivery  of  shipments  and  measure 

of    damages    therefor 614 

Liability  for  goods  destroyed  by  act  of  God  where  goods 
would   have   been    saved   but    for   unreasonable   delay   of 

carrier    193 

Liability  of  initial  carrier  for  delay  occurring  on  line  of 

connecting   carrier 277,  397 

Liability  of  carrier  for  delay  caused  by  mobs 215 

Liability  for  goods  frozen  in  transit  when  delivery  is  de- 
layed   . , 298 

Whether  carrier  liable  for  time  of  salesman  lost  on  ac- 
count of  delay  in  transportation  of  baggage 502 

(5.)     DELIVERY  OF  GOODS  BY  CARRIER: 

Place  where  carrier  must  make  delivery  to  consignee 366 

Whether  personal   delivery  to  consignee  required 218,855 

Duty  to  make  personal  delivery  to  consignee 855 

Delivery  to  carrier  is  ordinarily  delivery  to  consignee.  .  ..  193 
Whether  obligated  to  deliver  cars  upon  private  side-tracks 

connected  with  its  own  line 218 

Whether  can  be  coinpelled  to  deliver  on  side-track 366 

Cannot  be  compelled  to  deliver  beyond  own  termini 366 

Whether  initial  carrier  can  be  compelled  to  make  delivery 

on  terminals  of  connecting  carrier 922 

As  to  what  delivery  can  be  required  under  an  Interstate 

rate  to  Chicago 922 

Eesponsibility  of  for  delivery  of  shipment  after  instruc- 
tions from  consignor  not  to  deliver  to  consignee 943 

Duty  to  notify  consignees  of  arrival  of  freight. .  .107,  369,  585 
Duty  to  give  notice  to  consignor  of  arrival  of  goods.  .....       369 

Whether  carriers  by  water  must  give  notice  of  arrival  of 
goods    369 


3030 

Duty  of  carrier  to  notify  consignor  where  consignee  re- 
fuses to  accept  goods •. o85 

(6.)     DEMURRAGE  OR  CAR-SERVICE  CHARGES: 

Validity  of  48-hour  rule  as  to  free  time  for  loading  or  un- 
loading of  cars 69 

Eeasonableness  of  48-hour  period  of  detention  where  the 

cars  are  of  large  capacity 205 

Bight  to  exact  demurrage  charges  under  the  laws  of  the 
various  states 56,  819 

Lien  of  carriers  for  demurrage  charges 56,  819 

Eight  to  discriminate  in  respect  to  demurrage  charges..  69 

Liability  of  consignee  for  demurrage 603 

Whether  consignee  can   be  compelled   to  pay   demurrage 

accruing  at  point  of  shipment 589 

Demurrage  on  goods  detained  on  account  of  embargo ....  624 
Whether  carrier  can  refuse  delivery  on  private  side  tracks 

on  account  of  unpaid  demurrage  charges 218 

Eight  to  assess  car  service  or  demurrage  charges  without 

making  a  tender  of  the  cars 488 

Bight  of  a  carrier  to  assess  demurrage  charges  for  private 

cars 819 

(7.)     DISCRIMINATION  BY  CARRIERS: 

What  constitutes  unjust  discrimination 486 

Bight  to  compel  carrier  to  transport  goods  without  dis- 
crimination   592 

Bight  of  carrier  to  discriminate  in  the  use  of  its  tracks  or 
terminal  facilities 559 

Eight  to  discriminate  in  giving  of  depot  privileges 829 

Discrimination  in  the  matter  of  forwarding  cars  in  reliev- 
ing a  congestion  at  a  junction  point  as  a  result  of  an  em- 
bargo    734 

(8.)     EMBARGO: 

Effect  of  an  embargo  laid  by  carriers  against  transporta- 
tion of  goods 397 

Effect  of  an  embargo  against  receipt  of  freight  from  con- 
necting lines 559 

Discrimination  in  the  matter  of  forwarding  cars  in  reliev- 
ing a  congestion  at  a  junction  point  as  a  result  of  an  em- 
bargo    734 

(9.)     FACILITIES,  EQUIPMENT  AND  CARS: 

Duty  to  furnish  proper  equipment 552,  621 

Duty  to  supply  grain  doors  for  cars  used  for  the  shipment 

of   stoneware 983 

Duty  to  furnish  suitable  cars 427 

Duty  to  furnish  fifty  foot  furniture  cars 552,  621 

As  which  carrier  is  obligated  to  furnish  cars  in  the  case 

of  connecting  lines 550 

Whether  agreement  of  carriers  in  reference  to  equipment 
constitutes  pooling 621 


1031 

(10.)     F.  O.  B.  SHIPMENTS. —  (See  Sales.) 

Meaning  of  F.  0.  B 490 

F.    0.   B.    shipments   and   the   effect   of   equalization    of 

freight  rates 351 

Effect  of  sales  F.  0.  B.  upon  title  of  goods 638 

When  title  passes  from  seller  to  purchaser  where  goods 

sold  "  F.  O.  B.  common  shipping  point " 435 

In  whom  title  rests  where  goods  sent  "F.  0.  B.  destina- 
tion" or  on  approval  with  privilege  of  examination  or 

C.  O.  D 193 

Effect  of  a  contract  reserving  title  in  vendor  until  pay- 
ment where  goods  are  sold  F.  O.  B.  a  certain  point  there 

to  be  loaded  in  cars  with  other  goods 626 

Title  to  goods  in  transit  when  sold  ' '  coast  freight  al- 
lowed " 638 

As  to  who  is  responsible  for  goods  in  transit  in  case  of 

F.  O.  B.  shipments 963 

As  to  who  sustains  loss  on  goods  damaged  in  transit  where 

goods  are  sold  "F.  O.  B.  point  of  shipment" 236,  824,  853 

Liability  of  consignor  for  loss  in  transit  where  goods  sold 

F.  O.  B.  shipping  point 824 

Upon   whom  risk  of  transportation  of  goods  falls  when 

sold  "  F.  O.  B.  point  of  shipment " 853 

On  whom  risk  of  loss  or  damage  will  fall  where  goods 

shipped  by  lake  and  sold  F.  O.  B.  dock 402 

Liability  of  consignee  for  freight  where  sale  is  made  F.  O. 

B.  shipping-point 306 

Whether  consignee  can  change  place  of  delivery  of  ship- 
ment when  such  shipment  is  sent  F.  O.  B.  freight  prepaid  1010 

(11.)     LIABILITY  FOR  Loss  OR  DAMAGE: 

(For  liability  for  loss  from  delay,  see  Carriers — delay.) 
Liability  as  an  insurer  and  when  such  liability  ceases  in 

Illinois    369 

Liability  for  loss  enroute 154 

Claims  against  carrier  for  breakage 424 

Whether  carrier  can  insist  on  allowance  for  ' '  usual  break- 
ages ' '  when  claim  made  for  damages 424 

Liability  for  conversion 754 

Liability  for  appropriating  coal  in  transit 157 

Liability  of  carrier  issuing  bill  of  lading  before  receipt  of 

goods    .' 824 

Liability  for  delivery  without  production  of  bill  of  lading       754 
Liability  for  damages  when  delivery  is  made  without  pro- 
duction   of   bill    of    lading   where    bill    of    lading    reads 

' '  notify ' '  instead  of  ' '  order  and  notify  " 754 

Liability  of  initial  carrier  for  acts  of  connecting  carrier  in 
delivering  goods  without  production  of  bill  of  lading 
where  goods  are  shipped  to  order  of  consignor  with  sight 
draft  attached  to  bill  of  lading 605 


1032 

Whether  carrier  liable  for  damages  when  it  receives  goods 
to  be  carried  by  a  designated  route  and  deviates  from  the 

route  named  in  the  bill  of  lading 987 

Liability  of  loss  by  floods  and  upon  whom  loss  falls,  as  be- 
tween consignor  and  consignee  where  carrier  not  liable.  .  193 

Liability  for  goods  frozen  in  transit 427 

Liability  of,  for  goods  destroyed  by  fire  if  goods  not  re- 
moved within  48  hours 806 

Upon  whom  loss  falls  where  goods  destroyed  on  dock.  .       490 
Liability  of  carrier  where  true  nature  of  goods  not  dis- 
closed           427 

Liability  of  carrier  where  goods  lost  by  sinking  of  lighter       824 
Liability  of  carrier  for  loss  of  goods  destroyed  by  mob.  .       215 

Liability  for  goods  delivered  at  prepay  station 335,  845 

Liability  for  loss  or  damage  to  goods  when  delivered  at 
non-agency  or  prepay  station 335 

Liability  for  loss  of  samples  carried  as  samples 88 

Whether   liable    for   loss    or   damage   to   baggage   where 

trunks  contain  samples 514 

Liability  of  carrier  where  package  incorrectly  addressed 
through  fault  of  shipper 312 

Liability  for  transferring  freight  consigned  to  point  not 
on  its  own  lines  to  another  carrier  in  violation  of  ship- 
pers '  instructions 312 

Liability  for  goods  destroyed  in  warehouse  after  arrival 

at  destination 305 

Liability  of  carriers  where  goods  destroyed  after  wrongful 
refusal  to  deliver 193 

Whether  shipper  can  recover  more  than  agreed  valuation 

where  goods  damaged  in  transit 570 

As  to  who  sustains  loss  on  goods  damaged  in  transit  where 
consignor  pays 236 

Duty  of  carrier  to  lessen  injurious  effects  of  calamity 
caused  by  act  of  God  for  which  carrier  is  not  responsible  193 

(12.)     LIMITATION  OF  LIABILITY: 

Right  of  carriers  to  limit  liability 326,  424 

Right  to  limit  Common  Law  liability 424 

Limitation  of  liability  by  carrier  for  loss  or  damage  to 

trunks  containing  samples  of  merchandise 762 

Assent  of  shipper  required  to  limitation  of  liability....        754 
Express  assent  required  in  Illinois  to  limitation  of  Car- 
riers '    liability 508,  849 

Necessity  of  an  express  assent  of  shipper  to  limitation  of 

liability   in   Illinois 508 

Validity  of  special  contracts  releasing  carriers'  liability. 522,  564 
Legality  of  special  contract  between  shipper  and  carrier 

releasing  carrier 's  liability 522 

Validity  of  special  contracts  releasing  liability  as  ware- 
housemen .  566 


1033 

Whether  shipping  receipt  limitation  of  liability 506 

Necessity   of   condition  in   contract   limiting   liability   of 

carrier 326 

Right  to  limit  liability  in  excess  of  certain  valuation.  . .  .138,  713 
Burden  of  proof  on  carrier  to  exempt  himself  from  lia- 
bility            193 

Validity  of  clause  in  bill  of  lading  imposing  penalty  for 
over-loading  cars 422 

(13.)  RATES,  CHARGES  AND  CLASSIFICATIONS. —  (See  also  Carriers — 
Demurrage;  Carriers — Switching;  Demurrage;  Interstate  Com- 
merce Act)  : 

What  constitutes  legal   rate 169 

Right  of  shipper  to  combine  shipments  to  obtain  carload 

rates     98, 110 

Right  of  carrier  to  make  per  diem  charge  for  cars  in  ad- 
dition to  switching  charges 479-481 

Liability  of  shipper  for  per  diem  charges 557 

Legality  of  per  diem  charges  for  rental  of  cars  in  Mis- 
souri          550 

Owners  risk  rate  on  pottery 424 

Right  of  carrier  to  charge  for  weighing  cars 730 

Right  to  charge  storage  on  baggage 514 

Right  to  charge  storage  on  freight 107 

Whether  ' '  party  rates ' '   can  be  restricted  to  theatrical 

parties    202 

Power  of  carrier  to  limit  joint  rate  to  particular  connect- 
ing  line 419 

Whether  can  charge  more  for  short  than  for  a  long  haul .        599 
Whether  through  freight  rate  greater  than  combination  of 

two  locals  is  violation  of  Interstate  Commerce  law 474 

Whether  unlawful  to  use  combination  of  two  local  rates 
where  through   rate  is  greater  than  combination  of  the 

locals    967 

Legality  of  through  rate  greater  than  sum  of  local  rates 

caused  by  changes  in  classification  of  shipment 1008 

Duty  of  shipper  to  inspect  tariffs  to  ascertain  legal  rates 

where  quotations  conflict 169 

Duty  of  shipper  to  ascertain  legal  rate  where  quotations 
conflict   169 

Whether  contract  for  rate  different  than  published  rate  is 
binding  on  carrier 957 

Right  to  charge  tariff  rate  before  delivery  of  goods  where 

rate  has  been  incorrectly  quoted 957 

Right  to  break  open  packages  for  purpose  of  ascertaining 

if  goods  are  properly  classified 284 

Right  of  freight  inspectors  to  change  the  classification  of 

freight  after  shipment 857 

Liability  of  shipper  for  freight  charges  where  goods  are 
shipped  under  wrong  classification 857 


1034 

(14.)     RECEIPT  AND  CARRIAGE  OF  GOODS: 

What  freight  carrier  justified  in  refusing 762 

Whether  probable  strike  of  carriers'  employes  is  sufficient 

excuse  to  refuse  shipments 592 

Whether  carrier  obligated  to  receive  cars  of  connecting 

line  where  consigned  to  parties  located  along  its  tracks.  .        559 

Carriage  of  perishable  goods 427 

Duty  of  carrier  where  consignee  refuses  to  accept  goods.  .       585 

The  Vessel-Owners '  Limited  Liability  Act 824 

Effect  of  proposed  statutes  to  penalize  railroad  companies 
for  not  moving  freight  within  five  days  after  offer  of  de- 
livery    354 

(15.)     ROUTING  OF  SHIPMENTS: 

(See  Carrier,  Consignor  and  Consignee.) 

Right  of  consignor  to  control  routing  of  shipments 937 

Right  of  consignor  to  change  destination  of  goods  while 

in  transit 1003 

Right  of  carrier  to  refuse  shipments  unless  permitted  to 

route    same 937 

Right  of  owner  to  change  shipping  instructions  on  goods 

in  transit 568 

Whether  consignee  can  change  place  of  delivery  of  ship- 
ment when  such  shipment  is  sent  F.  O.  B.  freight  prepaid.  1010 

(16.)     STOPPAGE  IN  TRANSITU: 

Right  of  stoppage  in  transitu  where  bill  of  lading  taken 
in  name  of  vendee  as  consignor  and  in  name  of  purchaser 
from  vendee  as  consignee  and  as  to  the  effect  of  bank- 
ruptcy of  vendee 909 

Right   of   stoppage   in   transitu   where   goods   shipped   to 

third   person 909 

(17.)     SWITCHING: — (See  also  Interstate  Commerce): 

Liability  of  shipper  for  switching  charges 557 

Reasonableness  of  switching  rates 481 

As  to  what  are  the  legal  switching  rates  under  the  Illinois 

Maximum  rate  schedules 922 

Whether  shipper  liable   for  switching  charges  to   initial 

carrier  where  contract  made  for  delivery  of  car 557 

Whether  carrier  can  assess  per  diem  charge  in  addition  to 

switching   charge 922 

As   to    what    delivery    can    be    required    at   purely   local 

switching  stations  in  Chicago  and  in  Illinois 922 

Whether  carrier  can  refuse  to  accept  cars  offered  for 
switching  service  for  delivery  on  its  team  tracks 922 

Right  to  refuse  to  accept  cars  offered  for  switching  serv- 
ice for  delivery  on  its  team  tracks  or  other  tracks  when 

originating  on  a  connecting  line 922 

Whether  a  carrier  can  refuse  to  handle  shipments  for 
switching  from  points  within  city  limits  because  of  a 
strike  592 


1035 

Whether  carrier  can  refuse  to  switch  cars  on  private  side- 
tracks because  of  unpaid  demurrage  charges  on  other  cars       218' 
Whether   carriers  performing  local  switching   subject  to 

Interstate   Commerce   Act 931 

As  to   whether  under  Interstate  Commerce   Act   carriers 
can  be  compelled  to  interchange  facilities  and  switching.        917 
Whether  carriers  performing  a  terminal  switching  service 
can  be  compelled  to  make  through  routes  and  rates  under 

Interstate    Commerce   Act 922 

Whether  carrier  engaged  in  Interstate  Commerce  perform- 
ing a  terminal  switching  service  on  traffic  originating  upon 
its  own  terminal  in  Chicago  can  be  compelled  to  make  and 
publish  through  rates  on  interstate  shipments  of  such 

traffic  with  its  connections  at  Chicago 931 

Whether  it  is  lawful  under  the  Interstate  Commerce  Act 

for  a  carrier  to  absorb  a  switching  charge 992 

(18.)     TICKETS  AND  BEDEMPTION  OF  TICKETS: 

Bedemption  of  coupons  on  mileage  tickets 207 

Whether  carrier  can  be  compelled  to  redeem  unused  por- 
tion of  lost  mileage  ticket 953 

Limitation  of  time  for  redemption  of  mileage  books 517 

Transferability  of  mileage  tickets  and  right  of  railroad 
company  to  take  up  the  same  for  misuser 121 

CABRIEBS  BY  WATEB.— The  application  of  the  Harter  Act.. 490,  824 
The  application  of  the  Vessel  Owners '  Limited  Liability 

Act    490,  824 

What  constitutes  delivery  to 490 

Limitation  of  liability  of ; .       490 

Whether  carriers  by  water  must  give  notice  of  arrival  of 

goods    369 

The  Vessel-Owners '  Limited  Liability  Act 824 

Liability  of  carrier  where  goods  lost  by  sinking  of  lighter       824 
Liability  and  upon  whom  loss  falls  where  goods  are  de- 
stroyed on  dock 490 

CAB  SERVICE.—  (See  Carriers,  Demurrage.) 

CENSUS. — Whether   manufacturers   are   compelled   to   answer   in- 
quiries in  relation  to  their  business  requested  by  census 

bureau    524 

Whether  answers  to  certain  questions  can  be  compelled.  .       636 

CHATTEL  MOBTGAGES  —  Legality  of  conditional  sale  contract 

reserving  title  in  vendor 337 

Validity  of  unrecorded  mortgage  against  a  trustee  in 
bankruptcy  780 

CHECKS. — Power  of  salesman  to  endorse 470 

Effect  of  sending  a  check  in  full  settlement  of  an  accovint 
where  amount  of  check  is  less  than  amount  due 371 

CHICAGO— (See  Cities.) 

€HILD  LABOB  LAW. — Constitutionality  of  Illinois  Act  of  1903       187 
Whether  new  affidavit  required  under  the  law  of  1903 ....        199 


1036 

Liability  of  employer  where  child  is  injured  by  machinery 

upon  which  he  is  not  employed 208 

Employment  of  children  upon  hazardous  machinery 873 

Whether  law  prohibits  employment   of  minors  on  steam 
machinery 210 

Whether  adding  turpentine  to  varnish  and  mixing  stains 

by  children  is  within  prohibition  of  law 234 

Employers'  liability  where  false  affidavit  has  been  filed.  .  .        803 
Validity  of  amendment  in  relation  to  seating  women....          42 
CITIES. — Whether  firm  buying  second-hand  machinery  must  take 

out  city  license  as  a  second-hand  dealer 767 

Whether   manufacturers  compelled  to   pay  license   fee  to 

City  of   Chicago 217 

Amount   of   fees  that   should   be   charged   for   inspecting 

yard  measures 875 

Eight  of  city  council  to  grant  to  merchants  right  to  build 

platforms   for   bulkheads   in   public   streets 878 

As  to  whether  duty  is  imposed,  under  Chicago  ordinances, 

upon  owner  or  upon  lessee  of  property  to  erect  stand  pipes       775 

Whether   city   can   require   licensed   engineer   in   building 

supplied  with  steam  from  neighboring  plant 282 

Validity  of  rules  as  to  size  of  blow-off  pipes 515 

What  constitutes  steam  pressure  under  Chicago  ordinances       320 
Eight  of  city  to  compel  manufacturer  to   change   steam 

boilers  to  comply  with  rulings  of  board  of  inspectors 417 

Meaning  of  ordinance  requiring  licensed  engineer  to  be  in 
constant  attendance 

CITY  ELECTION.— What  constitutes 

COAST   FEEIGHTS   ALLOWED.— Effect   of,   on   title   to   goods 

sold    638 

C.  O.  D. —  (See  Sales,  Carriers,  Express  Companies.) 

Eesponsibility  of  consignor  when  goods  shipped  C.  0.  D.. .        235 

COLLECTIONS.— (See  Banks.) 

COMMEECE. —  (See    Carriers,    Foreign     corporations,    Interstate     Com- 
merce Act.) 


A 

CAR  COMPANIES. 

Eight  of  state  to  tax  private  cars  of  foreign  corporation 

used  exclusively  in  hauling  its  own  product 274 

The  Michigan  law  of  1905  imposing  a  tax  upon  private 

car    lines 888 

The  Texas  law  of  1905  levying  taxes  on  gross  receipts  of 

private   car  lines 864 

Validity  of  Indiana  law  imposing  tax  on  companies  con- 
veying  freight    and    passengers 37 


1037 

B 

FOOD  LAWS. 
Proposed  Iowa  Pure  Food  Law  and  validity  of  same  as 

to  goods  imported  from  other  states 373 

Constitutionality  of  Pure  Food  Law  of  South  Dakota  and 
effect  of  provisions  therein  requiring  place  of  manufac- 
ture, etc.,  to  be  printed  on  labels 687 

C 

FOREIGN  CORPORATIONS. 

Power  of  state  to  compel  foreign  corporations  engaged 
solely  in  interstate  commerce  to  comply  with  regulations 

before  instituting  suit 44,  54,  497,  946 

Whether  foreign  corporations  doing  interstate  commerce 
business  can  be  compelled  to  comply  with  the  law  of 

Kansas  as  condition  of  maintaining  suit 445 

Applicability  of  Wisconsin  Law  of  1905  to  interstate  com- 
merce transactions 838 

D 

LICENSES. 

Right  of  city  to  collect  license  fee  from  non-resident  sale 
agents  3 


Constitutionality   of   Pure   Paint   Law   of   North   Dakota 

and  right  of  legislature  to  fix  standard  of  pure  paint...        700 

F 

SEWING  MACHINES. 

Payment  of  license  fee  for  sale  of  sewing  machines  in 
foreign  state  where  title  to  same  does  not  pass  until  de- 
livery    253 

Validity    of   Virginia    statute    requiring   license    fee    for 

privilege  of  selling  sewing  machines  in  that  state 680 

Validity  of  license  tax  on  sewing  machines 41 

G 

TAXATION. 

Taxation  of  goods  held  in  warehouse  after  reaching  des- 
tination when  held  for  the  purpose  of  being  resold 654 

COMMERCIAL  PAPER.—  (See  Banks,  Bills  and  Notes,  Negoti- 
able Instruments.) 
COMMON   CARRIERS.—  (See  Carriers,   Express  Companies.) 

COMPOSITION.— What  constitutes,  and  the  effect  thereof 392 

COMPROMISE.— Effect  of  sending  a  check  in  full  settlement  of 

an  account  where  amount  of  check  is  less  than  amount  due       371 
CONDEMNATION. — As  to  taking  property  to  widen  a  street,  the 
measure  of  damages  therefor,  and  effect   upon  lease  of 
the  property  taken 389 


1088 

CONDITIONAL   SALES.— (See   Chattel   Mortgages.) 

Legality  of  conditional  sale  contract  reserving  title  in 
vendor  337 

CONFLICT  OF  LAWS. — What  laws  are  applicable  where  note  is 

executed  in  one  state  and  payable  in  another 899 

CONNECTING  CAEEIEBS.—  (See  Carriers  Interstate  Commerce.) 
Effect   of  receipt  of   freight   consigned  to   point   beyond 

carriers '   own  lines 608 

Summary   of   statutes   of   various   states   in   reference   to 
duties  and  liabilities  of  initial  and  connecting  carriers..        861 
Whether,  initial  carrier  liable  for  default  of   connecting 

carrier 608 

Liability  of  initial  carrier  where  loss  of  baggage  occurs 

on  line  of  connecting  carrier 608 

Liability  of  initial  carrier  for  delay  occurring  on  lines  of 
connecting  carriers 277,  397 

Effect  of  an  embargo  against  receipt  of  freight  from  con- 
necting lines 559 

Liability  of  initial  carrier  for  acts  of  connecting  carrier 
in  delivering  goods  without  production  of  order  bill  of 
lading  605 

Liability  of  initial  carrier  for  transferring  freight  con- 
signed to  a  point  not  on  its  own  lines  to  another  carrier 

in  violation  of  shippers'  instructions 312 

Power  of  initial  carrier  to  limit  joint  rate  to  particular 

connecting    line 419 

Whether  carrier  obligated  to  receive  cars  of  connecting 
line  when  consigned  to  parties  located  along  its  tracks.  .  .        559 
Bight  of  a  carrier  to  refuse  to  accept  cars  offered  for 
switching  service  for  delivery  on  its  team  tracks  or  other 

tracks   where   originating   on   a    connecting   line 922 

Whether  under  the  Interstate  Commerce  Act  carriers  can 
be  compelled  to  interchange  facilities  and  switching.  .  .  .        917 
Whether  carriers  performing  a  terminal  switching  service 
can  be  compelled  to  make  through  routes  under  the  Inter- 
state Commerce  Act 922,  931 

CONSIGNOR   AND    CONSIGNEE.— (See   Sales,    Carriers,    Con- 
tracts.) 

CONSPIRACY. —  (See  Boycott,  Labor  Unions.) 

Whether    it    is    lawful    on    the    part    of    a    number    of 

employers  to  agree  not  to  employ  union  labor 545 

Liability  of  employees  for  damages  caused  by  the  action 

of  a  labor  union 71 

Liability  of  labor  union  for  boycott   against  particular 

goods 308 

Liability  of  combination  of  employers  for  black-listing 
striking  employees 140 

CONSTITUTIONAL    LAW.— (See    Commerce,    Interstate    Com- 
merce Act.) 
ANTI-TRUST      STATUTES. — Constitutionality      of      Anti-Trust 

statutes 381 


1039 

CARRIERS. — Effect  of  proposed  statutes  to  penalize  railroad 
companies  for  not  moving  freight  within  five  days  after 
offer  of  delivery 354 

Right  of  state  to  tax  private  cars  of  foreign  corporation 

used  exclusively  in  hauling  its  own  product 274 

The  Texas  law  of  1905  levying  taxes  on  gross  receipts  of 

private  car  lines 864 

The  Michigan  law  of  1905  imposing  a  tax  upon  private 

car    lines 888 

CENSUS. — Whether  manufacturers  are  compelled  to  answer  in- 
quiries in  relation  to  their  business  requested  by  census 

bureau    524 

Whether  answers  to  certain  census  questions  can  be  com- 
pelled           636 

EMPLOYMENT. — Law  requiring  blowers  to  be  used  on  metal 

polishing   machinery 59 

Constitutionality  of  child  labor  law 187 

Validity  of  law  requiring  that  employes  shall  be  allowed 

time  to  vote 429 

The  Act  prohibiting  withholding  any  part  of  wages  of 
laborers   under  guise  or   pretext  that  they  are   gifts  or 

gratuity   243 

Constitutionality    of    law,    prohibiting    deductions    from 

wages  of  employees 179 

Validity  of  Illinois  statute  of  1903  regulating  payment  of 
wages  by  corporation 294 

Validity   of   Illinois  law   prohibiting  the   assignment   of 

wages   104 

Validity  of  Illinois  law  requiring  employer  to  state  that 
there  is  a  strike  at  his  plant  when  advertising  for  men  to 

take  the  place  of  strikers 222 

Constitutionality  of  Truck  Law  of  Illinois 379 

FLAGS. — Validity  of  law  prohibiting  use  of  national  flag  for 

advertising   purposes 1 

Right  to  use  flag  for  advertising  purposes 843 

FOOD. — Constitutionality  of  Pure  Food  Law  of  South  Dakota 
and  effect  of  provisions  therein  requiring  place  of  manu- 
facture, etc.,  to  be  placed  on  labels 687 

Proposed  Iowa  Pure  Food  Law  and  validity  of  same  as 

to  goods  imported  in  other  states 373 

FOREIGN  CORPORATIONS. — Right  of  state  to  impose  conditions 

on  foreign  corporation  engaged  in  interstate  commerce.  .        946 
Right   of  state  to  prohibit  foreign   corporation  engaged 

solely  in  interstate  commerce  from  instituting  suit 497 

Validity  of  foreign  corporation  law  of  New  York 315 

Validity  of  law  imposing  taxes  on  entire  capital  stock  of 
foreign  corporation 247 

PAINT. — Validity  of  Pure  Paint  Law  of  North  Dakota  of 
1905  and  effect  of  provisions  therein  requiring  the  ingre- 
dients of  paint  to  be  stated  on  the  label,  and  right  of  leg- 
islature to  fix  a  proprietary  standard  for  pure  paint.  .  .  .  700 


SEWING  MACHINES. — Payment  of  license  fee  for  sale  of  saw- 
ing machines  in  foreign  state  where  title  to  same  does 

not  pass  until  payment 253 

Validity   of   Virginia   statute    requiring   license   fee   for 
privilege  of  selling  sewing  machines  in  that  state 680 

CONSULTING  ENGINEER.— Liability  for  installation  of  ma- 
chinery that  does  not  prove  satisfactory 433 

CONTRACTORS.— Liability  of  boiler  manufacturer  for  personal 
injuries  sustained  by  sub-contractor  or  his  employees 
during  the  erection  of  boiler 632 

CONTRACTS.— (-See  Agency.) 

What  constitutes  a  contract  and  the  effect  thereof 392 

Whether  entire  or  severable 322 

Validity  of  employment  contract 151,  294 

Validity  of  contracts  entered  into  on  Sunday 391 

Validity  of  insurance  policies  dated  on  Sunday 404 

Legality  of  conditional  sale  contracts  reserving  title  in 

vendor    337 

What  constitutes  a  valid  and  enforcible  guarantee  of  an 

account   272 

Authority  of  commission  salesmen  to  make  contracts.  .  . .        201 
Liability   of   employer   for   contracts   made   by   his   em- 
ployees  or  agents 511 

Whether  lumber  broker  is  agent  of  his  principal  so  as  to 

bind  latter  by  his  contract 629 

Whether  orders  taken   by   traveling  salesmen   constitute 

contracts 165 

Liability  of  vendor  of  coke  for  loss  when  coke  sold  by 

oven  weights 154 

Whether  manufacturer  or  dealer  liable  for  damages  when 

goods  are   incorrectly  labelled 458 

Liability  of  vendee  for  cancelling  order  after  acceptance.        300 
Whether  acknowledgement  of  salesman's  order  constitute 

an  acceptance 200 

Whether  salesman  has  power  to  endorse  the  principal's 

name  upon  checks 470 

Whether  purchaser  can  accept  part  of  order  and  reject 

balance   322 

Right  to  recover  on  implied  contract  where  express  con- 
tract exists 332 

Right  of  consignor  to  discount  upon  the  amount  of  freight 

advanced 306 

F.   O.  B.   shipments   and  the   effect   of   equalization   of 

freight   rates 351 

Penalty  or  liquidated  damages 151 

Effect  of  printed  conditions  on  order 322 

COPYRIGHT.— Of  trade  marks 432 

CORPORATIONS. —  (See    Foreign    Corporations,    Constitutional 
Laic,  Taxation.) 
Right  to  compel  individuals  to  incorporate 113 


1041 

Right  to  copyright  name 74 

Right    of    unincorporated    association    to    use    corporate 

name 130 

Right  to  pass  dividends 58 

Right  to  purchase  stock  in  other  corporations 12 

Right  of  Illinois  corporation  to  hold  stock  in  a  subsi- 
diary corporation 176, 177 

Power  to  hold  real  estate 394 

Effect  of  holding  of  real  estate  by  corporations 394 

Liability  of  a  parent  corporation  for  acts  or  measures  of 

subsidiary  companies 750 

Right  of  Illinois  corporation  to  prevent  foreign  corpora- 
tion from  using  name  similar  to  that  of  the  Illinois  cor- 
poration    736 

Liability  of  corporation  on  notes  and  acceptances  issued 
in  name  of  corporation  by  officers  unauthorized  to  execute 

same 963 

Ultra  vires  business 90 

Whether  organized  for  ' '  purely  manufacturing  purposes ' '         13 

"Purely  manufacturing  purpose"  what  is 85 

Advantage  of  incorporating  in  New  Jersey 51 

Necessity  of  foreign  corporations  filing  annual  report  in 

Illinois   15 

Filing  annual  report  and  forfeiture  of  charter  for  failure 

to  do  so 11 

Necessity  of  making  annual  reports  to  Secretary  of  State 

and  effect  of  failure  to  do  so 416 

Necessity  of  Illinois  corporation  publishing  a  notice  of 

its  annual  meeting 753 

Cancellation  of  charter  of  Illinois  corporations  for  fail- 
ure to  file  annual  report 120 

The  Anti-trust  Laws  of  Illinois 381 

Necessity  of  filing  Anti-trust  affidavit  annually  in  Illinois       133 

Whether  necessary  to  file  Anti-trust  affidavit  in  absence 

of  notice  from  Secretary  of  State 841 

Form  of  Anti-trust  affidavit  where  it  is  doubtful  whether 

corporation  has  violated  law 183 

Whether  Illinois  corporation  can  make  Anti-trust  affidavit 
when  it  has  agreement  in  reference  to  prices,  etc.,  with 
New  York  corporation  having  same  stockholders,  directors 
and  officers  as  Illinois  corporation 1000 

Whether  labor  and  labor  unions  are  within  provisions  of 

Anti-trust  Law 408 

Taxation  of  capital  stock 85 

In  reference  to  filing  schedules  as  to  capital  stock  assess- 
ments in  view  of  1905  law 838 

Whether  manufacturing  corporation  which  carries  on 
other  business  not  authorized  by  charter  is  subject  to 
assessment  on  its  capital  stock 90 


1042 

Basis    of    assessment    of    capital    stock    of    corporation 
whose  stock  is  subject  to  assessment  by  local  assessor .  .        439 
As    to    whether   corporation    doing   transfer    business    is 
exempt  from  assessment  on  its  capital  stock 935 

Effect  of  improper  service  of  process  in  State  of  Texas 

on  corporation 317 

Validity  of  Illinois  statute  of  1903  regulating  payment  of 

wages  by  corporation 294 

Validity   of   law   prohibiting   corporations   from   making 
deductions  from  wages  of  workmen 379 

COUNTERFEITING. — Whether  use  of  aluminum  discs  for  adver- 
tising constitutes  counterfeiting 500 

CREDITORS.—  (See  Debtor  and  Creditor.) 

CRIMINAL   LAW. — Whether   use   of    aluminum    discs    used   for 

advertising  constitutes  counterfeiting 500 

Rendition   of  fraudulent  expense   accounts  by  salesmen, 
where  prosecuted  and  for  what 83 

D 

DAMAGES. — Agreed  damages  for  breach  of  employment  contract  151 

For  wrongful  use  of  trade  mark 341 

Whether  manufacturer  or  dealer  liable  for  damages  when 

goods  are  incorrectly  labeled 458 

Liability  for  delay  in  delivery  of  shipment,  and  measure 

of  damages  therefor 614 

Right  to  set-off,  where  liquidated  and  where  unliquidated       179 
MEASURE  OF  DAMAGES. 

Measure  of  damages  for  taking  of  property  by  condemna- 
tion         389 

Measure  of  damages  for  delay  of  goods  in  transit 678 

Measure  of  damages  for  breach  by  vendee  of  contract  to 

purchase  goods 385 

Measure  of  damages  where  vendor  fails  to  deliver  goods.  165 
Measure   of   damages   for  refusal   of  vendee   to   accept 

goods 300 

DEBTOR  AND  CREDITOR.— Effect  of  Bulk  Sales  Law  of  Illi- 
nois and  liability  of  an  attaching  creditor  under  the  law.        662 
Presumption  of  fraud  W7hen   sale  made  without   compli- 
ance with  bulk  sales  law,  and  whether  sales  are  conclu- 

-    sively  fraudulent  or  only  prima  facie 666 

Validity   of   unrecorded    mortgage   against   a   trustee   in 

bankruptcy 780 

Effect  of  sending  a  check  in  full  settlement  of  an  account 

where  amount  of  check  is  less  than  amount  due 371 

As  to  what  constitutes  a  composition  with  creditors,  and 

the  effect  thereof 392 

DELAY. — Liability  of  carrier  for.    (See  Carriers,  sub.  titl.  Delay.) 

DEMURRAGE.— (See  Carriers.) 


1043 

Validity  of  49-hour  rule  as  to  free  time  for  loading  or 

unloading  of  cars 69 

Reasonableness  of  48-hour  period  of  detention  where  cars 

are  of  large  capacity 205 

Right  to  exact  demurrage  in  the  various  states 56,  819 

Right  of  carrier  to  exact  demurrage  charges  and  whether 

carrier  has  lien  on  goods  for  same 56,  819 

Right  to  discriminate  in  respect  to 69 

Liability  of  consignee  for  demurrage 603 

Whether  consignee  can  be  compelled  to  pay  demurrage 

accruing  at  point  of  shipment 589 

Demurrage  on  goods  detained  on  account  of  embargo.  . .  .        624 
Whether  carrier  can  refuse  delivery  on  private  side-tracks 

account  of  unpaid  demurrage 218 

Right  to  assess  car  service  charges  without  making  tender 

of   cars 488 

Right  of  carrier  to  assess  demurrage  charges  for  private 

cars 819 

Right  of  carrier  to  a  lien  for  demurrage  charges 56,819 

DISCOUNT. — Right  of  consignee  to  discount  upon  the  amount  of 

freight  advanced 306 

DUTY.—  (See  Census.) 

As  to  whether  duty  to  erect  standpipes  under   Chicago 

ordinances  is  imposed  upon  owner  or  upon  lessee 775 

E 

ELECTIONS. — Right    of   employer   to   specify   time   of    day   for 

employes  to  vote 388 

As  to  what  elections  employes  are  entitled  to   leave  of 

absence  to  vote 395 

Validity  of  law  requiring  that  employes  shall  be  allowed 

time  to  vote 429 

Whether  employer  is  liable  for  pay  of  employes  taking 

the  time  allowed  to  vote 431,  438 

Whether  employes  must  be  paid  for  two  hours  for  time 
allowed  for  voting 438 

EMANCIPATION. — When  child  emancipated  so  as  to  be  entitled 

to  wages 234 

EMBARGO.— (See  Carriers,  Demurrage.) 

EMPLOYMENT. —  (See    Child  Labor  Lair,    Garnishment,   Labor 
Unions.) 

Validity  of  contract  of 151 

Validity  of  employment  contract 294 

Liability  of  employer  for  contracts  made  by  his  employes 

or  agents 511 

Liability  of  an  employer  for  physician 's  charges  for  vac- 
cination of  employe  or  for  damages  from  unsatisfactory 

vaccination  469 

Liability  of  employer  for  attorneys'  fees  in  suit  by  em- 
ploye for  wages  due 179 


Employers'  liability  where  false  affidavit  has  been  filed.  .        803 
Liability  of  employer  where  child  is  injured  by  machinery 

upon  which  he  is  not  employed 208 

Liability  of  employes  for  damages  caused  by  the  action  of 

a  labor  union 71 

Liability  of  employers  for  black-listing  striking  employes       140 
Whether  it  is  lawful  on  the  part  of  a  combination  of  em- 
ployers to  agree  not  to  employ  union  labor 545 

Arrest  and  prosecution  of  pickets  during  strike 656 

Right  to  restrain  picketing 596 

Whether  law  prohibits  employment  of  minors  on  steam 

machinery    210 

Employment  of  children  upon  hazardous  machinery 873 

Whether  adding  of  turpentine  to  varnish  and  mixed  stains 

comes  within  prohibition  of  the  Child  Labor  Law 234 

When  minor  must  institute  suit  for  personal  injuries 319 

Whether  it  is  necessary  for  plaintiff  to  obtain  judgment 
against  defendant  before  making  demand  upon  employer.      1016 

Statute  of  limitations  in  case  of  death 287 

Eight  of  employer  to  specify  time  of  day  for  employes  to 

vote 388 

As  to  what  elections  employes  are  entitled  to  leave  of 

absence  to  vote 395 

Validity  of  law  requiring  that  employes  shall  be  allowed 

time  to  vote 429 

Whether  employer  is  liable  for  pay  of  employes  taking  the 

time  to  vote 431 

AVhether  employes  must  be  paid  for  two.  hours  for  time 

allowed  for  voting 438 

Right  of  employer  to  make  deductions  from  wages  of  em- 
ployes on  account  of  mistakes,  errors,  etc 179 

Validity   of   law   prohibiting   deductions  from  wages   of 

workmen   379 

Validity  of  Illinois  statute  of  1903  regulating  payment  of 

wages  by  corporations 294 

Obligation  to  pay  employe  who  leaves  before  regular  pay 

day 84 

The  Act  prohibiting  withholding  any  part  of  wages  of 
laborers  under  guise  or  pretext  that  they  are  a  gift  or 

gratuity   243 

Right  of  employe  to  assign  his  wages 104 

Right  to  assign  wages 112 

Whether  minor  can  legally  assign  his  wages 234 

Sufficiency  of  notice  to  employer  of  assignment  of  wages 

by  employe 384 

Necessity  of  employer  paying  assignment  of  wages  when 

made  by  power  of  attorney 519 

In  reference  to  assignment  of  wages  under  Illinois  law 

of   1905 817 


ENGINEER. — Liability  for  installation   of  machinery  that   does 

not  prove  satisfactory 433 

ENGINEEES. —  (See  Steam  Engineers.) 

EVIDENCE. — Whether  carbon  copies  of  letters  admissible  in  evi- 
dence the  same  as  letter  press  copies 378 

EXECUTION.— (See  Seal  Estate.) 

Method  of  procedure  to  obtain  a  second  levy  under  judg- 
ment on  property  of  defendant 594 

EXPOSITIONS. — Eight  of  manufacturer  to  vise  facsimile  of  expo- 
sition awards  for  advertising  purposes 541 

EXPRESS  COMPANIES.—  (See  Carriers.) 

Duty   to    deliver   direct   to   consignee   without   additional 

charge   115 

Extent   of  responsibility   of  express  companies  on   ship- 
ment of  sealed  packages  upon  which  no  value  has  been 

placed    713 

Whether  shipper  can  recover  express  charges  on  shipment 

destroyed  in  transit 813 

Liability  of  express  company  for  C.  O.  D.  shipment  de- 
stroyed by  fire  before  delivery 855 

In  reference  to  general  contract  with  express  company  by 
Avhich  it  limits  its  liability 849 


F 

FACTORIES. — Whether  manufacturers  compelled  to  pay  factory 

license  fee  to  City  of  Chicago 217 

Factory-Inspection  law  of  Missouri 96 

FEDERAL  COURTS.— Whether  bound  by  state  decisions  on  lia- 
bility of  collecting  bank 576 

FIRE. — Destruction  of  bailment  by 469 

FIRE  ESCAPES. — As  to  whether  duty  is  imposed  under  Chicago 
ordinances   upon    owner   or   upon    lessee   of   property   to 

erect  stand-pipes   775 

FIRE  INSURANCE.— (See  Insurance.) 

FLAG  LAW.— Validity  of 1,  843 

FLAGS. — Right  to  use  flag  for  advertising  purposes 1,  843 

FLOODS.— Liability  of  carrier  for  damage  by 193 

F.  O.  B. —  (See  Carriers,  sub."  tit.  F.  O.  B.  Shipments,  index  page 

1030;  Sales.) 
FOOD. —  (See  Constitutional  Law.) 

Power  of  Illinois  Food  Commissioner  to  adopt  rules....  8 

Right   of    Illinois    State    Food   Commissioner    to   compel 

manufacturers  to  label  their  goods 8 

Ruling  of  Illinois  Food  Commissioner  as  to  sale  of  goods 

to  dealers  in  other  states 10 

Right  of  Wisconsin  Food  Commissioners  to  prohibit  sales 
of  lemon  extract  which  is  not  equal  to  fixed  standard  in 
case  where  label  on  bottle  correctly  states  ingredients .  . .  460 


,'  1046 

The  labeling  of  food  products  under  regulations  of  de- 
partment of  agriculture 573 

The  labeling  of  imported  food  products 573 

Constitutionality  of  Pure  Food  Law  of  South  Dakota  and 
effect  of  provisions  therein  requiring  place  of  manufac- 
ture, etc.,  to  be  placed  on  labels 687 

Proposed  Iowa  Pure  Food  Law,  and  validity  of  same  as 

to  goods  imported  in  other  states 373 

Whether  Food  Commissioner  liable  where  he  makes  incor- 
rect analysis  in  good  faith 721 

Improvement  of  common  article  of  food  by  adulteration.  .        460 

Application  of  pharmacopoeia  to  articles  of  food 460 

FOREIGN  CORPORATIONS. —  (See  Commerce,  Constituional  Law.) 
The  subject  is  arranged  under  the  following  heads: 

(1.)     MEANING  OF  "DOING  BUSINESS"  BY  FOREIGN  COR- 
PORATIONS (p.  1045). 

(2.)     MAINTENANCE   OF    SUIT   BY   FOREIGN    CORPORATIONS 
(1046). 

(3.)     TAXATION  OF  FOREIGN  CORPORATIONS  (1046). 

(4.)     FOREIGN  CORPORATION  LAWS  OF  THE  VAEIOUS  STATES 
AND  QUESTIONS  ARISING  THEREUNDER  (1046). 


MEANING  OF  DOING  BUSINESS. 

DOING  BUSINESS. — What  constitutes 26 

Whether  maintenance  of  room  as  headquarters  for  sales- 
men constitutes  doing  business 3 

Whether  occasional  sales  of  samples  by  foreign  corpora- 
tions constitutes  doing  business 117 

Whether   incidental    sales   by    traveling   salesmen   to   fill 

' '  hurry  orders ' '  constitutes  doing  business 14 

Doing  business  in  foreign  state  through  medium  of  part- 
nership to  avoid  compliance  with  foreign  corporation  law.        177 
Whether  consignment  of  goods  constitutes  doing  business.        347 
Whether  installation  of  apparatus  as  incidental  to  its  sale 

constitutes  doing  business 289 

Whether   making    shipments   from   other   states   through 

third  persons  constitutes  doing  business 263 

Whether  maintenance  of  branch  office  constitutes  doing 

business 242 

Whether  carrying  of  stock  of  goods  and  making  deliveries 

therefrom  constitutes  doing  business 213,  349 

Whether  maintenance  of  transfer  house  in  foreign  state 

constitutes  doing  business 249,  263,  345 

Payment  of  license  fee  for  sale  of  sewing  machines  in 
foreign  state  where  title  to  same  does  not  pass  until  de- 
livered   253 

Formation  of  subsidiary  corporation  in  foreign  state  to 
obviate  compliance  with  foreign  corporation  law 176 


1047 
ii 

MAINTENANCE  OF  SUIT  BY  FOREIGN  CORPORATIONS. 

Eight   of  state  to  prohibit  foreign  corporation  engaged 

solely  in  interstate  commerce  from  instituting  suit 497 

Power  of  state  to  compel  foreign  corporations,  engaged  . 
solely  in  interstate  commerce  to  comply  with  foreign  cor- 
poration law  as  a  condition  of  maintaining  suit 33,  123 

III 
TAXATION   OF  FOREIGN   CORPORATIONS 

Act  imposing  tax  on  entire  capital  stock 47,  247 

Whether  subject  to  taxation  on  bank  deposit 122 

The  Iowa  law  taxing  private  cars  of  foreign  corporations.       274 
Constitutionality  of  Michigan  law  of  1905  imposing  a  tax 

on  private  car  lines 888 

Constitutionality  of  Texas  law  of  1905  imposing  a  tax  on 
private  car  lines 864 

IV 

FOREIGN   CORPORATION  LAWS  OF  THE  VARIOUS  STATES  AND  QUESTIONS 
ARISING  THEREUNDER. 

CALIFORNIA    642 

CANADA. — (See  Manitoba.) 

COLORADO 44,  54, 123 

What  constitutes  doing  business  in  Colorado 16,  33 

ILLINOIS 12, 17 

Necessity  of  filing  annual  report  in  Illinois 15 

Necessity  of  filing  Anti-Trust  affidavits  in  Illinois 155 

Kight  of  receiver  of  insolvent  fire  insurance  company  to 
collect  premium  where  company  not  licensed  to  do  busi- 
ness in  Illinois 50 

Right  of  Illinois  corporation  to  prevent  foreign  corpora- 
tion from  using  a  name  similar  to  that  of  the  Illinois 

corporation    736 

Necessity  of  foreign  insurance  company  doing  business  in 

Illinois,  to  comply  with  Insurance  Laws  of  Illinois 771 

Whether  recovery  can  be  had  on  policy  in  case  of  loss 
where  foreign  fire  insurance  company  not  authorized  to  do 
business  in  Illinois 802 

INDIANA     17, 80 

What  constitutes  doing  business  in  Indiana 32 

INDIAN    TERRITORY 546,  649 

IOWA    17,  263 

The  law  of  Iowa  taxing  private  cars  of  foreign  corpora- 
tions    274 

KANSAS. — The  law  of  Kansas  and  whether  making  of  consign- 
ment contracts  constitutes  doing  business  in  Kansas....          93 


1048 

Whether  foreign  corporations  doing  interstate  commerce 
business  can  fce  compelled  to  comply  with  the  law  of 

Kansas  as  condition  of  maintaining  suit 445 

Whether  foreign  corporation  which  has  not  complied  with 
the  laws  of  Kansas  can  enforce  a  claim  against  a  resi- 
dent by  assigning  the  name  to  an  individual  and  bring- 
ing suit  in  his  name.' 792 

KENTUCKY. — Service  of  process  in  Kentucky  on  customer  of 

company    70 

MANITOBA. — The  law  of  Manitoba  and  what  constitutes  doing 

business  therein   62,  66 

MASSACHUSETTS. — Validity  of  law  of  Massachusetts  imposing 

taxes  upon  entire  capital  stock  of  foreign  corporations.  .        247 

MICHIGAN    17,  717 

What  constitutes  doing  business  in  Michigan 26 

The  Michigan  law  of  1905  imposing  a  tax  upon  private 

car  lines 888 

MINNESOTA   263 

What  constitutes  doing  business  in  Minnesota 59 

Effect  of  subsequent  compliance  under  the  law  of  Minne- 
sota on  the  right  to  maintain  suit 68,  77 

MISSOURI 310 

Effect  of  subsequent  compliance  with  foreign  corporation 

law  of  Missouri  on  the  right  to  maintain  suit 310 

MONTANA. — As  to  what  constitutes  doing  business  in  Montana       242 

NEBRASKA   17 

NEW  JERSEY. — The  law  of  New  Jersey  and  what  constitutes 

doing  business  therein 73 

Power  of  the  state  of  New  Jersey  to  compel  foreign  cor- 
porations to  pay  taxes 396 

NEW  MEXICO. — The  law  of  New  Mexico  and  necessity  with 

compliance   thereof 658 

NEW  YORK. — The  law  of  New  York  and  the  constitutionality 

thereof  315 

What  constitutes  doing  business  in  New  York 42 

The  law  of  New  York  and  whether  making  sales  on  com- 
mission constitutes  doing  business 103 

The  right  to  institute  action  in  New  York  without  com- 
plying with  the  law 651 

NORTH  DAKOTA 263 

The  law  of  North  Dakota  and  the  necessity  of  the  com- 
pliance therewith 946 

OHIO .80,105,642 

PENNSYLVANIA  35,  642 

The  tax  laws  of  Pennsylvania 281 

The  ' '  Bonus ' '  Law  of  Pennsylvania 105 

Whether  Bonus  Act  of  Pennsylvania  applicable  to  cor- 
porations engaged  in  interstate  commerce 118 

Whether  book  accounts  constitute  "capital  employed" 
within  meaning  of  Bonus  Act  of  Pennsylvania 280 


1049 

Whether  corporation  having  complied  with  act  of  Penn- 
sylvania, is  obligated  to  comply  with  Bonus  Act 325 

Meaning  of  "amount  of  capital  actually  employed"  as 

used  in  foreign  corporation  law  of  Pennsylvania 53 

Whether  obligated  to  pay  wholesale  guarantee  license  tax 

under  Pennsylvania  law 324 

SOUTH    DAKOTA  . 17,  497 

TENNESSEE. — The    law    of    Tennessee    and   what    constitutes 

doing  business  therein 76 

TEXAS    101, 106 

The  law  of  Texas,  and  what  constitutes  doing  business 

therein    213 

Constitutionality  of  the  law   of   Texas 598 

Effect  of  improper  service  of  process  in  State  of  Texas.  .        317 
The  Texas  law  of  1905  levying  taxes  on  gross  receipts  of 
private  car  lines 864 

WISCONSIN    17,  263,  606 

What  constitutes  doing  business  in  Wisconsin 606 

Whether    installation    of    machinery    constitutes    doing 
business   in    Wisconsin 332 

The  law  of  Wisconsin  of  1905  and  the  validity  thereof.  .        710 
Applicability  of  Wisconsin  law  of  1905  to  interstate  com- 
merce   transactions 838 

FORESTALLING.— Ordinance  prohibiting  forestalling  of  fuel..        206 

FREIGHT.— (See  Carriers.) 

FROZEN  GOODS.— (See  Carriers.) 

Liability  of  carrier  for  goods  frozen  in  transit  when  de- 
livery   is    delayed 298 

Liability  of  carrier  for 427 

FUEL.— Forestalling   of 206 

G 

GARNISHMENT. — Service  of  notice  of  demand  on  employer, 
and  for  what  period  of  time  employer  must  hold  wages  of 

employees  after  service  of  notice  of  demand. 897 

Whether  it  is  necessary  for  plaintiff  to  obtain  judgment 
against  defendant  before  making  demand  upon  employer.     1016 

GASOLINE.— (-See  Insurance.) 

GENERAL  ELECTION.— What  constitutes 395 

GUARANTEE. — What  constitutes  a  valid  and  enforceable  guaran- 
tee of  account 272 

Whether  principal  and  guarantor  can  be  sued  jointly.  .  .  .        828 

H 

HORSES. —  (See  Live  Stock  Commissioners.) 

Liability  of  traveling  salesmen  for  loss  of 380 

HUSBAND  AND  WIFE.— Whether  notes  signed  by  wife  as  ac- 
commodation surety  for  her  husband  in  Kentucky,  and 
payable  in  Illinois,  are  enforceable  against  wife  under 
Kentucky  statutes 899 


1050 


INDEPENDENT  CONTRACTOR.— Liability  of  boiler  manufac- 
turer for  personal  injuries  sustained  by  sub-contractor 
or  his  employees  during  the  erection  of  boiler 632 

INFANTS.— (See  Minors.) 319 

IN  JUNCTION.— Right  to  enforce  statute  of  other  states  by 301 

Injunction    against    boycotting   by   labor   union    against 

goods   of   particular    firm 308 

Right  to  compel  carrier  to  transport  goods  without  dis- 
crimination    592 

Right   to   restrain   picketing 596 

INSPECTION.— (See  Weights  and  Measures.) 

INSURANCE. — Right  of  landlord  to  collect  insurance  where  ten- 
ant keeps  gasoline  on  premises  in  violation  of  policy Ill 

Whether  acts  of  co-tenant  in  keeping  benzine  on  premises 
in  violation  of  policy  can  affect  right  of  tenant  to  recover 

insurance  186 

Whether  rule  that  landlord  cannot  collect  insurance  where 
tenant  keeps  gasoline  on  premises  in  violation  of  policy  is 

good  law   185 

Whether  landlord  can  collect  proceeds  of  fire  insurance 
policy  where  tenant  keeps  benzine  on  premises  in  viloation 

of  policy 379 

Validity  of  policy  dated  on  Sunday 404 

Validity  of  credit  insurance  policies 415 

Whether  broker  liable  for  return  of  unearned  premiums 

on  cancelled  policies 441 

Whether  insurance  broker  entitled  to  renewal  commissions 

where  policies  renewed  through  another  broker 441 

Validity  of  assessments  upon  premium  notes,  of  mutual 

>  insurance  companies 771 

Extent  of  liability  on  premium  notes  or  a  resident  of  Illi- 
nois insuring  in  Mutual  Fire  Insurance  Companies  of 

Missouri  and  Indiana. 771 

Necessity  of  company  doing  business  in  Illinois  to  comply 

with  insurance  laws  of  Illinois 771 

The  laws  of  Missouri  re  Mutual  Insurance 771 

The  laws  of  Indiana  re  Mutual  Insurance 771 

Whether  recovery  can  be  had  on  policy  in  case  of  loss 
where  foreign  fire  insurance  company  not  authorized  to 
do  business  in  Illinois 802 

INTERSTATE  COMMERCE  ACT.— (See  Carriers,  Commerce.) 

Restriction  of  party  rates  to  theatrical  parties 202 

Duty  of  shipper  to  ascertain  legal  rates 169 

Legality  of  through  rate  greater  than  some  local  rates 

caused  by  changes  in  classification  of  shipment 1008 

Whether  contract  for  rate  different  than  published  rate  is 
binding  on  carrier 957 


1051 

Whether  unlawful  use  of  combination  of  two  local  rates 
where  through  rate  is  greater  than   combination  of  the 

locals  967 

Whether  through  freight  rate  greater  than  combination 
of  two  locals  is  violation  of  Interstate  Commerce  Act.  .  .  .  474 
Whether  after  freight  consigned  from  one  state  to  an- 
other state  arrives  at  destination  and  is  reconsigned  to 
another  point  in  the  same  state  the  latter  movement  is 
interstate  commerce  and  is  subject  to  the  Interstate 

Commerce  Act 967 

Whether  it  is  lawful  under  the  Interstate  Commerce  Act 

for  a  carrier  to  absorb  a  switching  charge 992 

Whether  shipping  goods  by  express  in  bulk  for  distribu- 
tion is  violation  of  Interstate  Commerce  Act 993 

Whether  carriers  performing  local  switching  subject  to 

Interstate   Commerce   Act 931 

What  constitutes  unjust  discrimination 486 

Whether  carriers  performing  a  terminal  switching  service 
can  be  compelled  to  make  through  routes  and  rates  under 

Interstate  Commerce  Act 922 

Whether  agreement  of  carriers  in  reference  to  routing  of 
cars   constitutes   pooling   in   violation   of   the   Interstate 

Comemrce   Act 621 

As  to  what  delivery  can  be  required  under  an  Interstate 

Commerce  rate  to  Chicago 922 

WThether  water  transportation  lines  are  snbject  to  Inter- 
state Commerce  Act 951 

Legality  of  stop-over  privileges  in   transit  under   Inter- 
state Commerce  Act 914 

Whether  can  charge  more  for  a  short  than  a  long  haul.  .        599 
Whether    carrier    engaged    in    interstate    commerce    per- 
forming a  terminal  switching  service  on  traffic  originat- 
ing upon  its  own  terminal  in  Chicago  can  be  compelled 
to   make  and   publish   through   rates   on   interstate   ship- 
ment of  such  traffic  with  its  connections  at  Chicago ....        93 1 
Whether,   under   the   Interstate   Commerce   Act,   carriers 
can  be  compelled  to  interchange  facilities  and  switching.        9J7 
INTERSTATE    LAW.— Liability    in    Illinois    under    New    York 
statute  prohibiting  the  use  of  name,  photograph  or  pic- 
ture of  any  person  for  advertising  purposes 301 

(See  Conflict-  of  Laws.) 


JOINT  RATES.— Power  of  carrier  to  limit  joint  rate  to  particu- 
lar connecting  line 419 

JOINT  TENANCY.— (See  Husband  and  Wife.) 

JUDGMENTS. — Method  of  procedure  to  obtain  a  second  levy 

under  judgment  on  property  of  defendant 594 

JUNK  DEALERS. — Whether  firm  buying  second-hand  machinery 

must  take  out  city  license  as  a  second-hand  dealer 767 


1052 


LABELS.— (See  Food.) 

Validity  of  Pure  Paint  Law  of  North  Dakota  of  1905 
and  effect  of  provisions  therein  requiring  the  ingredients 
of  paint  to  be  stated  on  the  label,  and  right  of  legislature 

to  fix  a  proprietary  standard  for  pure  paint 700 

Whether  manufacturer  or  dealer  liable  for  damage  when 

goods  are  incorrectly  labeled 458 

Effect  of  provisions  of  South  Dakota  Pure  Food  Law 
requiring  place  of  manufacture,  etc.,  to  be  printed  on 

labels  of  articles ' 687 

Labeling  of  imported  food  products  under  regulations  of 
department  of  agriculture 573 

LABOR. —  (See  Employment,  Boycott.) 

Arrest  and  prosecution  of  pickets  during  strike 656 

Eight  to  restrain  picketing 596 

Whether  it   is  lawful  on  the  part  of  a  combination   of 

employers  to  agree  not  to  employ  union  labor 545 

In  reference  to  assignment  of  wages  under  Illinois  law 

of  1905 817 

Employers'  liability  where  false  affidavit  has  been  filed.  .        803 
Whether   labor   unions   within   prohibition   of   Anti-trust 

Law  408 

Employment  of  children  upon  hazardous  machinery 873 

The  Alien  Contract  Law  and  its  application 808 

LABOR  UNIONS.— (See  Conspiracy,  Boycott.) 

Right  to  compel  incorporation  of 113 

Whether  within  prohibition  of  Anti-trust  Law 408 

Liability   of  labor  union  for   boycott   against  particular 

goods    308 

Whether  picketing  is  lawful 472 

Liability  of  members  of  a  non-incorporated  labor  union 

for  damages  caused  by  the  action  of  the  union 71 

LANDLORD  AND  TENANT.—  (See  Insurance.) 

Responsibility  of  tenant  for  acts  of  co-tenant 186 

Effect  of  condemnation  of  property  on  leases 389 

Right  of  tenant  to  lease  side  of  building  for  advertising 

purposes    883 

Whether  under  terms  of  lease  landlord  or  tenant  is  obli- 
gated to  erect  fire  escapes 775 

As  to  whether  duty  is  imposed  under  Chicago  ordinances 
upon  owner  or  upon  lessee  of  property  to  erect  stand- 
pipes  775 

LARCENY. — Liability  of  railroad  company  and  its  employes  for 

appropriating  coal  in  transit 157 

LEASES.— (-See  Landlord  and  Tenant.) 

LEMON  EXTRACTS.— (See  Food.) 

LIABILITY. — Liability  of  carriers  as  warehousemen 806 


1053 

LICENSES. —  (See  Foreign  Corporations.) 

Whether  firm   buying  second-hand  machinery  must  take 

out  city  license  as  a  second-hand  dealer 767 

LICENSEES. — Liability  of  firm  for  injuries  sustained  by  police 
officer  during  the  strike  while  on  a  wagon  belonging  to 
the  firm 716 

LIENS. —  (See  Mechanics'  Liens.) 

LIMITATIONS. — When   minor  must   institute   suit  for  personal 

injuries   319 

LIVERY  STABLES.—  (See  Horse.) 

LIVE  STOCK  COMMISSIONERS.— Liability  of  state  for  horses 

killed  by  order  of   board 134 

M 

MANUFACTURER. — Whether  manufacturer  or  dealer  liable  for 

damages  when  goods  are  incorrectly  labelled 458 

MASTER     AND     SERVANT.—  (See    Negligence,    Employment, 
Child  Labor,  Labor.) 
Right   of  employer  to   make  deductions   from  employes' 

wages,  on  account  of  mistakes,  errors,  etc 179 

Liability  of  employer  where  child  is  injured  by  machinery 

upon  which  he  is  not  employed 208 

Liability  of  hirer  of  team  for  injuries  caused  by  traveler       290 
When  minor  must  institute  suit  for  personal  injuries.  ...        319 
Liability   of   boiler   manufacturer   for   personal   injuries 
sustained  by  sub-contractor   or  his  employes  during  the 

erection  of  boiler 632 

MEASURE  OF  DAMAGES.—  (See  Damages.) 

MECHANICS '  LIENS.— The  Law  of  Illinois 320 

MERCANTILE  COMPANY.— What  constitutes 935 

MILEAGE  TICKETS,  Redemption  of.— (See  Eailroads,  Carriers)       167 

Redemption  of  coupons  on 207 

Whether    carriers    can    be    compelled    to   redeem   unused 

portion  of 953 

MINORS. — Whether  minor  can  legally  assign  his  wages 234 

MOB. — Liability  of  carrier  for  loss  or  delay  caused  by 215 

MONOPOLIES. —  (See  Anti-trust  Laws,  Anti-trust  affidavits.) 

Validity  of  agreements  fixing  price  on  commodities  under 

Illinois  statutes 571 

Whether  Illinois  corporation  can  make  anti-trust  affidavit 
when  it  has  agreement  in  reference  to  prices,  etc.,  with 
New  York  corporation  having  same  stockholders,  direc- 
tors and  officers  as  Illinois  corporation 1000 

MUNICIPAL  CORPORATIONS.—  (See  Cities.) 
MUTUAL  INSURANCE.— (-See  Insurance.) 

N 
NAME. —  ( See  Corporations.) 


1054 

NEGLIGENCE. —  (See  Master  and  Servant,  Child  Labor.) 

Liability  of  employer  where  child  is  injured  by  machinery 

upon  which  he  is  not  employed 208 

Time  within  which   suit  must  be  commenced  in  case  of 

death  by  wrongful  act,  etc 287 

Liability  of  hirer  of  team  for  injuries  caused  by  traveler       290 

Liability  for  goods  destroyed  while  being  repaired 469 

Liability  of  boiler  manufacturers  for  personal  injuries 
sustained  by  sub-contractor  or  his  employes  during  the 

erection  of  boiler 632 

Liability  of  firm  for  injuries  sustained  by  police  officer 
during  a  strike  while  on  a  wagon  belonging  to  the  firm .  .        716 
Whether  food  commissioner  liable  where  he  makes  incor- 
rect analysis  in  good  faith 721 

Employers'  liability  where  false  affidavit  has  been  filed.        803 

NEGOTIABLE  INSTRUMENTS.— (-See  Bills  and  Notes.) 

Liability  of  guarantor  or  endorser  of  note  where  collect- 
ing bank  fails  to  remit  after  maker  pays  note 386 

NEW  JERSEY. — Advantages  of  incorporation  in 51 

NOTES. —  (See  Negotiable  Instruments.) 

NOTICE. — Sufficiency  of  notice  of  assignment  of  wages 384 

0 

ORDINANCES.— (See  Cities.) 

As  to  whether  duty  is  imposed  under  Chicago  ordinances 
upon  owner,  or  upon  lessee  of  property  to  erect  stand- 
pipes  775 

OVERLOADING    CARS.— Validity    of    clause    in    bill-of -lading 

imposing  penalty  for  overloading  cars 422 

I' 

PAINT.— Validity  of  Pure  Paint  Law  of  North  Dakota  of  1905 
and  effect  of  provisions  therein  requiring  the  ingredients 
of  paint  to  be  stated  on  the  label  and  right  of  legislature 
to  fix  an  arbitrary  standard  for  pure  paint 700 

PARTNERSHIP. — Formation  of,  to  avoid  compliance  with  For- 
eign Corporation  Law 177 

Liability  for  debts 177 

PARTY  RATES.— (See  Carriers.) 

PATENTS. — Liability  of  supply  house  pirating  parts  and  using 
without  right  brands  or  marks  belonging  to  the  manu- 
facturer    618 

PAYMENTS. — Right  of  shipper  to  recover  back  excess  rates.  .  .  .        169 

Recovery  of  excess  payments 202 

Recovery  back  of.     (See  Telephone  Companies.) 

PENAL  LAWS. — Whether  enforceable  in  other  states 301 

PER  DIEM  CHARGES.—  (See  Carriers.) 

Right  to  make  per  diem  charge  for  cars  in  addition  to 
switching  charges 479,  481 


1055 

PERSONAL  INJURIES.— Legislation  to  reduce  suits  on  account 

of    40 

Statute  of  limitations  in  case  of  death 287 

When  minor  must  institute  suit  for  personal  injuries.  .  .  .        319 

PHOTOGRAPHS.— Liability  in  Illinois  under  New  York  statute 
prohibiting  the  use  of  name,  photograph  or  picture  of 
any  person  for  advertising  purposes 301 

PHYSICIANS. — Liability  of  an  employer  for  physician's  charges 
for  vaccination  of  employe  or  for  damages  from  unsat- 
isfactory vaccination 469 

PICKETING. —  (See  Labor  Unions,  Injunctions.) 

Whether  lawful 472 

POLICE   POWER.— Limitations  of 222 

PREPAY  STATIONS.— (See  Carriers   (11}.} 

PRINCIPAL  AND  AGENT.— (See  Agency.} 

PRINCIPAL  AND  SURETY. — Whether  principal  and  guarantor 

can  be  sued  jointly 828 

PRIVATE  CAR  LINES.— (See  Commerce,  Constitutional  Law, 
Taxation.} 

PROPERTY.—  (See  Condemnation.) 

PUBLIC   OFFICER. — Whether    food   commissioner   liable   where 

he  makes  incorrect  analysis  in  good  faith 721 

PUBLIC  SERVICES.— (See  Telephone  Companies.) 

PURE  FOOD.— (See  Food.) 

PURELY  MANUFACTURING  PURPOSE.— (See  Corporations.) 

What  is 85 

R 

RAILROADS.— (See  Carriers.) 

Transferability  of  mileage  tickets  and  right  to  take  up 

same  for  misuse 121 

Liability  for  appropriating  coal  in  transit 157 

Obligation  to  redeem  mileage  tickets  when  user  has  not 

used  entire  mileage 

Redemption  of  coupons  on  mileage  tickets 

What  constitutes  part  of  railroad  line 

Effect  of  proposed  statutes  to  penalize  railroad  com- 
panies for  not  moving  freight  within  five  days  after  offer 
of  delivery 354 

RAILROADS  AND  WAREHOUSES.— (See  Carriers.) 

REAL  ESTATE.— (See  Corporations.) 

Whether  real  estate  held  jointly  by  husband  and  wife 
subject  to  execution  in  Indiana 126 

REPAIRS.— (See  Bailments.) 

S 

SALES. —  (See  Carriers,  Monopolies.) 

Lien  of  vendor  for  purchase  price 165 


1056 

Right  to  cancel  order  with  acceptance,  where  unfavorable 

reports  are  received  as  to  solvency  of  buyer 165 

Authority  of  commission  salesmen  to  make  contracts 201 

Whether  salesman  has  power  to  endorse  principal's  name 

upon  checks 470 

Whether  acknowledgment  of  salesman 's  order  constitutes 

an   acceptance 200 

Liability  of  firm  on  orders  taken  by  salesmen   working 

on  commission  basis 221 

Liability  of  vendee  for  cancelling  order  after  acceptance.        300 
Whether  purchaser  can  accept  part  of  order  and  reject 

balance    322 

What  constitutes  a  valid  and  enforceable  guarantee  of 

an  account 272 

What  constitutes  a  warranty 322 

Right  to  recover  on  implied  contract  where  express  con- 
tract exists 332 

Measure  of  damages  for  breach  by  vendee  of  contract  to 

purchase  goods 385 

Whether  prepayment  of  freight  by  consignor  throws  risk 

upon   him 216 

As  to   who   sustains   loss  on   goods   damaged   in   transit 

where  consignor  pays  the  freight 236 

Liability  of  vendor  for  loss  of  coke  en  route  when  sold 

by  oven  weights 154 

Whether  manufacturer  or  dealer  liable  for  damages  when 

goods  are  incorrectly  labelled 

Responsibility  of  consignor  when  goods  shipped  C.  O.  D. 
Liability  of  consignee  where  draft  payable  on  arrival  and 

inspection  435 

Right    of    consignor    to    discount    upon    the    amount    of 

freight  advanced 306 

Right  of  stoppage  in  transitu 165 

Right  of  stoppage  in  transitu  where  bill  of  lading  taken 
in  name  of  vendee  as  consignor  and  in  name  of  purchaser 
from  vendee  as  consignee  and  as  to  the  effect  of  bank- 
ruptcy of  vendee 909 

In  whom  title  rests  during  transit  as  between  consignor 

and  consignee 193 

Title  to  goods  where  draft  attached  to  bill  of  lading 235 

Right  of  vendor  to  reserve  title  to  goods  sold 437 

Allowance  of  freight  to  consignee  as  reserving  title  in 

consignor   214 

Effect  of  clause  in  contract  reserving  title  in  vendor  until 

goods  are  paid  for 626 

Effect  of  prepayment  of  freight  by  consignor  upon  title 

to  goods 638 

Whether  title  to  goods  in  transit  passes  by  payment  of 
draft  attached  to  bill  of  lading 478 


1057 

Title  to  goods  in  transit  when  sold  "coast  freight  al- 
lowed"   638 

Right   of   consignee   to   control  shipments   when   title   to 

wame  is  in  consignor 1010 

Meaning  of  F.  O.  B 490 

Effect  of  sales  F.  O.  F>.  upon  title  to  goods (538 

Effect  of  a  contract  reserving  title  in  vendor  until  pay- 
ment where  goods  are  sold  F.  O.  B.  a  certain  point,  there 

to  be  loaded  in  cars  with  other  goods 626 

When  title  passes  from  seller  to  purchaser  where  goods 

sold  "  F.  O.  B.  common  shipping  point " 435 

F.   O.    B.   shipments   and   the   effect   of   equalization   of 

freight  rates 351 

As   to   who   sustains  loss   on    goods   damaged   in   transit 
where  goods  are  sold  "F.  O.  B.  point  of  shipment".  .  .  .        236 
Upon  whom  risk  of  transportation  of  goods  falls  when 

sold  ' '  F.  O.  B.  point  of  shipment  " 853 

As  to  who  is  responsible  for  goods  in  transit  in  case  of 

F.   O.   B.   shipments 963 

On  whom  risk  of  loss  or  damage  will  fall  where  goods 

shipped  by  lake  and  sold  F.  O.  B.  dock 402 

Liability   of   consignor   for   loss  in  transit   where   goods 

sold  F.  O.  B.  shipping  point 824 

Whether  consignee  can  change  place  of  delivery  of  ship- 
ment when  such  shipment  is  sent  F.  O.  B.  freight  prepaid     1010 
Effect  of  Bulk  Sales  law  of  Illinois  and  liability  of  an 

attaching  creditor  under  the  law 662 

Presumption  of  fraud  when  sales  made  without  com- 
pliance with  the  Bulk  Sales  law  and  whether  sales  are 
conclusively  fraudulent  or  only  prima  facie 666 

SALESMEN. — (See  Agency,  Contracts,  Carriers,  Checks.) 

Power  of  traveling  salesmen  to  bind  employer  on  contract         78 

Right  to  make  contracts 165 

Authority  to  make  contracts 201 

Liability  of  firm   on   orders  taken  by  salesmen  working 

on  commission  basis 

Whether  acknowledgment  of  order  constitutes  acceptance 

SAMPLES.—  (See  Carriers,  sub.  tit.  Baggage.) 

SECOND-HAND  DEALERS.— Whether  firm  buying  second-hand 
machinery  must  take  out  city  license  as  a  second-hand 
dealer  767 

SERVICE  OF  PROCESS.— Effect,  of  improper  service  of  process 

in  State  of  Texas 317 

SET-OFF. — Right  of  employer   to   set-off   damages   in   action  by 

employe    1 79 

SEWING  MACHINES.— Payment  of  license  fee  for  sale  of  sew- 
ing machines  in  foreign  state,  where  title  to  same  does 

hot  pass  until  delivery 253 

Validity  of  Virginia  statute  requiring  license  fee  for 
privilege  of  selling  sewing  machines  in  that  State 680 


1058 

Validity  of  license  tax  on  sewing  machines 41 

SHKKMAN  ACT. — Whether  combination  of  carriers  in  reference 

to  equipment  is  a  violation  of 621 

SHIPPERS. — (See  Carriers,  Railroads,  Interstate  Commerce  Act. 
Contracts,  Sales.) 

SIDE  TRACKS.—  (See  Carriers.) 

Whether  carriers  obligated  to  deliver  on 218 

STATE. — Liability   for  value   of  horses   killed  by   order   of   live 

stock  commissioners 134 

STATUTE.— Subject  not  embraced  in  title 42 

STATUTE  OF  LIMITATIONS.— Statute  of  limitations   in  case 

of  death. 287 

STEAM   BOILERS.— Right   of   city  to   compel   manufacturer   to 
change  steam  boilers  to  comply  with  rules  of  number  of 

inspectors   417 

Validity  of  rules  as  to  size  of  blow-off  pipes 515 

STEAM   ENGINEERS. — Whether   city   can   require   licensed   en- 
gineer in  building  supplied  with  steam  from  neighboring 

plant 282 

What  constitutes  steam  pressure 320 

Meaning  of  ordinance  requiring  licensed  engineer  to  be  in 
constant  attendance 282 

STEAM  GENERATING  MACHINERY.— What  constitutes 210 

STOCK. —  (Eight  of  corporation  to  hold,  see  Corporation.) 

STOPPAGE  IN  TRANSITU  —  (See  Carriers  and  Sales.) 

STORAGE.— (See  Carriers.) 

STREETS. — Right  of  city  council  to  grant  to  merchants  right  to 

build  platforms  for  bulk-heads  in  public  streets 878 

STRIKES. — (See  Carriers;  Labor;  Labor  Unions.) 

Validity  of  law  compelling  employer  to  state,  in  his  ad- 
vertisement for  labor,  that  he  has  a  strike  at  his  plant.  .        222 

SUS1DIARY    CORPORATION.— Formation    of.       (Sec    Foreign 
Corporation.) 

SUNDAY.— Validity  of  contracts  entered  into  on 391 

Validity  of  insurance  policies  dated  on  Sunday 404 

SWITCHING.— (See  Carriers,  sub.  tit.  Switching.) 

T 

TAXATION. —  (See  Corporations,  Constitutional  Law.) 

Taxation  of  Capital  Stock 13 

Basis  of  assessment  of  capital  stock  of  corporation  whose 

stock  is  subject  to  assessment  by  local  assessor 439 

Whether  company  engaged  in  manufacture  of  electricity 

is  liable  to  taxation  on  its  capital  stock 672 

As   to   whether    corporation    doing   transfer    business    is 
exempt  from  assessment  on  its  capital  stock  in  Illinois.  .  .      .933 
In  reference  to  filing  schedules  for  capital  stock  assess- 
ments in  view  of  1905  law  of  Illinois.  .  838 


1059 

Whether  assessment  of  capital  stock  made  prior  to  July 

1,  1905,  can  be  enforced  under  law  of  Illinois 670 

Property  outside  of  Chicago  and  Illinois,  where  listed.  .  .          79 
Whether  Illinois  corporation  subject  to  taxation  on  bank 

deposit  in  New  York 122 

Whether  check  account  subject  to  assessment 680 

(roods  held  in  warehouse  after  reaching  destination  when 

held  for  the  purpose  of  being  resold 654 

Procedure  with  reference  to  personal  property  taxes 5 

The  Texas  law  of  1905  levying  taxes  on  gross  receipts  of 

private  car  lines.  .  . , 864 

The  Michigan  law  of  1905   imposing  a  tax  upon  private 

car  lines 888 

TEAMS. — Liability  of  hirer  of  team  for  injuries  caused  by  trav- 
eler    '. ! ' 290 

TELEPHONE  COMPANIES.— Scope  of  the  litigation  in  Chicago       lot! 

Effect  of  recent  Illinois  Supreme  Court  decisions 811 

The  telephone  litigation  in  Chicago  and  the  effect  where 

name  of  complainant  has  been  changed 556 

Rates  outside  city  limits  of  Chicago 48 

Right  to  recover  back  excess  payments  when  made  with- 
out protest 75 

Kight  of  subscriber  to  attach  his  own  equipment  to  lines 

of  telephone  company 834 

Obligation   to   furnish    particular   service,   which    it   for- 
merly maintained,  but  since  abandoned 13'J 

Whether  can  be  compelled  to  itemize  bills  for  measured 

service 364 

Reasonableness  of  rates,  and  remedy  of  subscriber  when 

rates  are  exorbitant 405 

TENANCY  IN  COMMON.— Whether  tenancies  by  entireties  held 

by  husband  and  wife  subject  to  execution  in  Indiana.  ...        126 

TRADE  MARKS.— Wrhat  constitutes 413 

Whether  necessary  to  copyright 432 

The  registration  of 432 

The  Act  of  1905  and  the  necessity  for  registration  under 

the  same 554 

Right  to  copyright  company's  name  or  to  protect  same 

as  a  trade  mark 74 

Right  to  protect  name  which  implies  the  name  of  a  cor- 

corporation  74 

Right  of  Illinois  corporation  to  prevent  foreign  corpora- 
tion  from  using  a  name  similar  to  that  of  the   Illinois 

corporat  ion 736 

Right   of   manufacturer   to    use   facsimile   of    exposition 

awards  for  advertising  purposes 541 

What  constitutes  infringement  of  trade  mark  and  who  is 

liable 341 

Liability  of  supply  house  pirating  parts  and  using  without 

right  brands  or  marks  belonging  to  the  manufacturer.  .  .  .        CIS 


1060 

Right  of  person  whose  name  is  blown  in  bottles  to  prevent 

the  further  use  or  refilling  of  the  same 159 

TRANSFER  COMPANY. — As  to  whether  corporation  doing  trans- 
fer business  is  exempt  from  assessment  on  its  capital 

stock 93o 

TRANSFER  HOUSE.—  (See  Foreign  Corporations.) 
TRAVELING  SALESMEN.— (See  Salesmen,  Agency,  Contracts.') 

TRUCK  LAW.— Constitutionality  of 379 

TRUSTS  AND  COMBINATIONS.— (See  Anti-trust  Affidavit.) 

Extra-territorial  effect  of  statutes  in  relation  to 1000 

Whether  Illinois  corporation  can  make  anti-trust  affidavit 
when  it  has  agreement  in  reference  to  prices,  etc.,  with 
New  York  corporation  having  same  stockholders,  directors 
and  officers  as  Illinois  corporation 100U 

"u 

UNFAIR  TRADE.— (See  Trade  Marks.") 

UNITED  STATES.— Whether  manufacturers  are  compelled  to 
answer  inquiries  in  relation  to  their  business  requested  by 
census  bureau . .  524 


VACCINATIONS.—  (See  Employment.) 
VENDOR  AND  PURCHASER,— (See  Sales.) 
VOLUNTARY  PAYMENTS.— (See  Payments.) 
VOTE.— (See  Elections.) 

w 

WAGES. —  (See  Employment,  Labor,  Assignments,  of  Wages.) 

Deductions  from.     (See  Employment.) 
WAR E II OUS ES.—  (See  Carriers. ) 
WATER  CARRIERS.— (See  Carriers.) 
WEIGHTS  AND  MEASURES.— Amount  of  fees  that  should  be 

charged  for  inspecting  yard  measures 875 


r."'    ' 


